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Temporary Assignment of Employees to Iran – What You Should Consider Now

20Aug

Many companies will soon be preoccupied with the market opportunities in Iran because the economic and financial sanctions against that country will gradually be lifted. The reason for this is a treaty in the dispute over the Iranian atomic program, which the Peoples Republic of China, France, Germany, Russia, Great Britain and the USA agreed upon with Iran on 14 July 2015. In this context, Iran is again of interest to German companies as a business center: either for potential imports of raw materials or as a market for the export of German technologies. Since it is already possible to enter into contracts – which will take effect at the end of the embargo – the temporary assignment of specialists to Iran is a potential measure to quickly gain a foothold there or service project inquiries.

Marko Müller, who is responsible for the Global Mobility Services Division and therefore for temporary assignments of employees, makes seven recommendations to companies to optimally prepare for foreign assignments of skilled personnel:

1. Find out the prerequisites and the time frames for applying for visas as soon as possible before the date of the temporary assignment in Iran.

2. Inform yourself of the specifics of applying for work permits for employees on site: which documents are needed and whether the cooperation of the foreign client may be needed.

3. Obtain an overview of the tax risks and areas of activity in contracts, taking into account the local law and the double taxation treaty with Iran (e.g. withholding tax, operating sites, registration obligations).

4. Not every employee is willing to work abroad. Extensive preparatory discussions before the temporary assignment help to determine the personal and professional suitability of the employee.

5. The foreign assignment can have tax consequences for the employees involved. They may have to file wage tax exemption applications to avoid double taxation.

6. Germany has no social insurance treaty with Iran. Therefore, check the situation with respect to social insurance. If necessary, apply for supplemental insurance and compulsory insurance upon request [Antragspflichtversicherung] or a “spill-over” [Ausstrahlung] so that the German legal provisions regarding compulsory insurance and entitlement to insurance continue to apply abroad.

7. In doubtful cases and, particularly if the temporary assignment is in a crisis area, bring in a service provider who has extensive experience in the area and can react quickly if a crisis situation arises.