Sending Employees to the USA

When a company sends one of its European employees to the USA, there are a number of consequences to keep in mind. They cover visa and employment law as well as tax and social security. This page shows you what really matters.

Find out more about living and working in the USA here.

1Length of the assignment

First, you need to distinguish between short, medium and long-term assignments. This distinction drives every other point you need to consider. If an employee travels to the States for up to 3 months, that is a short-term stay. Assignments of, say, 6 to 12 months we call medium-term here. Periods of 1 to 5 years are long-term stays.

2Employment law aspects

If a company sends an employee to the States for up to 3 months, the existing employment contract usually stays in place. For longer periods it is common to amend the contract, for example with a supplementary agreement for the assignment. Depending on where in the States the employee works, regional laws that vary from state to state may also apply.

3Visas for posted employees

Choosing the right visa for the employee's stay in the USA depends, once again, on the duration. The employee's nationality may also play a role.

For short-term assignments, the options are either a B-1 visa for temporary business purposes or visa-free entry through ESTA and the Visa Waiver Program. The latter covers stays of up to 90 days, while the B-1 visa usually allows up to 6 months. Both let the employee carry out work in the States (negotiating contracts, meeting business partners, installation work such as operating, setting up or repairing machinery). Keep in mind that the employee's pay must always come from the company back home in Europe, for example, and not from a US subsidiary.

For longer stays there are several visa categories too. Executives, managers or specialists can use the E-1 or E-2 visa if the company has the right trade ties with the USA. If an employee is to transfer within the group to a parent company, subsidiary or branch in the USA, an L-1 visa is the right fit. The condition: in the three years before entry, the employee must have worked for the company abroad for at least one continuous year as an executive, manager or specialist with specialized knowledge.

Find more on the individual US visas here. US visa options for freelancers and the self-employed are here.

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4Tax aspects

What usually determines unlimited tax liability on the worldwide income of individuals is their country of residence. When posted to the USA, though, an employee may also become subject to limited tax in the States through the work done there. Your home country's tax treaty with the USA decides how this is resolved.

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6What this means for your company

Depending on how long the employee will be abroad, several points should be settled in advance. Short trips involve fewer rules, but long-term assignments bring significant consequences for the visa, social security, tax and employment law .

Especially for longer periods of 1 to 5 years, it is worth considering a transfer of the employee to the parent company or subsidiary in the USA. That could benefit the employee's income tax, but it has far-reaching consequences for social security. So plan such a step carefully and weigh the pros and cons first.

Find out more about living and working in the USA here. For an overview of every building block of your US market entry, from hiring locally to forming your company, see our market entry page.

Mount Bonnell Advisors also supports you with much more: ongoing tax support for your US company, registering a branch in another US state, payroll, building a professional website or choosing the right health insurance.

If your employee will not physically move to the USA but will work for the US company from home, see our article on the employment contract without a presence in the USA for the contractual side.