On May 13, 2014, the European Council adopted a directive that regulates the mobility of third-country (non-EU) nationals on intra-company transfer (ICT) assignments within Europe. As set out in the Directive, All EU member states* must implement the program within 2 ½ years from its publication in the Official Journal (November 29, 2016). While many EU countries have yet to address the Directive in their own national legislatures, Spain has recently become the first nation to implement the decree and several other countries have begun internal discussions on their own implementation plans.
* Notable exceptions: the United Kingdom, Ireland and Denmark have opted not to take part in the adoption of this Directive.
Aimed at “advancing the knowledge-based economy in the Union while fostering investment flows,” the EU ICT Directive (PE-CONS 58/14) provides greater immigration flexibility for companies with non-EU ICT assignees who may need to work at several affiliated entities throughout Europe.
The EU ICT permit is open to managers, specialists, and trainee employees. Assignees will be required to meet certain minimum employment requirements outside of the EU (with the exact criteria being determined by each member state issuing the permit). Generally, however, assignees will be required to work for their employer outside of the EU for a minimum period of either 3-12 uninterrupted months for managers and specialists or 3-6 months for trainees. The employment period must be immediately prior to the assignee’s transfer to the EU.
General Benefits within the First Member State
In its most basic sense, the EU ICT permit will allow holders to work at any affiliated entity within the country issuing the principal permit (the First Member State).
The permit will be valid for a maximum period of 3 years for managers and specialists, and 1 year for trainees. Should an initial permit be issued for a shorter validity, it will be renewable up to the maximum validity period for that permit. Immediate family members can obtain dependent status for the same duration, which will include work authorization for those of legal age.
Note that once the maximum validity of 3 years has been reached (or 1 year for trainees) the assignee may apply for a national work and/or residence permit in one of the Member States per national regulations, or for a new EU ICT permit. However, Member States are permitted to require that the assignee depart the country for a certain amount of time (6 months maximum) before the employee can file for a new EU ICT permit.
Mobility within the European Union
The most important characteristic of the EU ICT permit is that, under certain conditions, it will provide work authorization in other EU Member States in addition to the country issuing the permit. However, this benefit is not without limitation: the Directive distinguishes between short and long term mobility, and provides the individual Member States with some flexibility on how to incorporate this provision within their own national legislation.
Short Term Mobility
Holders of an EU ICT permit issued by one Member State (the First Member State) will generally be allowed to engage in short-term work activities in other Member States (referred to as a Second Member State, of which there can be more than one for the same assignee). The EU ICT Directive has defined “Short Term Mobility” as 90 days out of each 180 days per Second Member State.
When acting as a Second Member State, each EU country is permitted either to a) allow this Short Term Mobility to occur freely (e.g. not require any notifications, formalities, etc.), or b) require some type of notification from the sponsoring entity of their intention for an EU ICT permit holder to work at one or more affiliated entities within the Second Member State. Note that a sponsoring entity may also be required to notify the First Member State of this intention as well.
Should a Second Member State require notification for Short Term Mobility, this notification may take place at one of two events:
1. At the time of the initial EU ICT Permit application with the First Member State – should the entity foresee the need for Short Term Mobility to another EU Member State; or
2. As soon as the intended Short Term Mobility is known by the sponsoring entity – this can be after the start of the assignment.
EU ICT permit holders will be permitted to begin their work activities in the Second Member State as soon as the notification is filed; however, the Second Member State will have up to 20 days to object to the mobility. In that case, the assignee must cease any work activities in the Second Member States upon receipt of the objection notice. Note that objections can only be made by the Second Member State based on a limited list of reasons defined by the Directive.
Long Term Mobility
When mobility to a specific Second Member State is anticipated to surpass the 90 out of 180 day threshold, then this is considered Long Term Mobility. In this case, the Second Member State has two options when implementing the Directive into their national legislation:
1. Allow the assignee to work in the Second Member State for the Long Term Mobility based solely on the EU ICT permit issued by the First Member State. Note that this can occur with or without notification requirements, as described above for Short Term Mobility; or
2. Require that the assignee file for a Mobility Permit in the Second Member State.
In the case of the latter, processing times may take up to 90 days during which the employee will be allowed to begin working in the Second Member State. However, Second Member States are permitted to require that these applications be filed at least 20 days prior to the assignee beginning work in their country in order for this immediate (temporary) work authorization to be allowed.
