Do the Rules and Requirements for engaging in TAW´s activities in Portugal, apply to portuguese TWA´S when seconding or leasing workers to clients located outside their home country?

The short answer is YES.

If a TWA (Temporary Work Agency) incorporated and with tax residency in Portugal does not fulfil the legal and mandatory requirements to engage in temporary work agency activities in its home country, then it also cannot engage in the same activities outside Portugal regardless of whether or not the same activity is or is not the object of regulation in the third country.

Let´s imagine that an unlicensed (therefore, rogue, illegal or clandestine) TWA established in Portugal wishes to second or lease workers temporarily to a vegetable farm client in the Netherlands for a period of 6 months.  Is it possible? Well, “possible” it is.

Any Portuguese or Non-EU worker in Portugal holder of a valid residence permit can hop on an airplane and fly off to the Netherlands where they are free to enter. The real question is, is it legal or permissible for a non-EU citizen to work there?

In stark contrast to what one finds in Portugal, the Netherlands temporary work agencies (in Dutch “Uitzendbureaus”) are subject to extremely loose and soft regulation – and no surety/guarantee is required to engage in this activity. This is the case despite the Netherlands being one of the countries in the world where temporary work agencies and the use of temporary or flex workers (in Dutch, “Uitzendkracken”) is most widespread and intensive.

When it comes to the degree of rules, control, regulation and investment required to operate a temporary work agency – Portugal and the Netherlands stand on diametrically opposite poles.  While it is true that the fundamental freedom to provide services enshrined in the EU Treaty, does not, in principle, allow Netherlands to restrict the right of any non-established Portuguese company (including TWAs) to provide services within its borders under exactly the same terms and conditions that local companies are subject to, other factors must be taken into consideration.

The freedom for a non-established Portuguese incorporated TWA to provide services in the Netherlands only applies if firstly the TWA is legally entitled to provide services within the borders of its home jurisdiction. A TWA established and tax-resident Portuguese and non-established in the Netherlands may only conduct business in this country if it fulfils the requirements to do so. 

Failure to act in accordance with this rule constitutes a blatant violation of EU legislation on Fair Competition as defined in Article 101(1) of the Treaty on the Functioning of the European Union (TFEU). 

However, the Portuguese TWA and its Dutch vegetable farm client, used in this example, would not only be engaging, together, in illegal competition practices they would also be engaging in technically and unquestionably criminal activity quite serious in nature and consequences.

If you would like to know more information regarding of the consequences of Illegal Worker Leasing and how to verify the legitimacy of the A1 Certificate, you can find more information here.