CRP International Relocation 1 — Questions and Answers
Question 1: What document must a relocating employee obtain before legally working in a foreign country?
- Tourist visa
- Work permit or work authorization visa (Correct answer)
- A letter from their employer
- An international driver's license
Correct answer: Work permit or work authorization visa
A work permit or employment-based visa is legally required before a foreign national can perform paid work in most countries.
Question 2: Which compensation approach pays expatriates based on their home-country salary plus additional allowances?
- Local plus approach
- Balance sheet approach (Correct answer)
- Host-country approach
- Lump-sum approach
Correct answer: Balance sheet approach
The balance sheet approach maintains home-country purchasing power by topping up salary with allowances for housing, taxes, and cost-of-living differences.
Question 3: What is 'tax equalization' in international relocation?
- Paying the same tax rate in both countries
- A policy ensuring an expatriate pays no more or less tax than they would at home (Correct answer)
- Splitting tax liability equally between employer and employee
- Exempting expatriates from all foreign taxes
Correct answer: A policy ensuring an expatriate pays no more or less tax than they would at home
Tax equalization neutralizes the tax impact of an international assignment so the expatriate is neither advantaged nor disadvantaged compared to staying home.
Question 4: A cost-of-living allowance (COLA) for an international assignee is designed to:
- Reward employees for accepting difficult assignments
- Offset the difference in purchasing power between home and host countries (Correct answer)
- Cover the full cost of housing abroad
- Replace the home-country salary entirely
Correct answer: Offset the difference in purchasing power between home and host countries
COLA compensates for higher goods-and-services costs in the host country so the assignee's standard of living remains equivalent to home.
Question 5: What is the primary purpose of a cultural orientation program prior to an international assignment?
- To teach the local language to fluency
- To prepare the employee and family for cultural differences and social norms in the host country (Correct answer)
- To reduce moving expenses
- To satisfy visa requirements
Correct answer: To prepare the employee and family for cultural differences and social norms in the host country
Cultural orientation reduces culture shock and improves assignment success by familiarizing assignees with business practices, customs, and daily life abroad.
Question 6: Which term describes the emotional disorientation felt when returning home after an extended international assignment?
- Culture shock
- Reverse culture shock (Correct answer)
- Assignment fatigue
- Repatriation lag
Correct answer: Reverse culture shock
Reverse culture shock occurs when repatriates find that home feels unfamiliar after adapting to life abroad.
CRP International Relocation 1
What document must a relocating employee obtain before legally working in a foreign country?