HR manager researching expatriates vs immigrants and their differences

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Immigration vs. Expatriation: Key Differences

There’s a common theme among many companies, especially those going global. They reach a point where they ask the question, one they’ve never really thought much about: What’s the difference between an expatriate and an immigrant? The answer, it turns out, matters a lot.

Because while people often use those terms interchangeably, they carry very different legal, cultural, and HR implications. For companies hiring across borders, those differences can affect everything—from pay and benefits to compliance and long-term strategy.

You want the best talent, wherever it lives. Whether that means hiring an expat on assignment or welcoming an immigrant who’s relocating for good, both come with rules, risks, and realities. Tax codes. Labor laws. Local benefits structures. The kind of stuff that can trip you up if you’re not paying attention.

So where do you start?

Start with clarity. Understand who you’re hiring, how they’re classified, and what that means in the country where they’ll work. Then—because it’s complicated—consider bringing in support. Services like an employer of record can help you stay compliant, keep your HR policies aligned, and give your employees what they need to thrive.

What is an expatriate?

An expat is someone who lives and works in a country other than their own for personal or professional reasons. They are often doing this on behalf of their employer for a set time. Expats can come from any country, but U.S. citizens make up a large percentage of expats globally. In 2024, an estimated 5.5 million U.S. citizens lived abroad, with numbers expected to grow with increases in remote work.

Expats can be experienced leaders, skilled professionals, executives, or people looking to start or grow their business in new markets. Expat assignments are most common for internationally established companies or organizations ready to expand.

What is an immigrant?

An immigrant is someone who permanently relocates to a new country to live and work there indefinitely. Their reasons for relocating may include seeking better work opportunities, economic stability, or safety, or joining loved ones.

Since immigrants often seek permanent relocation and pursue work on their own, they can face various legal challenges and restrictions when attempting to obtain residency. They may require visa sponsorship by an employer, family member, or educational institution.

Key differences between expatriate vs. immigrant

While expats and immigrants live outside their native countries, there are important distinctions:

	Expatriate	Immigrant
Reason for relocation	Temporary or assignment-based	Long-term or permanent residency
Employment Type	Assigned by employer	Hired directly in host country
Legal Residency	Temporary permit or visa	Work visa, residence, or citizenship
Payroll & Benefits	Often tied to home country	Tied to host country requirements
Tax Status	May retain home tax residency	Tax resident of host country
Typical Use Case	Internal transfer or global expansion	Local talent acquisition

Why these differences matter

Global employers need to consider many factors when hiring talent. Taxes, local laws and regulations, additional costs, and legal requirements impact business. Understanding the differences between expats and immigrants will help align hiring decisions with business goals while staying compliant.

A solid grasp of these differences enables employers to:

Maintain compliance to avoid penalties and build credibility. Misclassifying an expat as an immigrant or vice versa can lead to additional taxes and penalties or impact your organization’s credibility. Know your candidate’s status, local regulations, and labor laws to ensure you’re making the best decisions for your business.
Understand immigration requirements to streamline hiring and onboarding. Different visa types and permit processes apply to expats and immigrants, affecting how you sponsor and onboard talent. You can avoid unnecessary hiccups and obtain great talent by knowing specific processes before hiring.
Stay profitable by managing costs. Expat compensation can be expensive for employers since it typically includes relocation costs. In contrast, immigrants typically secure their work and don’t require the same contracts. Knowing these differences can help you plan for the type of labor and build contracts that align with your needs.
Create benefits and HR policies to align with the workforce. Expat benefits may include housing, relocation, and schooling allowances, which can help you retain great talent even when they’re abroad. Immigrant contracts typically don’t include relocation costs, but policies must meet local laws and regulations to ensure fairness.
Avoid employment misclassification. Improper classification can trigger permanent establishment risk, payroll penalties, or benefits’ noncompliance.

What this means for your global hiring strategy

Hiring expats and immigrants can be a huge benefit. They bring specific knowledge and language skills, while filling talent gaps to drive expansion into new markets. But hiring expats and immigrants comes with challenges as well. It requires an extra layer of strategy to manage everything from benefits and pay to compliance.

Before hiring international talent, ask the following questions:

Is this a short-term assignment or a long-term relocation? Expats typically relocate for shorter terms. Immigrants typically relocate indefinitely. For example, a U.S. employee sent to help with expansion in Spain for two years is an expat. An IT expert who moved from China and was hired by a U.S. company is now a local resident.
Will employees remain on payroll in their native country? It’s important to know how local versus home-country payroll affects your business. Does it cost more? Can you manage local payroll and stay compliant?
Are there mandatory benefits required for the employee? Some jurisdictions have mandatory benefits you’ll need to provide, like paid leave.
Which immigration route applies? Employees who are being transferred to a different country are intra-company transfers. New employees being hired from abroad will require sponsorship. The employment route you choose may depend on the type of experience you’re seeking.
Does the employee have a legal right to work? Whether an expat or immigrant, you must ensure the employee has the legal right to work in the country of employment. Doing so will ensure you avoid penalties and loss of credibility.
Is an employer of record (EOR) or entity setup required to remain compliant? Save time, money, and stress by using services like EORs to manage international employees.

How an EOR can help

EORs help you stay on the right side of local labor laws and regulations while hiring the best talent. From recruitment to managing global teams, EORs help you simplify the hiring process. Here are a few benefits of using an EOR:

Regional compliance. Get access to local experts in HR, payroll, and employment to help you stay compliant and avoid penalties and risks.
Streamlined workforce management. From deciding whether to hire an expat or an immigrant to managing distributed teams, an EOR gives you the tools to find great talent and manage them in over 185 countries.
Immigration support, payroll, and benefits administration. Ensure that your employees get the support they need during the immigration process.
Determine the correct classification and ensure contracts comply with local labor laws. If you’re not sure how to classify an employee and what laws apply to their employment, an EOR will ensure they receive the right benefits, pay, and support.
Mitigate risk around tax compliance, social contributions, and employment eligibility. Avoid double taxation, understand tax equalization, and social security requirements for expats vs. immigrants.

Local expertise for global talent

Your business is growing. Things are working. And now you’re ready to go global—to hire the best people, wherever they are. But then, a question that seems simple: Do you relocate someone you already have or hire local talent in a new country? Turns out, it’s not so simple.

Suddenly, it’s not just about hiring. It’s about payroll systems, local benefits, contracts, and compliance. Things that shift depending on whether you’re bringing in an expat or hiring an immigrant. And those decisions? They ripple through everything.

That’s where Pebl comes in. Our Employer of Record (EOR) service handles all of it so you don’t have to. It’s one system, but it feels like you’ve got a whole team behind you. And it covers more than 185 countries, because going global doesn’t need to mean going it alone.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.