The document provides an overview of key legal considerations for international assignments, including employment law, immigration law, and tax law. It discusses the current positions and challenges in South Africa as well as recommendations. For employment law, challenges include jurisdictional issues and work permit problems. Recommendations include clarifying which country's law applies and ensuring proper work authorizations. For immigration law, challenges involve difficulties obtaining visas. Tax law considerations include potential double taxation and changes in social security coverage.

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6 May 2015
Update: Essential Legal Considerations for International Assignments

2. Essential Legal Considerations for International Assignments
Into SA “inbound”
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Out of SA “outbound”

3. Essential Legal Considerations for International Assignments
Employment
Law
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Tax Law
Immigration
Law

4. Agenda
Employment Law considerations
• Current position
• Challenges
• Recommendations
Immigration Law considerations
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Immigration Law considerations
• Current position
• Challenges
• Recommendations
Tax Law considerations
• Current position
• Challenges
• Recommendations

5. Employment Law considerations
• Current position
• Challenges
• Recommendations
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6. Employment Law considerations – Current position
In any situation, the first consideration is
always to determine which country’s law
governs the employment relationship.
Current position in South Africa:
− Inbound
South African courts consider factors linking
the employment relationship to South Africa:
Underlying
Assignment
Letter
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South Africa’s labour law applies to all
workers in South Africa, including foreign
workers, and even illegal foreign workers
− Outbound
South Africa’s labour law generally
doesn’t apply to South Africans working
abroad
Foreign Law
Underlying
Contract

7. Employment Law considerations - Challenges
Jurisdictional challenges to avoid:
• Employee being in a position to choose which country’s law to rely on
• Employee being able to claim under both countries law
• Employee being able to rely on local labour law, where the employer thought same was not possible
• No clarity as to which entity (home or host country) is to fulfill employer obligations
Work permit challenges to avoid:
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Work permit challenges to avoid:
• Employee being employed without having permission to work
• Employee working illegally
Contractual challenges to avoid:
• Whether termination of an international assignment gives an employee the right to be employed in the
home country
• Whether an employee is entitled to be repatriated if the international assignment is terminated by
either party
• Whether benefits can be unilaterally changed in the event that an employee decides to take up
employment in the host country at the end of an assignment

8. Employment Law Considerations - Recommendations
• With every international assignment, whether inbound or outbound, ask the following
questions:
• Which country’s labour law applies?
• What are the obligations placed on the parties?
• How to ensure compliance?
• For employment, secondment, and transfer agreements consider clauses on:
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• For employment, secondment, and transfer agreements consider clauses on:
• Who the parties are (identify who has the employer obligations)
• Length of the assignment (Labour Relations Act changes on fixed term contracts)
• Jurisdiction (based on what local law and foreign law states)
• Work visa (to prevent unlawfulness but also to prevent having to pay an employee who is not entitled
to work for any period of time)
• Draft a company policy on international assignments covering all aspects of international
assignments (helps to prevent and mitigate disputes)

9. Immigration Law considerations
• Current position
• Challenges
• Recommendations
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10. Immigration Law considerations – Current position
Recent amendments:
• Employment Services Act 4 of 2014
• Act was signed on 3 April 2014. The commencement date is still to be proclaimed.
• Preamble: “…to facilitate the employment of foreign nationals in a manner that is consistent with the
objects of this Act and the Immigration Act“.
• Section 8 (2) The Minister may make regulations which regulations may include-
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• Section 8 (2) The Minister may make regulations which regulations may include-
(a) satisfy that there are no other persons in the Republic with suitable skills to fill a vacancy;
(b) use of public employment services or private employment agencies to assist in recruiting a suitable employee who
is a SA citizen or permanent resident; and
(c) preparation of a skills transfer plan in respect of any position in which a foreign national is employed.
• Section 10 The Minister may make regulations requiring employers to notify the Department of—
(a) any vacancy or new position in their establishment;
(b) the employment of any work seeker referred by a labour centre; and
(c) any matter necessary to promote the provision of efficient matching services.
• Immigration Act 13 of 2011 and Immigration Regulations, 2014
• New Act effective as from 26 May 2014. Regulations signed into law on 16 May 2014.
• Extensive changes regarding applications for work visas.

11. Immigration Law considerations - Challenges
• Difficulty obtaining work visas, in particular:
• No visas for interns or students wishing to receive training in South Africa
• Need for applicants to appear and apply in person
• Inability to change the type of visa from within South Africa
• Corporate Work Visa: status cannot be changed or renewed within South Africa. Applicants must prove
that at least 60% of the total staff are South African citizens or permanent residents.
• Critical Skills Visa: may not exceed 5 years and is subject to a list of critical skills the country needs.
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• Critical Skills Visa: may not exceed 5 years and is subject to a list of critical skills the country needs.
• General Work Visa: requires a certificate from the Department of Labour.
• Intra-Company Transfer Visa: may need to return to home country to apply for new 4 year visa or the
balance of same.
• Section 11(2) Visitors Visa: need to provide motivation letter in support of application.
• The abovementioned challenges also result in longer processing times and increased costs
and logistical issues for employers.

12. Immigration Law considerations - Recommendations
• In employment, secondment and transfer agreements ensure there is a work visa clause
covering:
• No employment relationship comes into being without a work visa
• No work to be performed without a valid work visa
• No payment for any period where no work is performed
• Take into account that it may be required to use public employment services or private
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• Take into account that it may be required to use public employment services or private
employment agencies to assist in recruiting a suitable employee who is a SA citizen or
permanent resident.
• Take into account that a Skills Transfer Plan may be required to be drafted and implemented
and reported on.
• Bear in mind that even a foreign employee without a work visa is entitled to rely on the South
African labour law. (Consolidated in legislation for the first time.)
• Through trial and error, determine which interpretation is being followed by particular foreign
missions or DHA offices locally.

13. Tax Law Considerations
• Current position
• Challenges
• Recommendations
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14. Tax Law considerations – Current position
SA – German Double Taxation Agreement:
Article 13 – Remuneration of a resident of Germany will be taxable only in Germany unless
employment is exercised in SA, in which case income is taxable in SA.
Exceptions:
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Exceptions:
The income of the German resident working in SA is taxable in Germany; if
(i) The German resident is in SA for less than 183 in the SA tax year; and
(ii) Remuneration is paid by an employer who is not a resident of SA; and
(iii) The remuneration is not borne by a permanent establishment of the German employer in
SA

15. Tax Law considerations - Challenges
• Employee’s social security cover in the home country can be cancelled / employee banned
from cover;
• Increased tax due to residency requirements in both countries (taxes paid in host country
may be credited against taxed paid in the home country);
• Increased tax on exiting Germany;
• South Africa’s tax regime can be less favourable for employees if salaries not grossed up
(often referred to as tax equalization program)
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(often referred to as tax equalization program)

16. Tax Law considerations - Recommendations
• Before concluding a secondment agreement, consult a tax advisor;
• Have tax calculations performed by a tax expert;
• Have the secondment agreement reviewed from a tax perspective.
Important clauses of the secondment agreement effecting tax:
• Relocation costs;
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• Relocation costs;
• Employer provided accommodation;
• Contributions to foreign retirement funds;
• Contributions to foreign medical aid funds;
• Currency that remuneration is paid in;
• Remuneration by way of split package for services in host and home country

17. Your Contacts
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Telefon +49 (30) 810 795-51
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Rödl & Partner Johannesburg
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2007 Bedfordview
Telefon +27 (11) 479 30 00
Fax +27 (11) 479 30 33
dieter.sommer@roedl.co.za
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