International research is a bridge between frontiers, not just of science, but of law, employment, and compliance. If you’re steering a German innovation-led company, perhaps with a bold R&D roadmap, you’ve found yourself asking—how do we legally and practically engage brilliant minds working across borders? The answer might surprise you: dual contract structures. Understanding, applying, and running them are less like pressing a button, and more like shaping clay until both parties see something useful, compliant, and sustainable.
Imagine a talented scientist. She works in Berlin, but her research also takes her to Massachusetts. Under local rules, she’ll almost certainly need contract documentation in each place—one compliant with German labor law, another meeting US requirements. This is the core concept of a dual contract arrangement: two clear, coordinated contracts, each rooted in its own legal home, yet both describe the same individual’s working reality.
These arrangements aren’t about double-dipping compensation, but are instead often a method for tax compliance, social security protection, smoothing out regulatory bumps, and avoiding problematic misclassification across international lines. After all, employment rules rarely “translate” one-to-one across nations.
Sometimes, what’s straightforward in Berlin is a maze in Boston.
Germany’s reputation for cutting-edge research is only growing. Local tech scaleups and established firms are building teams that straddle borders, especially as funding rounds push for global reach. As research grows more collaborative, German companies want compliance—but without unnecessary friction or risk.
Even renowned German institutions acknowledge: cross-border research faces challenges due to differing national regulations and institutional policies. In practice, contracts that work in one place can quickly unravel in another, impacting tax, insurance, or even day-to-day work authorization.
So, for German innovation leaders—from HR directors to IT vendors and C-levels—a dual employment structure often becomes the only viable way to access top talent, reward work fairly, and keep legal teams happy.
Who needs a dual contract structure?It isn’t just about scientists in white coats. Dual-contracting applies across roles:
The common scenario is clear. Someone, somewhere, is doing real work in two regulatory “worlds.” If your company stretches beyond one country, it is probable you’ll find yourself facing these puzzles sooner or later.
If you peel back the layers, what you find is almost never identical contracts. Instead, each side often focuses on one “jurisdictional” reality.
Behind these lies a need for coordination between HR, finance, and legal in each country—to avoid double taxation, misunderstood IP ownership, or accidentally invalid contracts. This is where having support like EWS can be a quiet but profound asset.
Clear on paper. Crystal clear in practice.
There’s a flipside to employer worries: for researchers themselves, the right contract structure protects their pensions, clarifies healthcare, keeps tax from getting punitive and—just as often—lets them focus on the research, not the red tape. Well-structured dual arrangements support:
Studies from Texas Tech University and Penn State University highlight how these cleaned-up structures help everyone stay compliant and, frankly, keep projects on schedule.
German employment law is protective, dense, and occasionally stubborn. When a company tries to apply only foreign contract models, it rarely ends well. Works councils, health insurance carriers, and even immigration officers often require locally compliant documentation—sometimes with not a word of English allowed.
For German firms, the best practice is nearly always to “anchor” the employment relationship in Germany, then build parallel documentation for secondary roles abroad. This is where EWS’ Employer of Record resources come into play, especially when the company hasn’t set up its own legal entity in the partner’s locale.
Let’s walk through a scenario:
It sounds manageable in theory, but in the real world, it is the details—payroll splits, expenses, cross-border benefits, local healthcare registration—that make or break the system. Companies often turn to consultancy support like EWS to keep this running smoothly.
Legal, tax, and IP considerationsIt can get technical. For one, both Germany and the US (or most other research destinations) have their own rules about what constitutes an employment relationship, what types of taxes must be withheld, how social security or retirement is handled… the list goes on.
The contracts, while distinct, must not create the impression of double-employment where the person claims two benefits packages or is doubly insured for unemployment. Instead, they should describe a coordinated relationship.
Research funding, especially where federal or state money is involved, is bound by clear audit trails. The Federal Acquisition Regulation Subpart 31.2 makes it clear that independent research and development costs must be reasonable and allocable—the dual contract model lets each jurisdiction “see” the logic behind payrolls and expense claims.
Don’t underestimate compliance hurdles. US federal regulations, like export control laws and economic sanctions, can impact dual arrangements. You don’t want to be the one who “accidentally” shared sensitive technology without proper approvals.
This is why expert guidance and up-to-date legal opinions are always in demand for these structures.
At EWS, this is something we deal with almost daily. We’ve grown by finding practical, human solutions for:
We work particularly with companies making their first international hire, or those who suddenly need a compliant contract model as they expand their R&D partnerships. Innovation companies aren’t just hiring—they’re building bridges.
If you are the person at your company responsible for this, your checklist probably looks something like:
Our clients often find it helpful to run through the compliance checklist for international hiring before anything is signed. It can be surprising how easy it is to miss a step if you haven’t done it before.
Where it goes wrongMistakes in dual employment arrangements tend to fall into some familiar traps:
For an in-depth look at contract misclassification concerns, you can read EWS’ advice on legal risks and misclassification—because even established companies make these mistakes.
Not every company can afford the time or resources to set up a full branch before starting research in a new country. EWS, for example, regularly helps with Employer of Record (EOR) solutions, which combine the benefits of local employment contracts with the efficiency of centralized HR processes. This approach fits naturally for dual contracts, especially when you’re not ready for full company formation abroad.
If you’re interested in a broader look at deploying EORs to support growth, there’s guidance available on global expansion and scalable hiring on our site.
Common myths and doubtsBegin with clarity. Continue with compliance. End with shared success.
If your organization wants to build world-class research teams that transcend borders, the paperwork must keep pace with the ambition. Dual contract structures—done well—can unite legal certainty and real-world practicality. They bring together payroll, HR, compliance, and innovation so that every party (employer and researcher alike) knows what’s expected, what’s protected, and what good work looks like on both sides of an ocean.
At EWS, our mission is to connect the dots for growing companies and their global workforce. If you want guidance, or simply need a partner who’s been down these international paths before, our team is ready to help you build the compliant, effective framework your researchers (and your business) deserve.
Let your research cross frontiers—let EWS handle the paperwork.
To learn more, get in touch with us today and find out how EWS can support your international research ambitions.
A dual contract structure involves two distinct employment agreements for one individual, covering their work in different countries. Each contract aligns with the local labor, tax, and social insurance laws of its jurisdiction. This helps manage regulatory, payroll, and benefits complexities for researchers or employees whose role spans borders.
A dual contract allows international researchers to access appropriate benefits, such as healthcare and social insurance, in each country where they work. It reduces the risk of double taxation, clarifies rights and responsibilities, and helps ensure their compliance with local regulations. Most importantly, it lets them focus more on their actual research, rather than wrestling with red tape.
Yes, dual contracting is legal when structured correctly according to each country’s laws. However, both contracts must coordinate terms and avoid providing the same benefits twice. Legal review in both countries is strongly advised to prevent accidental non-compliance, as regulations can be strict— especially concerning payroll, tax, and social security.
Risks include potential double taxation, accidentally providing or denying benefits, labor law conflicts, or misclassifying workers. Mistakes can lead to fines or legal disputes. Companies should be careful about coordinating work hours, duties, and reporting lines across both contracts, and ensure all IP, confidentiality, and immigration requirements are correctly addressed.
Begin by identifying local employment and tax rules in both countries. Draft contracts with clear terms tailored to each jurisdiction, but designed to complement rather than conflict. Align payroll, HR, and legal support for both sides. Consider using a consultancy such as EWS to bridge gaps in compliance, documentation, and benefit structure. Regularly review contracts to stay up-to-date with changing regulations in each location.
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