Touch or Go on Brexit
ProACT Sam looks forward to independence day and clarifies the last minute things Expats should do to secure their EU Citizen Rights before Brexit ends December 31th.
What’s the worse that could happen with Brexit? After the exaggerated Brexit fears of 2019 it couldn’t get any worse in 2020… could it?
2021 will bring a new year and a fresh start.
One thing is absolutely clear, the UK has left the EU on 31st January 2020 and the transition period will end on 31st December.
Trade Block
There is a bit of trade blockage at the moment. My view is the EU is a free trade zone - inside. The EU has significant tariff and trade barriers to countries outside the EU, a place the UK will find itself in the new year.
These trade arrangements are controlled by World Trade Organisation (WTO) international laws, and are used by USA, China, Japan and the UK, from January 2021.
That is 4 of the 5 largest economies in the world.
There is life for the UK outside the EU.
If the UK can get better EU trade deal terms than WTO rules then all the better for EU and UK companies. The EU27 will present a common negotiating approach to allowing new trade arrangements. The EU could replicate existing trade deals with the likes of Canada, but could continue to hold out for local interests like the Irish border, and fishing.
EU negotiators could block progress for years before coming to a resolution, filling the void with uncertainty and confusion on a par with Covid restrictions and daily life in 2020.
In practice, a temporary roll over agreement can be agreed and trade will be disrupted in specific areas, but in general not much changes day to day.
Independence Day
The UK cannot make new trade deals until the 1st of January 2021. Only from that date can new agreements be signed on a bilateral basis between the UK and countries around the world. Not with EU countries, the EU27 trade as a block.
From January 2021 could have ‘Free Trade’ agreements with countries that currently have no free trade agreement with the EU. So Chinese imported goods could fall in price with the UK out of the EU which would balance price increases from EU countries if tariffs were added.
The EU has none tariff barriers also that could impact service businesses. Such businesses may need an EU branch and registration to operate in one and then all EU countries. UK companies can set up a UK branch in Cyprus to obtain EU residency for their business.
Independant free trade for the UK means only that it can leave the EU and move in a new direction from the EU. Trade won’t end, the world won’t stop.
EU Freedom
EU Citizens rights enshrine the right to live and work in the EU. Individual families already have their EU freedoms confirmed and established and guaranteed under international law.
If an expat is registered as legally resident in their country of residence before 31st December they retain their right to live and work in the EU for a their lifetime along with their dependant family. This includes EU expats in the UK through the Settled Status Scheme. In the EU and Cyprus formal registration leading to permanent residency confirms EU Citizen rights for a lifetime.
What does this mean for expats?
You need to be officially resident before 31st December 2020
Have accommodation in country
If resident, be tax resident.
Have the right to work and set up a business
Have access to state health care
Have the right to ongoing medical cover through the S1 scheme
Receive S1 healthcare benefits in the future even if state retirement occurs after Independence Day on 1st January.
Right to Visa free travel into that country
The Day After
UK expats relocating to the EU and Cyprus from 2021 will be subject to new rules.
Residency and Tax and Healthcare are coordinated by but not entirely within the remit and legal control of the EU - these remain with sovereign governments.
So the day after independence day, 1st of January 2021, the UK can start making new bilateral residency, visa travel and healthcare arrangements with individual governments. Even those members of the EU27.
Countries with strong traditional and cultural and expat ties with the UK such as Cyprus, Malta & Ireland, along with Spain and Portugal can make new beneficial bilateral agreements.
These cannot be discussed openly, or agreed, before the end of the transition period. or before the new EU trade deal is agreed.
The trade block, haggling over big business and taxes in a negotiation dragging on to the last minute, is a key source of the uncertainty for expats when the end is nigh.
My view is that new bilateral agreements will quickly be put in place to support expat communities in Cyprus, the UK and around the EU as politicians look to protect their nationals.
Already we see this being suggested with Ireland and suggestions of continuing agreements between Cyprus and the UK.
Decision time
If you are an expat and have a residence in Cyprus, the UK or the EU then ensure you are registered and legally resident in that country before the end of December 2020.
Contact us for ProACT Know How to help and assist family and business living and working abroad.