Like Tree6Likes
  • 5 Post By fth
  • 1 Post By gilleshk

internal transfer vs. expat

Closed Thread
  1. #1

    Join Date
    Feb 2010
    Posts
    7

    internal transfer vs. expat

    Hi all,

    There was an opportunity in our HK office recently and I applied to the position. My current role and experience made me their best candidate and a few of my colleagues also recommended me after they hear I have an interest. I just found out some of the relocation offerings, but am still waiting for salary.

    1) is there a difference in salary and relocation package between an "internal transfer" and expat (company send you to HK)? In this case, I did initiate first, but think that their need is more urgent. Does that give me a little more negotiation power if they are going to offer the 'internal transfer' package?

    2) i'm not sure how much they are offering in salary at the moment, but for relocation allowance there is only going to be a lump sum payment, which probably is enough to cover travelling and temp accommodation. I am a bit concerned at the housing cost as the office is in central and based on the readings of other posts, it can be very expensive to rent within 15 mins of central, is it reasonable to demand monthly housing allowance...let's say 15-20k HKD pm?

    Appreciate any info you can share....thank you


  2. #2

    Join Date
    Sep 2008
    Posts
    3,677
    Quote Originally Posted by MgcFish:
    1) is there a difference in salary and relocation package between an "internal transfer" and expat (company send you to HK)? In this case, I did initiate first, but think that their need is more urgent. Does that give me a little more negotiation power if they are going to offer the 'internal transfer' package?
    Depends how your company defines it and if they make a distinction between the two. In my previous company the expat contracts were more attractive than internal transfers (the latter was basically just a transfer to a new place but on local terms).

    2) i'm not sure how much they are offering in salary at the moment, but for relocation allowance there is only going to be a lump sum payment, which probably is enough to cover travelling and temp accommodation. I am a bit concerned at the housing cost as the office is in central and based on the readings of other posts, it can be very expensive to rent within 15 mins of central, is it reasonable to demand monthly housing allowance...let's say 15-20k HKD pm?
    15-20k would be the minimum I would ask for if I had to stay in Central.

  3. #3

    Join Date
    Feb 2009
    Location
    Gulf Region, ex Mid-Levels
    Posts
    1,933

    Again depends on your seniority, type of business you are in, where you are relocating from and your personal circumstances. Some firms also play around with your salary and mix and match local status and expat status. Things to consider include:-

    1. Housing allowance - given quite often, sometimes may be reflected in your salary. For a 400 sq ft apartment in mid levels 15k should cover you in a walk up apartment, 25k you should get something around 600-800 sq ft in a newer building with limited facilities (porter and lift only)

    2. Flights home - offered sometimes to senior people with a family, a good guess to likelihood is how generous your travel policy is when you have to go for work.

    3. Health and dental insurance - Common perk for locals and expats alike. The difference would be if you are offered an international policy or a local one.

    4. Pensions - There is a mandatory scheme here in HK called the Mandatory Provident Fund which is capped at $1,000 per month from yourself, and the same from your employer. If you are a US citizen or Green Card holder, beware of some tax complications on this. This might only kick in after your first year.

    5. Education expenses for children - If you have kids this can be very expensive, also getting a place can be difficult as well. Some companies own debentures in order to help their employees.

    6. Tax equalization - If you are coming from anywhere but the US, I would avoid this as it would likely result in a reduction of your gross pay. Tax rates here are low. If you are subject to double tax, speak to an accountant.

    7. Visa status for your partner - If you want your partner to come out with you, you may want to apply for a dependent visa for him or her. That way they can look for a job after arrival if they haven't lined up one already. There are plenty of posts on this.

    8. Moving expenses - Sometimes you employer will have a direct agreement with a shipping company and will pay direct, other times it will be part of a general allowance.

    9. Relocation allowance - This sometimes is a lump sum to cover additional costs (eg new furniture, deposits for flats etc).

    10. Termination of home country contracts - You may have additional break costs when moving like your current lease, mobile phone, gym membership etc. This is less likely to be covered but just beware of these as they can mount up, and look at ways of mitigating them.

