International social security compliance challenges of intra-EU mobility of the third-country nationals under the EU ICT scheme

By Siobhan Owers, Zuzana Jasenovcoca and Iskra Nicolic Uskokovic

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In the ever evolving mobility industry, where businesses work globally, there is an increasing need to manage talent across borders. The right of free movement and freedom to provide services, are some of the fundamental freedoms upon which the European Common Market is based. The EU has sought to safeguard and facilitate these freedoms with its focus on the seamless intra-EU mobility of temporarily posted workers, whether they are EU citizens or non-EU citizens.

The right of free movement and free provision of services was initially restricted to European citizens, with third-country nationals (TCNs) normally excluded. The European Court of Justice recognized that this approach would seriously hinder the freedom of provision of services in the EU highlighted in the decision of the Vander Elst case (C-43/93), allowing third-country nationals to be posted freely across the EU to provide services without the need for an additional work permit in the country of posting. The Court specified that the host EU member state should not impose administrative formalities or conditions on TCN posted workers, providing services in another EU state, if they were legally employed by a service provider established in the EU.

EU intra-corporate transfers immigration scheme for third-country nationals
The EU seeks to ease the current administrative burden related to temporary assignment of highly skilled workers in order to facilitate EU mobility even further. These efforts are also aimed at mobility of TCNs within the EU and the goal is also to establish a common set of rights for such transferees when working in the EU, to avoid exploitation and distortion of competition. To achieve this, in 2014 the European Council adopted Directive 2014/66/EU on the conditions of entry and residence of third-country nationals in the framework of an intra-corporate transfer (EU ICT Directive).
The EU ICT Directive sets out regulations regarding the transfer of non-EU employees, employed with a sending entity outside the EU, to a host entity within the same group of companies inside the EU under the ‘EU ICT Card’ work permit. This provides greater immigration flexibility for non-EU employers with non-EU assignees who may need to work at several affiliated entities throughout Europe.
The intra-EU mobility scheme of TCNs under the EU ICT Directive is unique and responds to the needs of multi-national companies operating across borders. Nevertheless, practice has revealed some complications. One of which is the social security coverage in case of intra-EU mobility of the intra-corporate transferees, who are TCNs.

Social security compliance in case of intra-EU mobility of EU ICT
While EU ICT permits have been created to meet the demand of many international companies allowing their non-EU nationals to work in different EU countries, the consideration of social security compliance appears to have fallen by the wayside. This may have a serious impact and even result in an unexpected and costly social security non-compliance, even if all immigration formalities of EU ICT permit are in order.
Contrary to the immigration arena, where the EU ICT Directive was transposed to the local jurisdictions of the EU member states, there is a diverse landscape of bilateral social security agreements between the individual EU member states and third countries, which potentially may become applicable to third-country nationals, who are EU ICT transferees utilizing intra-EU mobility.

As a basic rule, the social security liability and coverage of a TCN may remain in the third (home) country (where the employment contract with the employer is maintained) in case a bilateral social security agreement exists. In such cases the TCN can demonstrate coverage in the home country by means of a social security compliance document, Certificate of Coverage (COC), issued by the third (home) country. If there is no bilateral agreement, or the individual is not eligible for a COC in the home country, social security liability will, in most cases, arise in the EU country that issues the EU ICT permit.

  • EU ICT permit intra-EU mobility into countries with a bilateral social security agreement

In case of intra-EU mobility in EU countries that do have a bilateral social security agreement with the third country, additional social security COCs may have to be issued by the country of origin because the host EU mobility countries will also ask for proof of social security coverage. This is problematic however, as some third countries refuse to issue several COCs for more countries for the same period.

  • EU ICT permit intra-EU mobility into countries without bilateral social security agreement

In EU countries that do not have a bilateral social security agreement with the third country, the posted ICTs, may become liable to the local social security in the target EU mobility countries, because they do not recognize the COC issued by the third country that issued the main EU ICT permit.

Practical example
The EU ICT Directive does not consider, whether the exemption from social security liabilities based on the bilateral social security agreement with a non-EU national’s home country and their first EU member state will apply to the other EU member states. For example, a situation of a US national with an EU ICT permit issued by Spain and a COC issued under the US/Spain Bilateral Social Security agreement, could trigger social security liabilities if then required to work in Germany.

The German authorities are not bound in any way by the COC obtained based on a bilateral treaty between Spain and the US, and could theoretically require that the transferee registers with the German social security system and starts paying contributions. This leaves an open question as to whether the transferees should obtain an additional COC, under the bilateral US/Germany social security agreement because of the intra-EU mobility to Germany.
The lack of legal certainty caused by the different approaches in the individual EU member states, carry risks of double social security liability, if one of the EU countries does not have a bilateral social security agreement with the third country of the intra-corporate transferee.


As global cross-border activities are an inevitable way of conducting business now and in the future, and as the sharing of information between different governments increases, comprehensive compliance in respect of intra-EU mobile workers is key for businesses. Immigration compliance can no longer be considered in isolation. Based on the example of EU ICT scheme, it is clear there is a distinctive inter-connection between immigration, social security and also labor law aspects of intra-EU mobility compliance requirements for the EU ICT transferees.

The unclear social security compliance consequences of the EU ICT scheme have not been resolved yet and are still under discussion today, at both EU member state and European level. Companies are advised to review their internal processes, and be cognizant not to view immigration and social security compliance in isolation of one another to ensure pre-arrival compliance for their EU ICT transferees.
In order to bring legal certainty for employers posting their third-country workers under the EU ICT, there is a need for a common European approach, to make sure that EU ICT scheme is as easy to use in practice as the intention of the law-makers undoubtedly was. A pan-European agreement on the social security approach to the third-country EU ICT transferees would also assure social security rights for these migrating workers and would facilitate the EU core values free movement of workers and free provision of services across the EU.

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