Secondment regulations in selected countries

 There are several types of secondment: 

• Secondment by a temporary employment agency: secondment of an employee employed by a temporary employment agency to a client company abroad. This type of secondment is very specific (in particular in terms of financial guarantees), will not be covered in this newsletter. We stay at your disposal if details are requested.
• Provision of services: secondment of an employee abroad to perform services which (1) is carried out on behalf of and under the authority of the employer (2) within the framework of a contract concluded between the employer and the beneficiary of the service.
• Intra-group secondment: secondment of an employee within another company of the group abroad. Specific obligations may apply on top (rules about the "lease" of employee, re-invoicing, etc.).
• Own-account secondment: type of secondment analyzed in this newsletter. This secondment corresponds to situations in which: (1) there is no client for whom a service is being provided abroad (2) the secondment is carried out for the sole and exclusive account of the employer and (3) the seconded employee is not under the supervision of a host entity. For example for the participation in events (seminars, conferences, internal meetings, etc.), meetings with customers, business trips and other business travel without the provision of services.
  
  

When seconding an employee there are a number of points to consider, such as:

Immigration and visa formalities

• For information on immigration and visa formalities, please refer to our specific newsletter on this topic.
  
  

Employment law

• Find out whether it is mandatory, or only advisable, to draft an amendment to the employment contract of the employee concerned.
  
• Consider and analyze the mandatory legal provisions of the host country that may apply, notably in EU in accordance with the "Rome I Convention" of June 19, 1980 or the "Rome I Regulation" 593/2008/EC of June 17, 2008.
• Identify and list the information to be provided to the competent authorities in accordance with national requirements.
  

Social security law

• Within the EU, the AEA or Switzerland: European Regulation 883/2004 of April 29, 2004 generally authorizes secondment of up to 24 months. For longer periods, an exemption under article 16 of the regulation may be authorized.
• Otherwise, the existence of bilateral agreements with the host country must be checked. The period for which the employee's social security cover is maintained is stipulated in the bilateral agreement, ranging from a few months to five years. Depending on the terms of the agreement, this initial period of secondment may be renewed.
   
  

Tax law and income tax (IT)

• For the employee: The impact on income tax depends on factors such as function, place of residence and place of work. Cross-border employees may be subject to specific status.
• For the company: The question of permanent establishment must be assessed in relation to the secondment. Regarding the new rules for cross-border home employees, please refer to our specific newsletter on this topic.

Considering these issues, understanding the differences and legal implications of the various forms of secondment is essential to successfully managing this complex field. In this context, you will find below an overview of the relevant secondment regulations in selected countries and especially regarding the bilateral agreements that the countries concerned may have signed on taxation and social security.

Please find hereafter more detailed information about secondment in selected countries: Secondment regulations in selected countries