For any operation heading toward a merger, acquisition or divestment, executives tend to maintain a laser-like focus on the deal itself. However, especially when deals occur across multiple jurisdictions, there is a mountain of operational and compliance details to plan for, particularly in human resources.
Universities may send their U.S.-based faculty and staff to work abroad on short- and long-term assignments. But these assignments frequently involve unfamiliar—and often overlooked—home- and host-country laws. Failure to comply with these laws can result in fines and reputational damage for the institution.
China has done a good job of creating the appearance that it’s made it easier to establish a Wholly Foreign Owned Enterprise (WFOE, pronounced “woofy”) there, but for Canadian SMEs, nothing’s really changed. The process is still time-consuming and onerous.
As tax base erosion and profit shifting come under major scrutiny from the world’s biggest economies, the practice of corporate inversion has once again come under the microscope. While further restrictions on inversion are likely only a matter of time, ending the practice will amount to only a small patch on a global tax framework that’s come up for serious rethinking.
If your business must establish or maintain a presence in China, this represents a new HR challenge. You may be able to head off the challenge altogether if you have the flexibility to place employees in Shanghai or another alternative to Beijing. It’s a pivot that could lead to significant savings on benefits and leave you with happier employees.