India – Social Security Agreement Signed with Finland
Recently, India signed a social security agreement (‘SSA’) with the Republic of Finland. SSAs like this one with Finland generally help foster cross-border business activity engaged in by multinational employers and their globally mobile employees by preventing double social security contributions and the loss of social security benefits.
Key Benefits of Agreement
The SSA provides for the following benefits, on a reciprocal basis, to Indian nationals working in Finland.
Exemption from Social Security Contribution in Host Country
Indian employees posted to Finland for short-term contracts of up to five years will not be required to pay social security contributions in Finland if they continue to make social security contributions in India and obtain a Certificate of Coverage (“COC”) to that effect.
The above exemption will also be available, under certain conditions, when the Indian company sends its employees to Finland from a third country.
Indian employees will be entitled to access/draw upon social security benefits accrued in the host country (as well as the home country) if they return to India after the completion of their service in Finland, provided all conditions for eligibility have been met.
Self-employed Indians in Finland will also be eligible for their accrued social security benefits in the host country (as well as the home country) upon their return to India, provided all conditions for eligibility have been met.
Totalization of Contribution Periods
The period of contribution in India will be added to the period of contribution in Finland for determining the employee’s eligibility for – and the amount of – social security benefits.
The signing of the India-Finland SSA is a welcome step as it can lead to cost savings in respect of international assignment programs and can help assure the social protection of Indian and Finnish cross-border employees. In addition, it is expected that the SSA will help encourage economic activity between the two countries.