Business trip to Switzerland
Business trips are once again the order of the day and it is often quickly agreed that meetings will be held the very next day. However, if you have to cross a national border for this, then these quickly agreed meetings can lead to legally undesirable consequences.
The focus here is on the legal framework in the country where the meeting is to take place. It would be too nice and easy if there were uniform rules for this. There are a few basic rules that can be followed, but specific clarification should still be made.
In the following example, we will look at the Swiss perspective.
The industrial company Perplex AG has its parent company in Switzerland. Perplex AG is a medium-sized, globally active company and has subsidiaries in around 15 countries. However, they sell their products worldwide.
Among other things, the research department is also located in Switzerland. Since the products are marketed worldwide, it is a challenge to adapt the products to country-specific requirements and conditions. For this purpose, the product managers of the individual companies meet again and again in Switzerland.
At present, they are in the process of designing a completely new product. For this purpose, the research manager of Perplex AG in Switzerland has invited the managing directors for a 5-day workshop in Switzerland next week.
The managing directors of the national companies in Germany, France, Spain, USA, England, Ireland, Turkey and Qatar. The others can't make it because of the short notice and join by teams.
Can the 8 directors travel to Switzerland for the workshop without further ado?
From a legal perspective, the business trip must be examined for the following aspects:
- Labor law
- immigration law
- tax law
Social Security law
For simplification reasons, we assume that the managing directors each have their residence in the country as well as the nationality of the country for which they are managing directors.
In principle, all 8 managing directors remain subject to the labor law of their home country. Only the relevant mandatory legal regulations in Switzerland are generally applied to the 5-day workshop. The mandatory legal provisions include, among other things, compliance with the minimum salary, public holidays, vacations, and working and remaining hours.
There are various tools available in Switzerland for calculating the relevant minimum salary.
The first question to ask is whether the workshop constitutes "gainful employment" from a Swiss perspective. If the workshop goes beyond a mere exchange of information, then the workshop constitutes "gainful employment" from a Swiss perspective.
Consequently, all 8 directors need a work permit, unless they can be exempted from it based on the "8-day exemption".
Otherwise, either a notification via the notification procedure (applies only to the managing directors of Germany, France, Spain, Ireland, and England) or a 120-day permit would have to be obtained.
Switzerland has a double taxation agreement with all 8 countries from which the managing directors come. As long as no salary is paid to the managing directors from Switzerland, the costs are not charged to Switzerland and they do not stay in Switzerland for more than 183 days in a calendar year, there are no tax consequences in Switzerland.
Social security law
- From a social security perspective, we make a distinction based on the type of agreement being applied:
- Free Movement of Persons Agreement: Germany, France, Spain, Ireland
- Social security agreements: USA, Turkey, England (provisional today; it will enter into force on October 1, 2023).
- No social security agreement: Qatar
For the countries for which an agreement exists, the persons remain insured in their home country and are exempt from the social security obligation in Switzerland based on the agreement. Even though not all areas of insurance are mentioned in the social security agreements, Switzerland applies the exemption for all areas. The A1 or Certificate of Coverage (CoC) would have to be obtained for all persons concerned.
Only for Qatar, there is no social security agreement, which would result in a social security obligation in Switzerland. However, if the period of presence in Switzerland is less than 30 days, no social security contributions will be levied in Switzerland.
Based on our practical experience, we always recommend taking out additional international health insurance, especially if the person travels frequently.
Even on a business trip, there are several things to consider. The issue of work permits is the biggest challenge. Due to the short lead time, one or the other managing director may not be able to attend the workshop after all.
It, therefore, makes sense to talk about the upcoming possible trips with the employees concerned already at the beginning of the year, so that the necessary permits can be obtained or formalities can be taken care of.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.