8th September 2020
Switzerland has long had its appeal for contract professionals. Aside from the unparalleled landscapes and chocolates that attract many to the location, the numerous opportunities in financial services and technology make it an ideal location for expert professionals seeking work in these fields. However, with slight nuances in tax regulations across its cantons, ensuring your contractors are compliant when operating in the destination is complex to say the least. And in the latest move by local authorities, placing contractors in Switzerland looks set to become more intricate.
Swiss compliance update
It was confirmed at the end of August that when a non-Swiss based agency is placing a candidate in the destination under a permanent or contract status, there will need to be two Swiss intermediaries involved in the placement rather than just one. This is a new requirement introduced by the authority which issues Swiss staffing licences (SECO).
As a result, some of the local payroll providers are working together to support these transactions by having two of them collaborate in a chain. It is important to note, however, that the two intermediaries in the chain cannot in anyway be able to control one another or share directors, owners, shareholders or Ultimate Beneficial Owners (UBO’s). This may result in slightly higher fees for the local services as there will now be two parties rather than one in the chain.
This was implemented by SECO as a result of complaints from local agencies that there was an unfair advantage being given to overseas agencies with Swiss clients.
Travel restrictions changing: here’s the latest
Of course, beyond the legislative changes in Switzerland, recruiters placing contractors here need to be aware of the constantly changing travel restrictions that are being implemented as governments continue attempts to limit the spread of Covid-19.
The following information is correct as of 31st August, but note that restrictions are changing rapidly, so it’s advisable to seek out the latest rules before making a placement.
As of the end of August, how individuals transit Switzerland has changed in order to prevent people using loopholes in country entry requirements by travelling in transit through a location that has not been marked as high-risk.
This means that that anyone departing from a country with a high number of Covid cases will not be able to transit through any of Switzerland’s international airports. Before this decision was made by the Swiss Federal Council, travellers from banned locations had been able to enter the country by stopping over in a non-high-risk location as the deciding factor for entry into Switzerland was based on the location of the incoming flight, not an individual’s original destination.
By means of explanation, the following was published by the State Secretariat for Migration in a press release:
“Under the new rules, which apply from August 31, the country of departure, not the stopover country, determines whether travellers may enter Switzerland. For example, it is no longer possible for third-country nationals to fly to Switzerland from the USA via Toronto.”
This doesn’t, however, impact Swiss and Schengen or EU residents who can enter the country from any location in the world, though they may be required to quarantine for a set period depending on the number of cases in the destination they’re travelling from.
Where there is an absence of direct flights from countries including Australia, Canada, Georgia, Japan, New Zealand, Rwanda, South Korea, Thailand, Tunisia, and Uruguay, residents will be exempt from these changes if they have to change planes in a high-risk country on the condition that they do not leave the internal area when making this change.
At the time of writing, all countries outside the Schengen area were considered high-risk countries by Swiss authorities, with the exception of:
- Holy See
- New Zealand
- San Marino
- South Korea
For any of your contractors able to relocate to the country for work, it is highly advisable that they have adequate health insurance. While we’ve long advised that this is taken out by contract professionals before a move across borders, in the current pandemic it is quite simply crucial.
Change afoot at the end of September?
Further developments in Switzerland could also soon be on the cards as the country edges closer to a day of voting on the 27th September. Previously delayed in May due to Covid-19, citizens will be given the chance to vote on five key concerns at the end of the month. The most crucial one of these is in relation to the ending of the free movement of persons which the country has had access to since 2002 without being a member of the EU. Should this particular referendum be voted in, it could end the Swiss model as we know it and would end all of the Bilateral Treaties for Switzerland which could be hugely damaging on the local economy. It’s perhaps no surprise, then, that 61% of voters are currently against this particular referendum.
Placing contractors in Switzerland: get expert advice
Clearly there’s a lot of change happening in Switzerland at the moment that recruiters need to be aware of, but it’s not the only destination that is reporting an upheaval in business as usual.
Now more than ever, partnering with an expert to ensure your business, it’s recruiters and the contractors they place are compliant is crucial. The compliance landscape is rapidly changing as governments worldwide continue to clampdown on tax fraud and evasion, with some implementing aggressive actions to recover much needed funds as Covid-19 continues to impact economies worldwide. And with the pandemic shifting the way contractors work – with an increasing number of professionals able to operate remotely from their home country – the risks for staffing companies grows.
But the opportunities are lucrative and certainly likely to increase as global employers continue to accept and embrace a more flexible working environment. Demand for contract professionals remains high and while in-country resources are the priority for many at the moment due to travel restrictions, there is a back-log of skills requirements for external talent that will certainly create an uptick in need for international contractors in the very near future.
6CATS International is here to help your agency meet this demand in a compliant way – contact the team today to learn more.