Hello, dear employers!
UAtalents team together with White&Case company collected frequently asked questions and prepared information about how to hire Ukrainians as a Swedish employer. We want to give you more understanding of how it works in Sweden. Generally, we divided information into 5 different topics and so each topic we are going to analyze each separately:
- Residence and work visa;
- Employment contract;
- Social security insurance;
- Remote regular employee;
- Remote contract employee.
So, let's understand in more detail!
Residence and Work Visa
- Are Swedish employers allowed to employ refugees from Ukraine?
The Swedish government offers a temporary residence permit to all refugees from Ukraine, also called temporary protection visa (Sw. uppehållstillstånd enligt massflyktsdirektivet). By default statutory provisions a work permit is not automatically granted together with a residence permit. However, the temporary protection visa operates as a residence permit as well as a work permit for Ukrainian refugees, without the need for a specific job offer.
The temporary protection visa is generally not limited to certain areas of work or dependent on the remuneration level as would be the case under the default statutory provisions. However, special professional requirements (e.g. a license to practice medicine) must be complied with.
2. Is there a possibility to employ refugees before they receive a visa?
The employee must not employ a Ukrainian refugee that does not have a valid temporary protection visa. However, the employment can commence before a personal coordination number (Sw. samordningsnummer) has been assigned and before a decision on preliminary income tax has been received (see no. 7). If the employment commence before a decision on income tax the employer must apply an increased tax deduction.
3. Which documents must the employer request from the employee?
The employer must ensure the validity of the temporary protection visa and that the individual’s identity corresponds to the identity on the visa. Even if the temporary protection visa includes a work permit, it is important that the employer check that the visa includes a work permit. The employer should also request a copy of the decision from the Swedish Migration Agency. It is the employer’s responsibility to check that the visa is valid for the entire employment period. If there are any uncertainties regarding the validity of the visa, the employer is advised to contact the Swedish Migration Agency directly.
As under default statutory provisions, a control of register extracts from the criminal records (Sw. belastningsregister) must be carried out prior to the commencement of the employment if it is generally required for certain types of employments, e.g. for employment at schools.
- Is it necessary to provide an employment contract in the Ukrainian language?
No. The employment contract can be in Swedish, while it would also be feasible to provide it in English. Most important is that both parties have a mutual understanding of the purpose and contents of the employment contract. Pursuant to Swedish employment law, it is not necessary that an employment agreement is written, oral agreements are also valid (although it is generally advisable to have written employment agreements in place).
2. Does the employment contract need to provide specific provisions?
Since the employer must not employ a Ukrainian citizen without a temporary protection visa, it is advisable to include this as a condition precedent for the commencement of the employment. As noted under item 3 above, the employer is obliged to keep a copy of the documents in the personnel file of the employee and to observe its validity regularly. The copies must be kept for a minimum of twelve (12) months after the end of the employment. When employing a candidate with temporary protection visa the term of the employment may not last longer than the validity of the visa.
Social Security Insurance
- Do Swedish employers have to pay social security contributions for employed Ukrainian refugees?
For Ukrainian citizens employed in Sweden under a temporary protection visa, the Swedish labour law provisions apply. Ukrainian employees in Sweden are entitled to Swedish social security rights as any other employee. As such, the employer is obliged to pay statutory employer contributions (Sw. arbetsgivaravgifter) for Ukrainian employees. The Ukrainian employees also benefit from any rights under potential collective bargaining agreements which there employer is bound by.
2. Which documents must the employer request from the Ukrainian refugee?
The employer is required to notify the Swedish Tax Agency of the employment of a non-EU / -EEA citizen. The notification must be made by the 12th of the month following the commencement of the employment and can be made through this form ↩️
Moreover, the employer is required to apply for the employee to be registered for income taxes with the Swedish Tax Agency ↩️
In general, the Swedish Migration Agency shall assign coordination numbers for all Ukrainian refugees. The employee need to provide the coordination number to the employer to be used in payroll and for tax registration. However, if a coordination number has not been assigned, the individual’s date of birth can be used for tax registration. Once the Ukrainian refugee has been registered for taxes, the Swedish Tax Agency will assign him/her a coordination number if this has not already been assigned. If the date of birth was used at the tax registration, the employer is obliged to submit a new tax registration when a coordination number has been assigned.
Remote regular employee
- Is it feasible for an employer in Sweden to employ Ukrainian citizens that still reside in Ukraine as (regular) employees?
It is feasible for a Sweden-based employer to employ Ukrainian citizens that still live in Ukraine. The employment relationship will then generally be governed by Ukrainian employment, tax, and social security law. For this reason, it is recommended to employ the Ukrainian individual under a Ukrainian employment law contract as compelling Ukrainian law would apply anyway. However, please see also under “Engagement of Ukraine-Based Private Entrepreneurs” for an alternative to classic employment.
2. Is it possible to employ Ukrainian citizens that reside in the neighbour countries of Ukraine as (regular) employees?
3. Is the employer of a (regular) employee obliged to pay tax in Ukraine?
Sweden and Ukraine have entered into a double taxation treaty. According to this treaty, profits of an enterprise residing in one treaty country are generally only taxed in such country. However, if the enterprise has created a permanent tax establishment in the respective other country, profits allocated to such tax establishment are taxed in the country in which the tax establishment is situated. Generally, the risk of creating a permanent tax establishment exists when (i) an individual is employed for more than six out of twelve months, (ii) the activity is consistent with the core business of the employer and could not be considered as preparatory or auxiliary, or (iii) the work is mostly performed from one place (e.g. office or employee’s own apartment).
Remote contract employee
- Is it feasible for a company based in Sweden to employ a Ukrainian citizen that still resides in Ukraine as independent contractor?
Yes, an individual can be engaged as (independent) “private entrepreneur” if such individual is materially independent from instructions of the principal. The individual is responsible to register as such private entrepreneur. In such case the individual would be responsible to pay all income taxes in Ukraine. The invoices are generally not subject to VAT in Ukraine as services are provided to non-residents.
2. Is the employer (principal) of a Ukraine based private entrepreneur obliged to pay tax in Ukraine?
This is generally not the case. In case of the engagement of the individual as a private entrepreneur who will be acting independently and provide services to a non-resident entity, such non-resident entity generally does not create a permanent tax establishment in Ukraine. A case-by-case analysis of the respective tax law situation from a Ukrainian tax law perspective is nonetheless recommended.
3. What should be avoided in order to safeguard the status of the private entrepreneur as independent contractor?
The individual must be materially free from instructions by the principal. Therefore, specific deliveries should be pre-agreed in the individual contract/order. The individual should use its own equipment, including office/apartment space, and the email address and signatures should make the contractor status visible.