New regulations and services aim to speed up hiring of foreign expertise

The dual challenge is first to attract qualified people to our high-tax environment (and keep them here) and to get their residence and working permits in order. From a business perspective, the rules of the immigration and taxation game have just changed, for the better.

AmCham members and their guests were privileged to gather for a breakfast seminar at Ernst & Young on January 13. We got the story directly from two specialists, Sofia Arvidsson, Senior Consultant at EY and Catarina Wahlgren Sjöstedt, Senior Manager at EY.

Since number of applications for work and residence permits has gone up about 50% over the last six years, this has led to longer processing periods of about 3-4 months at the Migration Board. The waiting time can be a killer for some positions.

Americans working for less than three months in Sweden must have a work permit. If they are staying longer than three months, then they must also have a residence permit.

One of the biggest sticking points in getting a work permit approved is that the formal terms of employment must be equal or better than those provided under a Swedish collective agreement, and the relevant labor union must be consulted regarding its opinion. Clearly there are many details to sew up and this takes both time and expertise.

Under a new certification program launched by the Migration Board, companies may qualify to handle the work permit process, making contacts and negotiations, and certifying that the applications are complete and accurate. The advantage of using a third party? The certified applications are handled within seven days instead of several months! Ernst & Young has been certified for this service since October 2011.

More good news on the tax front. Starting this month (January 2012), it is easier to obtain an advantageous “expert tax” status for high-income personnel temporarily working in Sweden. In a nutshell, “high earners” making over 88,000 kr a month in salary and monthly benefits are eligible for the tax break.

Those making less than that can apply for the tax break under the old rules, which are based on qualifications. But just where the boundary goes can be discussed, depending on how benefits are classified, and how they are paid out. In some cases it may be in fact advantageous to a company to pay a bit more and make the employee a “high earner” – depending on contractual details.

The special tax break can be granted for up to three years, but the application must be filed within three months of the individual’s arrival in Sweden. There is also a new application form that makes things much simpler.

But there are always pitfalls. As one commentator put it, “If you’re applying under the old rules based on qualifications, it’s not just about the person’s qualifications; it’s also important to document the economic value of the role or position in the company.”

See presentations here.

Written exclusively for AmCham by Robbin Battison, Battison & Partners.