Social security position in Italy for foreign companies

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The social security position in Italy for inbound employees is becoming more important for multinational companies.

In fact, the presence of a Totalization Agreement with Italy may risult in keeping the contribution of the employee in the country of origin, with an obligation for the foreign company to pay social security in Italy or minor contributions.

In both cases, it is necessary to open a social security position in Italy in the name and on behalf of the foreign company and to fulfill the obligations on a monthly basis (LUL processing, payment of contributions, sending Uniemens, etc.).

The most frequent cases are:

1. The arrival of employees in Italy from companies resident in European Union without a registered office in Italy

An employee of a company based in the EU is required to carry out the business in Italy in smart-working mode. In this context, the employee is subject to the payment of social security contributions in Italy.

Therefore, the foreign company is required to open a social security position in Italy with the appointment of a representative who will run the payroll and pay INPS contributions on a monthly basis:

  • IVS contributions (to be paid by the employer and employee)
  • “minor” contributions based on the company sector (sickness, maternity, TFR Fund, unemployment, mobility, etc.).

2. The arrival of employees in Italy from companies residing in non-EU countries without a Totalization Agreement with Italy

An employee of a company based in a non-EU country is seconded to the Italian office for a period of three years with the role of supervisor.

On the basis of the assignment letter, the employee is required to carry out the activity in Italy.

As a result, the non-EU company is required to open an INPS position in Italy with the appointment of a representative who will run the payroll and pay INPS contributions on a monthly basis.

Without a Totalization Agreement, IVS contributions (payable by the employer and employee) and the so-called “minor” contributions (sickness, maternity, TFR Fund, Naspi, mobility, unemployment, etc.) are due.

3. The arrival of employees in Italy from companies residing in non-EU countries in presence of a Totalization Agreement with Italy

An employee of a company based in a non-EU country that has entered into a Totalization Agreement with Italy is seconded to the Italian office for one year with the role of Senior Engineer.

Since Italy has signed a Totalization Agreement with the foreign country which guarantees the continuity of social security payment in the home country, only “minor” contributions will be payable in Italy as follows:

  • DS
  • mobility
  • Severance indemnity fund
  • CUAF
  • CIG
  • disease
  • maternity
  • INAIL

Therefore, the foreign company is required to open a social security representation in Italy, running the payroll for the sole purpose of paying minor contributions.

For any further information please contact us.

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