Important document for business owners working remotely abroad

An A1 certificate allows you to get Finnish social security while working remotely abroad.

The Finnish Centre for Pensions says more and more business owners are working remotely abroad. A business owner going abroad should establish whether they are covered by Finnish social security while working abroad. The key document is an A1 certificate, which you ought to apply for before working remotely abroad.

The main rule in the EU is that work is insured where the work is done. The A1 certificate is an exception to this main rule.

“For example, if a business owner goes to Spain to work remotely, the main rule is that they should arrange their social security in line with Spanish legislation. If the business owner has applied for and received an A1 certificate from the Finnish Centre for Pensions, they can be covered by Finnish social security while working abroad. If they haven’t applied for an A1 certificate and they fall ill or have an accident while there, investigating the matter and establishing who pays compensation afterwards can take time,” says Laura Ristola, an insurance specialist at the Finnish Centre for Pensions.

Ristola says that this paperwork can be avoided if the business owner applies for an A1 certificate in good time. Merely informing Kela or your insurer is not enough.

“If the business owner has informed Kela about falling ill abroad, but has not received a certificate from the Finnish Centre for Pensions, Kela informs the Centre about the business owner’s work abroad and we have to investigate the business owner’s entire social security after the fact. If an A1 certificate cannot be issued, the business owner has to arrange coverage for themselves in the country where they are working remotely.

Social security covers payments such as pension, child support and sickness benefit.

Different rules in every country

A business owner can receive an A1 certificate if they meet the conditions. These include their YEL policy having been valid for at least four months and the temporary nature of the remote work abroad. If the certificate is issued, the social security during the remote working period remains on the same level as when working in Finland.

“Getting the certificate is not automatic. Each application is assessed individually,” Ristola says.

Ristola points out that each country’s legislation is different and that the level of social security differs accordingly. There may also be differences in what is considered entrepreneurial work. For example, in Estonia the definition of an entrepreneur is significantly narrower than in Finland: there, a business owner is often in a comparable position to an employee.

“A business owner should independently establish the rules in the other country if they won’t be covered by Finnish social security.”

More and more business owners have applied for the A1 certificate before going abroad. Ristola says that this is a sign of both the growing popularity of remote work and of awareness.

What if I work remotely in several countries?

If a business owner regularly works remotely in several different EU countries, such as in Sweden and Estonia, different rules apply to social security. A business owner can obtain an A1 certificate and Finnish social security if they do at least 25% of their work in Finland.

“If this condition is not met, what we look at is where the business’s central location is, where the clients mostly come from and what country turnover mostly comes from. That could make it possible to receive the certificate.”

A company’s employee also needs an A1 certificate when going abroad to work remotely. In that case, the employer must obtain the certificate for their employee. However, a certificate is not necessary for individual short business trips of just a few days.

Ristola says that if necessary, the certificate can be obtained after the fact.

“Sometimes, there may be situations where a builder cannot go onto a building site abroad without an A1 certificate.”

Further information about social security for business owners while abroad and the A1 certificate are available on the Finnish Centre for Pensions website.