New immigration rules for intra-corporate transferees to Germany
By Marius Tollenaere
In May 2014, the Council of the European Union adopted the European Intra-Corporate Transferees Directive (ICT Directive) that will apply in all EU Member States except Denmark, Ireland and the UK. On August 1, 2017, the ICT Directive will come into force in Germany.
The ICT Directive outlines and regulates the mobility of third-country (non-EU) nationals to the EU under an intra-company transfer (ICT) and aims to provide greater immigration flexibility for companies with temporary assignments of non-EU nationals.
More specifically for Germany, the ICT Directive will introduce two new immigration categories for intra-corporate transferees and new rules on short-term labor mobility of up to 90 days in Germany.
With the ICT Directive, the European Union had aimed to fulfill its obligations as a member of the World Trade Organization (WTO) in the context of GATS Mode 4, which governs the presence of a natural person in other WTO Member States for cross-border trade. As a member of the WTO, Germany already follows these rules and will not face substantive changes to its system of governing the entry, stay and work rights of third-country nationals who are assigned from an entity abroad to an entity of the same corporate group in Germany. However, it does introduce new options for intra-EU mobility, which could prove to be strong compliance tools and may lead to new developments in the wider corporate migration spectrum.
The new ICT rules will only apply to third-country nationals: Citizens of EU and European Economic Area Member States are not affected, as they enjoy free movement in Germany. More favorable rules may still apply to intra-corporate transferees who can make use of the best friends immigration category (Australian, Canadian or United States citizens). The EU Blue Card rules will also remain unchanged. A German EU Blue Card may still be used as a work permit for an assignment as long as the employment contract with the sending entity is put on hold and a new German employment contract is issued by the receiving entity.
ICT Card (ICT-Karte)
The most important new work permit category is the ICT Card, which will be regulated under the German Residence Act (Aufenthaltsgesetz). The ICT Card will be issued for assignees in a specialist, manager or trainee position who are transferred from an entity of their company outside the EU to an entity in Germany for a period of more than 90 days and less than three years (one year for trainees). For the first time, the terms ‘specialist,’ ‘manager’ and ‘trainee’ have been defined by law. This will not necessarily result in more clarity, particularly as it remains unknown whether the Federal Employment Agency (FEA) will change its current practice for the definition of a specialist. To ensure an appropriate level of seniority regarding qualification, all assignees must have been employed for at least six months with the same employer prior to the assignment. This is a change from the current scheme in which 12 months of company tenure is required.
The assignment may not last for more than three years. There is also a question surrounding initial assignments to Germany that are less than 90 days’ duration, as they are not eligible for the ICT Card, which only applies to assignments of more than 90 days. It is also not applicable for a short-term notification, as a longer initial assignment to another Member State would be required. Also, not all assignments of up to 90 days are business trips and therefore require permission to work, as they do not fall under any of the business visitor exception clauses. A solution may be for these assignments to be administered under the German GATS ICT rules, which are the current basis for ICT permits.
Once an assignment is completed, the individual must serve a cooling-off period of six months before becoming eligible to obtain a new ICT card.
One reason for rejection of an ICT Card application is when the receiving entity has been founded for the sole purpose of serving as a receiving entity. It is unclear how this will be interpreted by the immigration authorities considering that some industries, such as IT services and outsourcing, tend to be built on a strong international workforce with only a few administrative local staff in Germany.
The ICT Cards, as with other permits that require the approval of the FEA, cannot be used for contracting staff out to clients. Employers always need to make sure their client engagements do not constitute labor leasing (Arbeitnehmerüberlassung) and are always services rendered for the client with responsibility for the assignee remaining with the employer.
Short-term work trip notification
The bill introduces a notification system for work trips of up to 90 days for ICT Card holders of other EU Member States to Germany. Once the intention to send an employee to Germany has been confirmed, the sending entity in the first Member State must notify the German Federal Office for Migration and Refugees (Bundesamt für Migration und Flüchtlinge, BAMF) of the assignment to Germany in advance of the trip. The BAMF will forward the notification to the local immigration office responsible for the assignee’s future place of work in Germany. The immigration office can deny the assignment within 20 days of receipt of the notification from the BAMF. This notification assumes that the conditions of the assignment in Germany are legal and the assignee may start working immediately. After the 20 days, the entire stay will be deemed legal.
This short-term mobility right is an alteration to the Schengen short-term travel regulations, which only allow third-country nationals who are in possession of a work and residence permit of an EU Member State to stay in all other EU Member States for up to 90 days within a combined 180-day period. ICT permit holders, however, can stay for up to 90 days within 180 days in any Member State if they are traveling for work purposes. For example, while an EU Blue Card holder from France may only have a business trip to Germany for 90 days before they must return to France, their colleague with an ICT permit may travel to Belgium for another 90 days after their stay in Germany.
The German ICT bill makes the BAMF the receiving authority of the short-term mobility notification. The BAMF is a new player in the field of corporate immigration processes that so far have primarily been handled by the Federal Employment Agency (FEA). The FEA has long-standing experience of the peculiarities of assignments and short-term work trips and its expertise will be available to the notification process. However, the FEA will only be part of the process once a notification has been forwarded to the relevant immigration office and only if that immigration office decides to involve the FEA for expertise that neither of the other authorities has. In light of the 20-day deadline, this is a long way to go. It may lead to many notifications running into the 20 days without the option for detailed scrutiny of the legality of the underlying assignment.
On the other hand, the notification may develop into a strong tool for ensuring business traveler compliance throughout the EU. It will for the first time enable employers to both legally and easily process work assignments without having to start lengthy work permit processes, which makes it more attractive to have employees perform professional activities as a business visitor without a work permit. This may lead to a new approach whereby the default position of any business traveler follows the notification process.
Mobile ICT Card (Mobile ICT-Karte)
For long-term intra-EU work mobility, a second ICT permit will be introduced, called the Mobile ICT Card. This permit assumes that an individual has first been assigned to an entity in another EU Member State and will then move to Germany for a second assignment while still being primarily assigned to the entity in the first Member State. If the second assignment is scheduled for more than 90 days, a Mobile ICT Card can be obtained for Germany. This permit may not be issued for a period longer than the initial assignment. If that were the case, Germany would have to issue an ICT Card instead. If the Mobile ICT Card is duly filed, receipt of the application by the immigration authority will also lead to a legal fiction permitting working in Germany for up to 90 days.