Free Expat Contract Localization Policy Template

Download our free expat contract localization policy template to create a standardized and cost-effective contract localization process.

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What's included

Key takeaways

  1. Companies must leverage expat talent to boost business agility and expand their global footprint in the international market.
  2. The average international assignment costs 2.5 to 4x the annual salary of the person you’re sending. Contract localization significantly reduces the financial burden associated with long-term expatriate assignments while supporting the worker.
  3. Use this template to simplify and standardize the process of localizing contracts for expat workers.

Who will benefit from this policy template?

This localization policy template will benefit global businesses and their HR departments in creating a clear and comprehensive process for expat contract localization. 

Expatriates are a considerable investment for multinational corporations, but maintaining this investment over time can become financially unsustainable. To reduce the financial burden associated with long-term expatriate assignments, companies are exploring alternative approaches, with localization emerging as a viable solution.

Localization involves adapting an expatriate’s contract to reflect the terms and conditions of the local market. This approach includes a gradual reduction or elimination of expatriate-specific allowances and benefits.

Typically, companies consider contract localization under the following conditions:

  • A potential new hire is based in a different country from where the job is located, and the company wishes for them to relocate
  • A worker on an international assignment reaches the maximum length allowed for their stay and agrees to immigrate
  • There isn’t a suitable position available in the worker’s home country; therefore, localizing the work agreement in the host country helps avoid redundancy
  • Both parties agree that localization will help address the prohibitive cost of the international assignment model while still protecting the worker’s benefits
  • The worker has a preference for the quality of life in the host country
  • The worker has developed personal relationships that make the host country feel more like home
  • The worker would like to pursue superior career opportunities that are not available in their home country


Localization also offers strategic advantages beyond cost savings. It helps retain top talent, allowing them to continue contributing their skills to the host country’s operations for longer. 

Moreover, localization strengthens the connection between a multinational’s international locations and its headquarters. It ensures that expatriates’ salaries and compensation align with their local colleagues, addressing potential disparities and promoting a culture of trust and equity across the organization.

Policy overview

This policy lays the groundwork for your company’s approach to expat contract localization. It addresses the following key aspects:

  • Eligibility criteria: Who qualifies for contract localization, ensuring a clear understanding among expat workers
  • Contract modification process: How the company adapts expat workers’ contracts to align with local standards, providing a seamless transition for talent
  • Support for expats: The support mechanisms in place to assist expats during their transition, ensuring they feel valued and supported


The policy categorizes expat workers into specific groups for contract adjustments, including:

  • New hire
  • Worker-initiated localization
  • Company-initiated localization
  • International assignee
  • Key talent
  • Executive


Additionally, the policy outlines three tailored localization packages designed to meet the diverse needs of expat workers:

  • Permanent Localization Package
  • Localize Plus Package
  • Executive Localization Package

Each package offers a comprehensive suite of benefits, including but not limited to:

  • Immigration support
  • Relocation shipment allowance
  • Settling-in services
  • Exit tax coverage
  • Corporate housing
  • Cost of living adjustments
  • Compensation review
  • Benefit entitlement adjustment
  • Tax equalization, preparation, and consultations

FAQs

Does this policy cover salary and benefit adjustments?

Yes. This policy will guide you through the process of adjusting the worker’s compensation to the local market. It also explains how the worker’s current benefits package will be impacted and any additional benefits they will recieve.

Does this policy explain how to meet local employment conditions?

Yes. This policy provides guidance and best practices around localizing workers’ contracts to meet local terms and employment laws of the host location.

Note: Mandatory benefits are unique to the destination countries’ local employment conditions. Therefore, you will need to understand how the worker's entitlements are impacted. For example, you will need to asses whether they need healthcare insuarnce, retirement benefits, and social security.

See also:

Does this policy support adherence to immigration law?

Yes. This policy shares guidance and best practices on adhering to immigration laws.

 

Disclaimer: This document does not constitute legal advice. Every business operates under unique circumstances and legal frameworks. Consult with a qualified legal professional to ensure your policy aligns with your specific legal basis.