Note that concurrent Short and Long Term Mobility procedures for an assignee will not be permitted. In other words, sponsoring entities in the First Member State cannot submit a Short Term Mobility notification while also filing for Long Term Mobility for that assignee at the same time. Thus, if it becomes clear during a Short Term Mobility period that the assignee will need to be in-country for more than 90 out of 180 days, the Second Member State can require that a Long Term Mobility application be filed at least 20 days prior to the Short Term Mobility expiration. If the application is approved, the assignee will be issued with a Mobile ICT permit for the Second Member State. Again, the potential grounds for denial are limited and defined in the Directive.
Implementation in Spain
At the time of this writing, Spain is the first and only EU Member State to implement the EU ICT Directive.
In order to be able to apply for the EU ICT permit in Spain (locally referred to as Traslado intraempresarial ICT UE), the assignee will be required to have worked for at least 3 months with the sending company immediately prior to the start of assignment in Spain, and must hold a University degree or 3 years of experience in a similar position. In order to qualify as a Manager the employee must be in a Director position.
As a Second Member State, Spain will not require notification for EU ICT permit holders to carry out work activities falling under Short Term Mobility (up to 90 days out of each 180 days). In the case of Long Term Mobility, a Mobile ICT permit will need to be applied for at the Dirección General de Inmigración, who will process the application within 20 days. Local registration at Town Hall will also be required in these circumstances.
Implementation in Other EU Countries
Most other EU countries have not yet addressed the EU ICT Directive within their own national legislation, or they are at the very early stages of internal discussions. While countries such as Estonia, Italy, the Netherlands, and Poland have begun such discussions, none seem to have an estimated date of implementation at this time. Based on information obtained from the authorities by our KGNM offices throughout Europe, it seems as though most countries (including some of the aforementioned ones) are likely only to implement the Directive close to the deadline of late-November 2016.
Furthermore, we consider it likely that France and the Czech Republic will be the next countries to implement this Directive. In France the related bill will be examined by the Senate in the fall of 2015. In the Czech Republic the first proposal of the related act is expected to become available within the coming weeks, which will then be posted to other ministries for their comments and objections. A date of implementation in the Czech Republic may become available by the end of this year.
How These Changes Affect You
Once it is more widely implemented, the EU ICT Directive will provide much sought-after personnel flexibility for multinational companies with offices in various EU countries. However, it is important to note that as long as Spain is the only country to implement the Directive, the benefits related to ICT mobility within the EU are generally not yet applicable. To the extent that the Blue Card directive can serve as precedent, we expect that the EU countries who have not yet implemented the Directive will not yet serve as Second Member States and will not recognize the mobility benefits provided by an EU ICT permit issued by another EU nation.
Thus, if you wish to pursue the EU ICT permit for an upcoming employee’s assignment to Spain, you should be aware that this may only provide your assignee with work flexibility in the long term (at the latest by the end of November 2016). For the short term, separate work authorization will likely still be required in most other EU countries and should be assessed on a case-by-case basis. (Note that, unrelated to the Directive, some countries do provide work permit exemptions under certain circumstances for short term work carried out by a foreign employee who holds a work/resident permit in another EU country.)
On a more positive note, one benefit that is already in effect for EU ICT permit is the flexibility within the First Member Country itself (currently only applicable in Spain). Holders of the EU ICT permit are allowed to work at any affiliated entity within Spain, and therefore are not restricted to the sponsoring entity only. Dependents are also allowed to work based on the permit as dependent of an EU ICT permit holder.
We will keep you up to date on any upcoming implementations of this Directive.
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This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. We would like to remind you that Immigration laws are fluid and can change a moment’s notice without any warning. Please reach out to your immigration specialist or your client relations manager at Pro-Link GLOBAL should you require any additional clarification. This alert was prepared by your Pro-Link GLOBAL Knowledge Management team. We worked with our PLG | KGNM Offices throughout Europe to provide you this update.
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