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Global employment briefing: Finland, January 2018

  • Finland
  • Employment law


New Act on intra-corporate transfers

An Act aimed at facilitating overseas business operations in Finland - the Act on the Conditions of Entry and Residence of Third-country Nationals in the Framework of an Intra-corporate Transfer (the ICT Act) - came into force on 1 January 2018. The Act implements the so-called ICT Directive (2014/66/EU) and aims to adopt a straight-forward process through which companies outside of the EU or EEA can conduct their operations in Finland, without disadvantage compared with other EU countries.

The most notable reform brought about by the ICT Directive is enhanced mobility within the EU for third-country nationals. The ICT Directive allows a degree of discretion to Member states in terms of implementation, so the precise conditions applying for employee mobility may differ, depending on the Member State to which the employee is transferred. In principle, however, in cases of intra-company or intra-group transfers, an employee who has been granted an ICT residence permit in one EU Member State may move within the company or group to work in another Member State.

From a Finnish perspective, the ICT Act seeks to regulate the entry of managers, experts or trainees, transferred temporarily to Finland from outside the EU via intra-company or intra-group transfers (or transferred to Finland via another EU Member State), as well as the permits and rights afforded to them during their stay.

Where such a transfer of a third-country national takes place directly to Finland, the employee may apply for an ICT residence permit. The ICT residence permit has various advantages over regular residence permits and may be granted for the full duration of the transfer period up to a maximum of three years for managers and experts and one year for trainees. To qualify for this permit, the employee (or the Finnish part of the company or group to which the employee is transferring) will have to provide specified evidence in accordance with the ICT Act.

If the employee has been granted an ICT residence permit in some Member States other than Finland then, depending on the State, the employee may be able to transfer to work in Finland within the same company or group under an unexpired ICT residence permit issued elsewhere. Conditions apply (as referred to below) but this reliance upon an existing permit will be available for transfers of to 90 days’ duration in a 180-day period. If the period of transfer will be longer than 90 days, the employee or employer will need to apply for a mobile ICT residence permit. Notification of transfer and, where applicable, a permit application, must be accompanied by certain documents specified in the Act and be submitted to the Finnish Immigration services before the employee’s arrival in Finland.

Finland has reserved the right to restrict short-term mobility, for example if the conditions of employment do not meet certain standards. Applications for a mobile ICT residence permit may be rejected on similar grounds. As a result, the Finnish Immigration Services has reserved the right to bar certain employees from working in Finland, even if they have a valid ICT residence permit within another Member State.