What is wage portage ?
Wage portage is defined by the act of a self-employed (as opposed to an employee) to subcontract to a specific firm the legal and administrative management of its activity in exchange of remuneration, the self-employed can then devote most of his available time to his services.
Portage does not exist in Luxembourg law. It is therefore necessary to pay particular attention to the notion of making available illegal labor (art. 133-1 of the Luxembourg Labor Code).
Difference between temporary work and portage.
Schematically, a temporary employment company (commonly called "boîted'intérim") collects from its customers the list of profiles which it will need to meet a temporary need. The requested resources are often poorly qualified and paid the legal minimum.
The temporary employment company is the legal employer of the temporary worker, who is seconded to the client for a specified period. This way, the service has no personal basis character.
Agency work is particularly developed in countries that have adopted a highly protective social legislation for employees and is therefore a "valve" to pair need in legal resources and production level. Temporary work is an industry highly regulated by law.
Schematically, a professional (that is to say a person with recognized expertise in a particular field), which agrees with a client on a mission, entrusted to a third party (a portage company) administrative and legal management of his service. The service is therefore inherently based on the person.
The third party can not, in any way, change the terms of the service object to portage, which implies an absence of subordination links, main characteristic of wage labor. The legal relationship between the professional (called the "worn") and the portage company is inherently commercial and does not, in theory, depend of labor law. That explains why porting activity is not subject to special regulations, except in France since summer 2008 (art. L.1251-64 & Art. L.8241-1 of the Labor Code).
Warning: the portage company refers to the socialization of the activity, not the taxation of thereof. Difference between portage and cooperative activities Cooperative activities are defined as the fact of a contractor to develop his business within an existing structure, without constituting a legally independent company. The project leader learns his contractor job while working in the firm, enjoying a pragmatic accompaniment.
The Cooperative Activities contractor has the opportunity to become a shareholder of the structure, which is never the case with a portage solution. In France, we speak of Cooperative Business and Employment (CAE), which is a legal SA or Sarl.
There is no similar legal framework in Grand Duchy of Luxembourg. International wage portage
European legal framework Regulations
(EC) n°883/2004 and 987/2009 have changed, since May 1st 2010, social security rules for workers from the European Union who move within the European Union.
Schematically, a resident of an X country may be hired by a company in a Y country and be posted in a Z country while being subject to the social legislation of the Y country.
Thus, a French resident may be hired by a Luxembourg company to work in Belgium. The conditions: 1/ be affiliated socially in Luxembourg for at least one month before the detachment and, 2 / the secondment period may not exceed two years (can be extended to 5 years).
Note that the old regulations (EC) n° 1408/71 and 574/72 continue to apply temporarily for third country nationals and for nationals of Member States of the European Economic Area (Norway, Iceland, Liechtenstein and Switzerland). Please refer to the FAQ section for the evolution of this point. Benefits of international wage portage, Luxembourg version.
Take the case of a French professional who wants to provide in Belgium.
He legally has the choice to pay himself in France (country of residence) or in Belgium (service country) but can as well choose an international portage company solution in a third country such as Luxembourg, the United Kingdom or Germany, in accordance with Regulation (EC) n° 883/2004.
For 100 units available, that is to say to convert to salary, we get:
|Country||Net before tax|
|United Kingdom||66,11 %|
Source : EUROSTAT July 2009 (Labor Market Statistics)
The average return of our international wage portage solutions, net of our commission and your taxes on income (deducted in Luxembourg and discharged in your country of residence) is 70% : if you charge 10 000 EUR excluding VAT per month under your business activity, you will receive an average of 7 000 EUR net of tax.
Be careful, international portage excludes benefits where the service taker (the customer) exercises a subordinate relationship on the worn (comparable according to the Luxembourg Labor Code either to temporary work or to temporary loan of labor).
For more information, contact us.