News & Events

Switzerland : Entry into force of a Social Security Agreement with Brazil and consequences for Swiss Companies

The Social Security Agreement between Switzerland and Brazil (hereinafter SSA) signed in April 2014 has recently came into force on the 1st of October 2019. Its main purpose is to facilitate cross-border mobility and the movement of personnel between the two countries. However, before seconding employee’s to Brazil in compliance with the SSA it is highly recommended to analyze any potential impact on Swiss companies.


The SSA conforms to the recent social security totalization agreements Switzerland has concluded and is compliant with international standards.

The SSA determines the applicable  social security scheme and sets up the principles of a coordination between the systems in place.  As a general rule laws related to social security are territorial. A worker shall be subject to the legislation of a single state only, usually the State in which the employee’s activity is carried out. Notwithstanding this principle, there are exceptions, including secondment in compliance with the terms and conditions of the  SSA. The SSA eliminates double contributions for workers temporarily assigned in an other country. However, the question of levying social security contributions for branches of insurance not covered by the agreement remains.

Application fields

The personal scope of the SSA applies to any insured person from one of the two countries, regardless of their nationality. The insurances covered by the SSA are state pension, survivors’ insurance and disability insurance. The SSA sets out the criteria for determining the social security system applicable to international mobility and establishes principles for the coordination between the Swiss and Brazilian pension and provident schemes. The agreement incorporates the principles of aggregation of insurance periods in the various schemes and pro rata calculation for the determination of benefit entitlements. Should the  amount of a pension not be sufficient, a reimbursement  of contributions would also be provided .


In accordance with the SSA, secondment means that a person employed by an employer whose place of business remains in one of the contracting countries, is temporarily sent to the other country. Posted employees are exempted for a maximum of five years from mandatory social security contributions in the host country.

During the secondment period, as per the SSA, a direct subordination related to the employment relationship must exist between the seconded employee and the employer from the home country. This direct subordination must be proved if needed. It means that seconded employees perform their work in the country of assignment on behalf and under the direction of the employer from the home country.

Consequences for Swiss companies from a social insurance point of view

The main advantage of the SSA is that seconded employees can be maintained in a single social security system, so as to avoid in principle the risk of double taxation. Seconded employees maintained in the social security system of their country of origin can benefit from an exemption of contributions in the host country for insurance branches covered by the SSA.

Administrative arrangement

The competent authorities of the contracting countries have concluded an administrative arrangement defining the necessary measures for the SSA application.

Transitional provisions

As stated in the SSA, the secondment period may not exceed a maximum duration of five years.

Employees who are already assigned from a contracting state to the other, just before the entry into force of the SSA, can benefit from an exemption of social contributions in the host country if they submit a formal request for a secondment certificate (issued by the competent institutions of the sending state) within three months as of the 1st of October 2019 (date of entry into force of the SSA). At the earliest, the exemption will only be possible after the entry into force of the SSA.

The competent institution in each contracting state will issue the secondment certificate on a case by case basis, provided that the employee has been maintained on a voluntary basis (continued or optional AHV insurance in the case of Switzerland) as part of their expatriation prior to the date of entry into force of the agreement, October 1st 2019.

However, uncertainties remain in Brazil

Regardless of the SSA concluded, Brazilian domestic law usually requires the conclusion of a local employment contract in Brazil with the host entity for foreign employees according to the work permit requested.

This requirement could in practice compromise the application of the SSA concluded with Brazil and the implementation of secondment in the meaning of social security law. Such secondment requires the maintenance of a relationship with the employer of origin, that could be questioned whether a local contract is to be concluded.

Uncertainties remain as to whether seconded employees will be exempted from any local social contributions in the event of a local employment contract, still required for immigration purpose in Brazil for seconded employees.

The risk in this case would be either :

  • a refusal from the competent institution to issue a certificate of secondment (although this should not happen)
  • or a requirement from employers to pay social contributions in Brazil for the insurance branches not covered by the agreement. In this case, full or part of the social contributions not covered by the agreement could be required locally, specially the withholding of local contributions under the FGTS (wage guarantee fund) intended to grant severance payment as part of employment termination.

The competent Swiss social security authorities have been informed of the issues raised. While the Swiss authorities think hat a certificate of secondment could be issued even in the presence of a Brazilian local employment contract (on the basis of Article 7 of the Agreement), there could nevertheless be a possibility of obtaining a derogation agreement (on the basis of Article 11) between the two Swiss and Brazilian social security bodies to maintain Swiss social security. In such cases Brazilian social contributions within the limit of the SSA scope would be exempted.

Conclusion and recommendation

The SSA ensures a possibility of secondment and a coordination between the systems in place which did not exist before. However, caution is recommended regarding the consequences in terms of social security contributions applicable in the event of secondment. Indeed, some of the local contributions could, despite the SSA, be required in whole or in part in Brazil, beyond the scope of the agreement, subject to a derogation agreement between the competent institutions.

*** The information enclosed within the present newsletter are not exhaustive and do not cover necessarily all legal aspect of the subject. This in no case can replace a legal professional advice particularly regarding the considered case under any particular situation. Copyrights are reserved, except with prior written consent.

For further  information please contact

ITX – International Mobility Consulting Department

Emilie Rulland

Chief Legal Officer & Head of International Mobility Consulting Department

Direct line: +41 22 309 35 61