Fraudulent contracting of work : Sham companies (Austria, Estonia and Italy)

Among the fraudulent contracting of work practices, one of the most difficult to identify is the creation of sham companies (usually, in another country) to disguise the real employer.

Creating a company is legal, however, when the only purpose of its creation is to benefit from more favourable regulations relating to labour and tax - and not to develop an activity in the country - then questions should be asked about the ‘genuine’ nature of the company.

The Eurofound study Exploring the fraudulent contracting of work in the European Union, perpetrated, essentuially, to avoid paying, or to save, employment-related taxes and social security contributions, and to evade employers’ liability towards employees.