Intra-corporate mobility within the European Union: nearly a reality for multinational groups

Written on 6 Dec 2018

In 2014, the Parliament and the Council of the European Union (the "EU") adopted the European Directive 2014/66/EU on the conditions of entry and residence of third-country nationals in the framework of an intracorporate transfer (the "Directive"). The Directive enables multinational groups to 'optimally deploy their human resources by facilitating the secondment of non-European managers, specialists or trainee employees to the EU within the framework of an intra-corporate transfer and transferring them to other group entities in the EU. This is known as the Intra-Corporate Transferee Permit (the "ICT-Permit").

In 2014, the Parliament and the Council of the European Union (the “EU”) adopted the European Directive 2014/66/EU on the conditions of entry and residence of third-country nationals in the framework of an intracorporate transfer (the “Directive”). The Directive enables multinational groups to ‘optimally deploy their human resources by facilitating the secondment of non-European managers, specialists or trainee employees to the EU within the framework of an intra-corporate transfer and transferring them to other group entities in the EU. This is known as the Intra-Corporate Transferee Permit (the “ICT-Permit”).

As a consequence of the new regulation, holders of a valid ICT-Permit issued by a EU Member State can enter, reside and work in one or several EU Member States for more than 90 days in a 180-day period, provided that a long-term intra-EU mobility notification or application has been previously submitted in accordance with the implementing legislation of the relevant EU Member State. For shorter stays (short-term mobility), a previous formal notification may be required by Member States.

Pursuant to the Directive, 25 out of 28 EU Member States (the United Kingdom, Ireland and Denmark opted out) have committed themselves to implementing the ICT-Permit before 29 November 2016. However, despite the clear benefits of having highly qualified non-European employees working across Europe for different entities of the same company group, most of the Directive’s signatories failed to meet the deadline. Therefore, the ICT-Permits issued by countries that transposed the Directive into their national legislation by the deadline could not develop their full potential since their efficacy was limited to those countries that implemented the Directive.

One of these countries was Spain, which was the first EU Member State to incorporate the Directive into its legal system by approving Law 25/2015 of 28 July 2015, on the second chance mechanism, financial burden reduction and other measures of a social nature. Even before the Directive entered into force, part of its content had already been applied thanks to the Law 14/2013 of 27 September 2013, of support to entrepreneurs and their internationalization, which regulates intra-corporate transfers to Spain without intra-EU mobility.

Although a relatively high amount of ICT-Permits have been issued in Spain since 2015, the other Member States’ failure to implement the Directive has forced employees with Spanish work authorization to turn to other legal options in order for them to be transferred to work for group companies located in other Member States without having to obtain a new permit.

Fortunately, the previously described situation has changed and, as of today, 24 countries have fully implemented the Directive, Greece being the last country to do so in May 2018. Thus, multinational groups can now fully benefit from the opportunities offered by the IC-Permit, although it will be necessary to first check each EU Member State’s application procedure and the formal requirements (to determine whether notification or authorization is required) for transferees to work in the country under an ICT-Permit issued by another EU Member State.

For instance, the implementation of the Directive in Spain has provided the most flexible regime possible, establishing a quick, efficient and simplified procedure to apply for a Spanish ICT-Permit and allowing holders of an ICT-Permit issued by another EU Member State to be transferred to work in Spain upon simple notification.

In view of all the above and the high amount of employees transferred to Spain within the framework of an intra-corporate transfer during recent years, the number of ICT-Permits is expected to increase greatly in the coming months as all EU Member States put into practice their recent national regulations on intra-corporate transfers and clarify their internal procedures and requirements. The result will be widespread intra-EU mobility among multinational groups.