What is an expatriate employee — and is using one the right choice for your business?

Sending people across borders to work for your company is a big move. But for a growing business expanding into new markets, relocating an expat employee might not just be a strategic move — it may be necessary.

If you're exploring global hiring or building your first international team, you've probably heard of this term. But what does it really mean — and is it the right approach for your business?

In this article, we’ll break everything down — and show you how, whatever you choose, the international hiring, management, and payroll process can be simple and painless.

First, what is an expatriate employee?

An expatriate employee (or simply expat employee) is someone who works for your company, but lives in (and works from) a country they are not a citizen or permanent resident of.

In most cases, the employee has been sent abroad on behalf of your company, usually to launch a new office, lead a local team, or transfer knowledge across regions.

In this way, you can think of expat employees as global ambassadors for your company. They bridge cultures, align goals, and bring consistency to new markets.

What is the difference between an expat employee and a local hire?

As the title suggests, local hires are people you hire directly in a new country, whereas expats are usually assigned internationally from your company’s country.

It’s important to note that this distinction applies even if the local hire is originally from your company’s country.

For example, let’s say that Mark, an unemployed US citizen, moves to Spain for personal reasons. Once there, he applies to work remotely for your company, which is based and headquartered in the US. Mark would be classed as a local hire — not an expat employee — because his relocation was not facilitated by your company.

This difference is important to understand, especially as more and more workers opt to move abroad of their own accord and then seek employment remotely in their home country (a practice often termed as “self-initiated expatriation”).

Why do companies use expat employees?

The traditional image of expatriate employees is one of large-scale enterprises seconding workers between multiple global offices.

However, using expat employees can also be an effective strategy for small companies and startups that are aiming to expand globally — especially if hiring local leadership isn’t yet feasible (or preferable).

Expat employees help enable businesses of any size to:

• Enter new markets. You need people you trust to launch and lead.

• Transfer skills. Specialists often move across borders to train local teams.

• Maintain alignment. Expat leaders can help replicate company culture and standards.

• Support clients or partners abroad. This is especially common in consulting or services businesses.

• Build cross-border careers. Many companies aim to offer international roles as part of a leadership development plan.

How do you manage expat employees?

Relocating someone to another country is about more than booking flights and finding an apartment. Supporting expats means handling multiple legal, financial, and cultural complexities, and ensuring that your team member has everything they need to be successful in their new position.

To keep expat employees happy and productive, most companies typically tend to offer:

• A housing allowance (or company housing)

• Cost of Living Adjustments (COLA) to ensure fair pay abroad

• International health insurance (including family coverage)

• Relocation support (i.e., visas, flights, and moving expenses)

• Tax equalization to prevent double taxation

• Education stipends for employees with children

Expat employee benefits are more complex and more generous than local benefits, because they need to be. Uprooting your life isn’t easy, and these assignments are high-stakes for both the employee and the business.

Global Employment & Expansion —

6 min

What is relocation assistance?

Learn more about how job relocation assistance works, and get actionable tips for negotiating the best package to help you make an efficient and hassle-free move for work.

What about expatriate HR?

Expatriate HR is a term that refers to the systems and practices that support employees on international assignments. This includes:

• Handling international payroll and benefits

• Managing work permits and immigration compliance

• Preparing employees with cultural training and language support

• Planning the repatriation process when the assignment ends

If you get any of these things wrong, you risk non-compliance, employee burnout, or attrition. But if you get it right, you’ll have a mobile, loyal team that helps your company scale globally with fewer bumps in the road.

When you work with an international HR partner like Remote, we provide tailored relocation support, and make it quick, simple, and straightforward to manage and pay your team members abroad.

What are the most common mistakes companies make with expat employees?

If you follow the guidance above and lean on the right support, you can mitigate many of the complexities of managing expat employees.

It’s also advisable to be aware of some of the most common mistakes companies make, such as:

• Ignoring tax obligations. If you’re not thinking about your employee’s payroll taxes in both countries, you’re potentially creating a future problem. It’s crucial to understand your withholding and reporting obligations, as well as the rules around bilateral agreements and potential tax credits.

• Underestimating relocation stress. Support doesn’t stop once the plane lands. Keep your employee connected and check in regularly.

• Skipping repatriation planning. Many expats leave their company after returning home, because they don’t see a clear role waiting for them. Factor this into your career planning.

• Assuming one-size-fits-all benefits. Every country has different requirements, needs, and expectations. What’s generous in your employee’s home country might be basic or useless in their destination, so aim to be flexible.

To avoid these mistakes, set clear expectations from the start, and over-communicate with your employee.

It’s also highly advisable to work with an international employment partner who can handle compliance for you, and allow you to choose and manage your benefits in multiple countries.

Visas and Work Permits —

11 min

How to handle international employee relocation and stay compliant

Learn more about the benefits, challenges, and different types of employee relocation. Remote explains the easy way to manage relocation for your company.

So, should you use an expat employee — or go local?

Earlier in the article we explained the difference between expat employees and local hires. But which is the best option?

Ultimately, it depends on your company’s goals — and the role itself. For instance, expat assignments are great for porting your company’s culture, or launching a new market. But if you're in it for the long haul, local hires help you build sustainable teams with deep regional knowledge.

The most successful global companies use a combination of both approaches, but as a starting point, here are some factors to consider:

How can Remote help?

Whichever approach you take, Remote has you covered. If you want to relocate existing employees to a new country, our relocation service provides:

• Visa application support and sponsorship

• Local immigration and taxation guidance

• Mobility and relocation support through our trusted partners

We can also support you with international payroll and HR management support.

Alternatively, if you want to hire quickly and easily in a new country — without having to set up an entity there — our employer of record (EOR) service makes the entire process simple and painless, at every stage of the employment lifecycle.

If you’re managing a globally distributed team (or you plan to), it’s crucial to have a partner that understands local talent on a global level, including labor and tax laws, benefits, and more.

Get your Remote Relocation Guide

Learn how Remote can help you navigate international employment and enable a compliant and hassle-free move with our expert immigration and relocation services.

Download