On May 11, 2017, the Social Security Agreement (the "Agreement") was entered into by the Federative Republic of Brazil and the Republic of Mozambique.
The main purpose of the Agreement is to protect the benefits of workers who divide their working careers between the two signatory countries, as well as to avoid situations in which workers or employers are required to pay Social Security contributions to both of the countries on the same earnings.
Pursuant to the Agreement, the worker will be exclusively subject to the Social Security legislation of the country in which he carries out his labor activities, particularly related to the following benefits: (i) disability retirement; (ii) old-age retirement; (iii) death pension; and (iv) sickness aid, provided that the conditions set out in the Agreement are met.
As an exception, a worker who is temporarily assigned from his country of origin will remain subject to the Social Security legislation of this same country (and not to the relevant legislation of the host country) for a period up to 24 months, extendable for the same period if authorized by the competent authority of the country of destination.
The Agreement must still be submitted to the Brazilian National Congress to be ratified and then published in the Official Gazette. However, the Agreement provides that any period of contribution completed before its entry into force will be considered in determining entitlement to the benefits recognized under the Agreement.
Observations in this update are not intended to provide legal advice to any entity. Any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.