    11. Temporary Accommodation - When you arrive you have to live somewhere. People often get 1-2 months before you have to move out. If you are put somewhere expensive the tax bill might be a bit of a surprise. Also remember if your stuff is coming by boat it take a while to get here and clear customs.

    This list is quite comprehensive and you might not get them all. What I would say is to stay focused on the overall package and not get stuck on an individual element. Also consider all the potential hidden costs in moving.

    MovingIn07, MgcFish, Geoff and 2 others like this.

  4. #4

    Join Date
    Mar 2007
    Location
    Gold Coast Marina
    Posts
    17,934

    great post fth - worth a bookmark i think!


  5. #5

    Join Date
    May 2006
    Location
    Siu Sai Wan
    Posts
    1,660
    Quote Originally Posted by fth:
    6. Tax equalization - If you are coming from anywhere but the US, I would avoid this as it would likely result in a reduction of your gross pay. Tax rates here are low. If you are subject to double tax, speak to an accountant.
    This is a very good point that fth makes.

    If your company has done this several (or much more) times, then your negotiating will be a little more formal and restricted, as they will know what they want.

    But, if your company is new at this sort of thing, you will need to ensure that you cover your own ass with everything, as the people working on your package may not be aware of tax implications, housing costs, visa problems, etc.

  6. #6

    Join Date
    Feb 2009
    Location
    Gulf Region, ex Mid-Levels
    Posts
    1,933
    Quote Originally Posted by Crocodile:
    If your company has done this several (or much more) times, then your negotiating will be a little more formal and restricted, as they will know what they want.

    But, if your company is new at this sort of thing, you will need to ensure that you cover your own ass with everything, as the people working on your package may not be aware of tax implications, housing costs, visa problems, etc.
    I would say cover your ass in both cases.

  7. #7

    Join Date
    Oct 2006
    Posts
    4,905
    Quote Originally Posted by fth:
    1. Housing allowance - given quite often, sometimes may be reflected in your salary. For a 400 sq ft apartment in mid levels 15k should cover you in a walk up apartment, 25k you should get something around 600-800 sq ft in a newer building with limited facilities (porter and lift only)
    I'd say that's on the expensive side... You can get a 2 bedroom 500sq ft flat at the top of the escalator(10 min walk down) in a building like Vantage Park(swimming pool, lift, relatively new building) for 15K or so.

    I also know someone living near Star st in Wanchai(5-10 min to Central by cab/bus) in an older building with lift on the top floor, 2 bdrm, 600sq ft for 10K.

    If you're on the West Side like Kennedy Town 15-20 min by bus, you can get 2bdrm 600sq ft in a newer building for 10-15K.

    Your housing allowance really depends on the type of position and the company. It can be anything from 10K at the very bottom to 100K for very senior positions.
    MgcFish likes this.

  8. #8

    Join Date
    Feb 2010
    Posts
    7

    Thanks all for your reply!
    I would be relocating from nyc, and it is an associate role (4-5 yrs experience) in middle office of a top tier ibank.

    I've been told the job works quite long hours - so it's probably good to stay as close to the office as possble! If the avg rent is ~20k pm, sounds like my range of 15-20k pm is still reasonable?

    Also are many single expats offerred flights home?


  9. #9

    Join Date
    Feb 2009
    Location
    Gulf Region, ex Mid-Levels
    Posts
    1,933

    When I got moved out at similar level to yourself (front office) my salary was boosted by a little to cover the cost of a flight. It's more of a perk if you are a senior guy.

    Assuming you are a US citizen (and working for a US bank) my advice is look very hard at pension provision. If there is any way to keep your 401k going do so.

    Another pitfall from some unhappy campers I know is watch out for US state and city taxes in NYC. I know someone who is getting hurt badly by them even though he has worked here for years.

    Get some proper independent tax advice and don't rely 100% on the company provided accountant. The accountants know which way their bread is buttered.