As businesses continue to expand across borders, navigating the legal, tax, and social security aspects of secondments and international assignments becomes crucial. Whether temporarily moving employees within Bulgaria or abroad, understanding the key distinctions between these two forms of mobility is essential for ensuring compliance and safeguarding both employer and employee interests.
Understanding Secondments and International Assignments
A secondment involves the temporary transfer of an employee to a different location, either within Bulgaria or overseas, while maintaining their original employment relationship with the home country entity. Throughout the secondment, the employee remains integrated into the home company’s workforce and is typically expected to return to their original role upon completion.
An international assignment, however, often signals a more permanent relocation. In these cases, employees may enter into a new employment relationship with the host country entity under local law, usually for a longer period and often aligned with strategic expansion initiatives.
Key Labour, Tax, and Social Security Differences
For secondments, employees usually retain their home country tax residency and remain covered by their national social security system, benefiting from the protection of bilateral agreements or EU regulations where applicable. Their payroll and employment terms continue to be governed by their home employer, creating minimal disruption to their legal status.
In contrast, expatriates on international assignments often establish tax residency in the host country and transition into its social security system. This shift can impact access to healthcare services, pension entitlements, and social benefits — factors that vary widely between jurisdictions. The original employment contract is commonly suspended, with a new local agreement put in place for the duration of the assignment.
Payroll arrangements also differ significantly. While seconded employees typically remain on the home country payroll, expatriates are often shifted onto the host entity’s payroll or managed through a dual system to meet local compliance obligations.
Eurofast’s Take
Cross-border employee mobility is a complex process that demands thorough legal, tax, and HR planning. Missteps can lead to compliance risks, financial penalties, or loss of key talent.
At Eurofast, we provide comprehensive support in structuring secondments and international assignments in Bulgaria and across Southeast Europe, the Middle East, and the Balkans. Our experts ensure that every relocation plan is fully compliant, tax-efficient, and aligned with your business strategy — allowing you to focus on growth while we handle the complexities.
For further information, please contact us at [email protected]