EU Residency Status Post Brexit
Post Brexit the world keeps turning.
Much is made within the EU for freedoms of movements - yet they exist around world.
The Schengen zone is set to expand as an internal visa free zone - only to complicate it more.
So how is it for UK and Global expats & their residency status in the EU post Brexit?
Global Expats
Expats around the world can continue to live and work abroad under international rules. This provides a guiding set of principles for sovereign states to allow cross-border movement for citizens and tax residents from another country.
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In general a passport is needed to cross the border into any country around the world. Also visitors can then spend 90 days on a short-term visit or business trip into any country around the world.
Even so a traveller may still require a visa to enter into a country when travelling overseas and a cross-border.
Short stays can range from 1 to 5 days en route while travelling or for any longer period up 90 days.
Generally an expat could be resident and spend up to 180 days in any country (with or without a visa) without becoming a tax resident in any year.
When going beyond a 90 day short trip it is more likely you need a residence visa, again depending on the country to country agreements in place.
In the EU Schengen zone there is definitely a visa need to stay more than 90 days.
UK Visa Requirements
UK citizens enjoy visa free travel arrangements with 188 countries around the world. This includes most of the EU countries as as well as those in the Schengen zone of Europe.
Visa free travel is agreed on a bilateral treaty basis between two sovereign countries. If these country to country agreements are in place then you don't need a wider range Schengen visa to do the things that you want to do. What the Schengen can you do is travel freely for up to 180 days within the zone.
UK expats have great freedom to choose Living and Working Abroad without a residency Visa for short-term business or residency purposes.
Only when a stay in a country extends beyond the half-year mark is the tax independence lost. Stay 183 days or more and tax residency is assumed.
Remote workers and nomad workers from the UK can Living and Working Abroad for short term residency without the need for a visa or residency permit subject to that country.
Indonesia for example will allow UK expats to travel to and on arrival at the border be issued with a residency Visa - but only up to 180 days.
In October 2022 Indonesian rules will not allow expat residence to extend beyond 180 days for non-Indonesian citizens and explicitly won’t allow any local business or tax residency, although they do have proposals to allow up to a five year residency Visa for Expats subject only to them having the tax residency in another jurisdiction.
Whats your ETA?
The USA, EU (Read about the EU’s ETIAS scheme) and countries like Canada and Australia offer electronic travel authorisations (ETA). This means even if ‘visa free’ travel is allowed between the travellers destinations, they must still get pre-travel authorisation online to board. This was first introduced in the USA post 9/11 & is known as ESTA (Electronic System for Travel Authorization).
Australia allow US travellers to use an ETA to replace a visa for travel. This addresses the elephant in the room that the ETA is in effect a travel visa.
However unlike a VISA, ETA’s are for travel and not for stays, they will work up for short trip 90 day travel with a return ticket.
Overseas Property Home Visits
Owners of overseas property can use these rules to stay for 90 to 180 days in their holiday home or second home without long-term impact in the current tax year of their tax residency.
Remote workers & digital nomads?
If working remotely or as a nomad you can utilise these short-term residency 90 day stay rules to be based in any country without specific tax residency. In turn this allows remote workers and nomads to be taxed in the country where the economic activity is taking place all or their personal service company PSC is located. Using this route offers remote workers and digital nomads tax savings while Living and Working Abroad.
Luck of the Irish
Post Brexit agreement for Ireland allows full freedom of travel and movement for UK & Irish citizens without any EU restriction, that’s because Ireland & the UK are members of the Common Travel Area (CTA) allowing each others citizens to move & live freely in each others states.
As an EU member, citizens of Ireland can also freely live & work anywhere in the EU, but not in Schengen countries which are not in the EU where a visa will be required. Furthermore, non-EU visitors coming to Europe on a Schengen Visa cannot freely travel to Ireland without an Irish visa.
Tax residency still applies if you go expat and stay in the other place, but no travel, residency or work visas are required. To be sure.
Gibraltar Rocks
Gibraltar is unique in that it was the only British Overseas Territory (BOT) that became a member of the EU when the UK originally joined. The UK along with Spain, Portugal and the Netherlands have related sovereignty issues with islands outside Europe which have unique individual solutions as far as the residency and Schengen zone visas are concerned.
Gibraltar as a British overseas territory BOT was also a member of the EU. This is in connection with the land bridge to Spain and 300-year-old treaty that ceded control of Gibraltar to the British, and Spain’s wish for the land to be returned.
Gibraltar voted in the Brexit referendum to stay in the EU.
As part of the UK as a BOT the Rock left the EU at the time of Brexit December 2021. A provisional agreement was reached between Spain and Gibraltar so that, although Gibraltar is not in the EU and not officially part of the Schengen zone, a Spanish issue Schengen Zone Visa allows freedom of movement across the border to and from Gibraltar.
For this reason the UK visitor or expat when travelling to Gibraltar still need to present a passport at the border and have it stamped in order to comply with Schengen zone residency rules.
Schengen Zone
The Schengen zone is a visa-free travel area in Europe. With a Schengen zone visa you can travel through the zone without passports or residency ID cards.
That means that non-EU travelling for business or leisure only needs one visa to freely travel the 26 Schengen zone countries.
Since July 2021, British expats resident in the EU need to obtain an EU residency issued permit/ visa and ID card.
Map of Schengen Countries
Schengen Visas run from 1 day to 180 days generally although there is a ‘professional’ visa as well for artists, students, family or work related longer term stays.
The EU has 27 member states of which 22 are currently Schengen zone members.
As of October 2022 Ireland is not a Schengen zone member and has not applied to join.
Croatia, Bulgaria and Romania have applied to join and this may be approved by the EU this month for membership from January 2023.
Cyprus has applied to join but has a border issue with Turkey delaying matters.
In addition, the 4 EFTA (European Free Trade Area) countries (Iceland, Norway, Liechtenstein & Switzerland) are members of the Schengen Visa Zone making a total of 26 countries within the Schengen Zone as of October 2022.
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Schengen Constriction
On a Schengen zone visa, travellers can move freely within the 26 Schengen zone countries without the need to present their passport, ID card or obtain a separate visa.
A key restriction enforced when travelling into the EU using a Schengen Visa is that it limits any traveller or expat remote worker or digital nomad to spend no more than 90 days in any 180 day period in one member state of the Schengen zone.
Even so an expat traveller can spend up to 180 days a tax year in any EU country without a formal residency process having to be adopted.
This may work for overseas property owners looking for a season in the sun, or for remote workers looking to take in a different work perspective for a period of their working year - either through short-term contracts or the option to be based overseas.
If you work remotely online you could work around the corner or around the world.
ProACT offer expat advice to families and businesses living and working abroad, comment below with any questions or book a free review with an expat expert.
