Temporary residence permit for intra-corporate transfer

ByOlya Chistenko

Due to the globalization of business, expanding trade, and the growth of multinational corporations, the movement of personnel of different levels between branches and subsidiaries for short-term assignments has significantly increased in recent years.

Navigating the complexities of relocating employees across borders can be challenging for multinational companies. The intra-corporate transfer temporary residence permit hereinafter – ICT) is a valuable tool that facilitates the transfer of key personnel, such as executives, specialists, and trainees, within the European Union. This permit, established under the EU Intra-Corporate Transferees Directive (2014/66/EU), allows non-EU nationals employed by companies outside the EU to temporarily work in an EU-based company or branch, streamlining cross-border mobility for businesses. 

In this article we explore the key aspects of the ICT residence permit, including eligibility criteria, the application process, and the benefits it offers to both companies and employees within the opportunities offered by Estonia. 

The temporary residence permit for intra-corporate transfer is designed for foreign nationals employed by companies located outside the European Union. It allows for temporary transfer of specialists, executives, or trainee employees to work at an Estonian subsidiary or branch of the parent company located outside the EU.

Eligibility

To qualify for an intra-corporate transfer residence permit in Estonia, the following conditions must be met:

  • Employment relationship: The employee must be employed by a company outside the EU.
  • Roles: The permit is available for:
    1. Specialists: Employees with specific expertise in the host entity’s operations.
    2. Executives: Employees responsible for managing a department or the entire business in Estonia. 
    3. Trainees: Employees undergoing training in business practices or company methods.
  • Prior employment: The employee must have been employed by the non-EU company before the transfer for at least 12 months for specialists and executives or at least 6 months for trainee employees.

Application process

An alien residing outside of the EU can apply for the ICT permit if her stay in Estonia is intended to be the longest within the entire EU transfer period. 

This type of residence permit is subject to the annual immigration quota. That means that before an application is submitted to the Estonian Police and Border Guard Board, the employer should get permission from the Estonian Unemployment Insurance fund to hire a foreign employee. Because it is important for Estonia to understand why employer made a decision to hire an employee who is not an Estonian citizen or a citizen of the European Union or an alien residing in Estonia on the basis of a residence permit, but from a foreign country; what are this employee’s professional background and expertise, which cannot be fulfilled with employees already residing in Estonia.

The requirement to comply with immigration quota can be overcome if the salary criteria is met.

Work Conditions for ICT Employees

Employees working in Estonia under an ICT permit are subject to Estonian labor laws. This includes regulations on:

  • Working hours
  • Rest periods
  • Overtime pay
  • Annual leave
  • Equal treatment and equal opportunities

Validity period and extension*

The ICT permit is issued for varying periods depending on the role:

  • Trainee employees: Up to one year.
  • Executives and specialists: Up to three years.

*Extensions are possible, but they must comply with the original terms set out in the employment contract.

Grounds for refusal or revocation

There are specific grounds on which the ICT permit can be refused or revoked. These include:

  • The host entity being established primarily to facilitate easy entry into the EU.
  • Illegal recruitment or employment practices by the host entity.
  • Bankruptcy or liquidation of the host entity.

The temporary residence permit for intra-corporate transfer allows foreign employees to bring their skills and expertise to Estonia, enhancing the country’s position as a dynamic hub for international business. However, companies must adhere to strict guidelines and labor laws to ensure compliance and avoid complications.

If your company is considering transferring employees to Estonia, it’s essential to understand the legal requirements and ensure the process is handled correctly. Our legal team helps navigate the complexities of intra-corporate transfers and ensure a smooth transition for your business and employees.

For more information or to discuss your specific situation contact us for a consultation.