1. Dwyer Legal Knowledge Base
  2. Employee Posting (General Information)

How could a company posting model look like?

The following article describes a typical posting model between two companies, with the assumption that the employee remains on the payroll of the foreign entity and is being posted to the German entity.

1. Employees remain on the home country (e.g. India) employment contract (and obliged to the Indian company under labour law).

2. The employee is offered a posting to Germany by the foreign company (the deputing entity) for employment with the German part of the company (the German hosting entity).

3. The German hosting entity offers the employee an employment agreement for the period of his stay and his job at the German company. The employee remains employed by the employing entity (and can, therefore, be recalled from that at any time by the deputing entity).

4. During the period of posting, the deputing company will continue to pay the basic salary, including, if necessary, the allowances required to meet German salary requirements.

5. In case of a social security agreement: The employee and the deputing entity jointly apply for a CoC (Certificate of Coverage) relevant authority (like EPFO in India) in order to obtain an exemption from the participation in the German Pension Fund System.

6. On the date of entry in Germany, a shadow payroll will be opened for the foreign employee to identify to which extent the employee is subject to income tax payments and social contributions.

The relevant payments need to be done to the relevant authorities.

With the return journey of the home country, the payroll will be closed again.

7. With the conclusion of the shadow payroll, the employee will also receive the payroll tax declaration, which he will then be able to use for his personal tax return to the end of the calendar year.

From an immigration law perspective, this construct can be used as a basis for applying for an ICT work permit. The prerequisite for this is that

• the parts of the company prove that they are connected

• the employee has at least a pre-employment period of 6 months for the deputing entity

• during the stay in Germany, the employee must be offered the same working conditions as an employee employed by the German company.


Please do not hesitate to contact us, if you need additional information or support with processing a company posting model for Germany.

Dwyer Legal Law Firm, Schwanthalerstr. 13, Aufgang IV, 80336 Munich
Tel: +49 (0)89 24 88 14 310, www.dwyer-legal.com

Note: Information provided in this Knowledge Database is for orientation only and not binding.