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      On 7 October 2025, Finland and Uruguay signed a bilateral social security agreement in Montevideo, covering employment-based pension coverage in both countries that would establish new rules for posted workers and pension eligibility.1

      The agreement’s entry into force in Finland is subject to approval by Parliament. The matter is proceeding; however, the agreement has not been approved by Parliament yet. The earliest the agreement is expected to enter into force is in 2026.

      WHY THIS MATTERS

      Previously, Finnish employers posting workers to Uruguay faced the burden of double pension contributions, increasing assignment costs and administrative complexity.

      For mobile employees, the agreement means that periods of employment in both countries would be recognized for pension eligibility, particularly benefiting those who move between Finland and Uruguay and might otherwise not qualify for a pension due to minimum service requirements.

      For global mobility stakeholders, the agreement addresses several practical challenges linked to cross-border assignments between Finland and Uruguay. 

      Key Highlights of the Agreement

      Coverage of Posted Workers

      Employees and self-employed persons posted from Finland to Uruguay, or vice versa, will remain covered under their home country’s pension scheme and be exempt from host country pension contributions. The agreement does not cover other statutory social security coverage , so partial dual coverage remains.

      Coordinated Pension Eligibility

      Uruguay will now recognize periods of employment completed in Finland when assessing entitlement to an old-age pension, enabling more mobile workers to qualify, even if they do not meet Uruguay’s 30-year employment threshold.

      Pension Payments Across Borders

      The agreement guarantees the payment of accrued earnings-related pensions between the two countries, providing benefit portability.

      KPMG INSIGHTS

      Steps to Consider

      In light of the changes, when the agreement comes into force, organisations and individuals within the scope of the update may wish to consider the following:

      • Organizations may wish to review payroll processes to comply with the new rules once in force.

      • Employers may also wish to inform affected mobile employees about the possible changes to pension coverage, eligibility and apply for COC timely.

      If assignees and/or their programme managers have any questions or concerns about the scope of the update, its application and potential impacts, and appropriate next steps, they should consult with their qualified tax professional or a member of the GMS tax team with KPMG in Finland (see the Contacts section).

      FOOTNOTE:

      1  Finland Ministry of Social Affairs and Health, press release, “Social security agreement between Finland and Uruguay to facilitate mobility between the countries,” dated 8 October 2025.

      Contacts

      karoliina-nurmi
      Karoliina Nurmi

      Partner

      KPMG in Finland

      Heidi Viikari
      Heidi Viikari

      Director, Tax & Legal

      KPMG in Finland

      Anastasia Arkhipova
      Anastasia Arkhipova

      Tax & Legal Manager People Services

      KPMG in Finland

      More Information

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      The information contained in this newsletter was submitted by the KPMG International member firm in Finland.

      GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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