Law 14/2013, in force since September of 2013, has introduced benefits for the processing of work for intracompany transfers, as well as highly skilled professionals or managers of companies in Spain.
A clear benefit introduced by the Law for Investors is that the work permit applications are now handled by the Large Company’s Unit (“LCU”) within the Spanish Ministry of Labor. This means that the work permit approval is no longer subject to passing a labor market test as is the general rule for work permits. Processing at the LCU also simplifies the process for companies that will not have to apply for work permits for their highly qualified or management personnel in each and every local immigration office with jurisdiction over the employee’s place of work. Of further benefit is that now, the LCU is legally required to adjudicate the work permit application within 20 days of filing. Finally, work permit applications may be filed by an authorized third party--in other words, a power of attorney is no longer required to file a work permit application in this classification.
Note that the Law for Investors runs in parallel to the Spanish Immigration Act and its rules of implementation (also referred to as “general” legislation). It is a new and different law that sets out different rules from those set out in the general legislation in an effort to attract foreign investment and facilitate the movement of personnel within multinational companies. The primary benefits of the Law for Investors are set out below:
The general legislation has already established the process for transnational work and residence permits that typically apply to intracompany transfers. Both the transnational and the intracompany transfer work permit implemented by the Law for Investors do not allow local hiring. Specifically, this means that (i) the employee must maintain his or her employment agreement abroad and, where possible, social security contributions abroad, (ii) the employee or individual must hold a university level degree or minimum three years of professional experience and (iii) in the case of both types of permits, the company in Spain and company from which the employee is assigned to Spain must have a corporate connection. However, the intracompany transfer permit is more flexible than the transnational permit as follows:
- Intracompany transfer work permits may be filed even if the employee is physically present in Spain at the time the work permit application is filed. This means that the employee would not have to apply for a visa at the Spanish Consulate abroad when the work permit is approved. In contrast, for transnational work permits, the employee must be outside of Spain when the permit application is filed and a visa must always be processed when the work permit is approved.
- The employee or independent contractor must have worked for the company or any other company of the multinational group for at least three months prior to applying for the intracompany transfer permit. The transnational permit requires nine months of qualifying prior employment. Under the general legislation, obtaining a work permit for an independent contractor is close to impossible.
- The intracompany transfer work permit is issued in two-year increments. Transnational work permits (and their extensions) are issued for one year.
- An intracompany transfer permit may lead to obtaining a long term residence permit or even an EU long term residence permit after five years of legal residence in Spain (with benefits to obtain a residence permit in other EU countries) as long as the conditions are met. Spanish authorities are reluctant o issue long term residence permits to holders of transnational work permits.
- Intracompany transfer permits can be filed by mail, and do not require the individual filing the work permit application at the LCU. For comparison, transnational work permits require that the legal representative holding a power of attorney to process work permits must always personally appear before the LCU to submit the work permit application.
The law establishes even more beneficial treatment to obtain work permits at the LCU for highly skilled employees (or management foreign personnel of companies) that qualify. General immigration legislation has already implemented a fast track procedure, but the Law for Investors has relaxed certain requirements that a company or group of companies (referred to below as “the company”) must satisfy to access the LCU for work permit processing (general legislation does not permit consideration of conditions met by other companies of the group in Spain). Under the law for investors, the company must satsify just one of the following requirements:
- The company in Spain must have an average staff of more than 250 employees (as opposed to 500 employees which is required in accordance with the “general” legislation).
- The company’s net turnover in Spain must exceed EUR 50 million (as opposed to EUR 200 million in the general legislation), or its equity in Spain must be greater than EUR 43 million (as opposed to EUR 100 million established in the general legislation).
- The company’s average gross foreign investment in Spain during the three years prior to the relevant application is at least EUR 1 million.
- The company is dedicated to an activity considered strategic to the government.
- The company is engaged in a business project that the authorities recognize to be of general interest to the country because the project will provide a significant increase of job creation/employment or maintenance of employment.
Further, the Law for Investors includes graduates and postgraduates of Spanish Universities or Business Schools of recognized prestige as a new group of professionals identified as highly skilled that may process work permits at the LCU.
As is the case with intracompany transfer work permits, the initial work permit and its renewals will have a two year duration (general legislation establishes that initial permits must be valid for one year and the renewals will be valid for two years), until the employee obtains a long term residence permit after five years of legal residence in Spain.
In all cases, the foreign national’s family members (spouse and children under 18 years old or over such age that for health reasons are financially dependent) may process simultaneously or successively a visa or residence permit. Work permits processed at the LCU under the Spanish Immigration Act and rules of implementation only allow processing of family permits simultaneously with the employee’s permit.
In summary, with the Law for Investors the Spanish government has opened new opportunities for companies in the processing of work permits for intracompany transfers and management and highly skilled professionals.