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India, Portugal to operationalise Social Security Act soon

Ashok Tuteja | New Delhi |

India and Portugal have decided to bring the Social Security Agreement (SSA) between them into force in a move that protect the interests of Indian professionals and skilled workers employed in the European nation.   

The SSA was signed by the two countries on 4 March 2013,  in New Delhi. On 7 February, Portugal, on completion of the relevant constitutional and legal formalities, conveyed to the Indian side that it was ready to bring the SSA into force.

As per Article 22 of the SSA, the SSA would come into force 90 days following the date of receipt of notification of completion of internal formalities by the respective parties. Accordingly, the SSA between the two countries would come into force on8 May, an MEA press release said.  The SSA with Portugal will provide the following benefits to Indian nationals working in Portugal:

  • For short term contract, up to 5 years, no social security contribution would need to be paid under the Portuguese law by the detached workers provided they continue to make social security payments in India. The benefits shall be available even when the Indian company sends its employees to Republic of Portugal from a third country;
  • Indian workers shall be entitled to the export of the social security benefit if they relocate to India after the completion of their service in Portugal. Self-employed Indians in Portugal would also be entitled to export of social security benefit on their relocation to India; and
  • The period of contribution in one contracting state will be added to the period of contribution in the second contracting state for determining the eligibility for social security benefits.

As on date, India has signed and operationalised "comprehensive” SSAs with 17 countries ~ Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Hungary, Japan, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland and South Korea. India also has an SSA with Germany, which is in the process of getting operationalised.

The SSA between India and Portugal when operational will favourably impact the profitability and competitive position of Indian and Portuguese companies with foreign operations in either country by reducing their cost of doing business abroad.  The SSA will also help promote more investment flows between the two countries.