Brexit: EU-UK Trade and Cooperation Agreement (TCA) | Impact in the EU

January 13, 2021

After nearly 11 months of negotiations, the EU-UK Trade and Cooperation Agreement (TCA) was approved on 24 December 2020 and is currently being applied provisionally until full ratification.

From an immigration perspective:

• The TCA confirms nationals on both sides are visa-free for short-term visits in each other’s territory
• Building upon the movement of natural persons under the General Agreement on Trade in Services (GATS), the EU-UK TCA includes some provisions on the labour mobility of natural persons very similar to those contained in the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU.

Both CETA and TCA aim to facilitate the movement of four categories of natural persons: intra-corporate transfers (ICTs); contractual service providers’ employees; contractual service providers (professionals); and business visitors by exempting them from quotas and labour market tests. However, work authorisation is still required, unless a short-term work permit exemption (regulated in the agreement or at national level) applies to any of the aforementioned four categories.

Intra-Corporate Transferees

The EU has already regulated the conditions of entry and stay for third-country nationals requiring to work in the EU as intra-company transferees through Directive 2014/66/EU. As a result, the so-called EU ICT Permit has been implemented across the EU. The TCA further states that ICTs should not be subject to quotas however, the scope of the intra-corporate transfers covered by the current EU ICT permit Directive is broader than that implied by the EU-UK trade commitment. Therefore, intra-corporate transfers from the UK to the EU will fall under EU ICT Permit schemes currently available in EU countries for third-country nationals requiring to work longer than three months and for a maximum of three years in EU Member States. Managers, specialists and trainees are covered subject by different requirements with regards to years of employment in the company, qualifications and experience.

Contractual Service Providers

When it comes to contractual service providers’ permits for employees of non-EU companies providing services in the EU, most  EU Member States already have in place specific immigration routes to facilitate entry and stay under those categories, although restrictions apply, such as labour market testing, high qualification requirements and very limited duration of stay.

The TCA states that contractual service providers should be exempt from quotas and labour market testing, which may be beneficial to UK nationals compared to other third-country nationals. However, the EU-UK Trade and Cooperation Agreement may be stricter than current EU schemes: it includes a list of industries in which contractual service providers will be able to provide their services, and it applies restrictions which do not currently apply to contractual service provider permits for third-country nationals in many EU countries such as:

• The requirement to have been providing services for a year before applying for the permit.
• The company providing services must not have an establishment in the EU member state where the service is to be provided.
• The limitation to provide services for 12 consecutive months or for the duration of the contract, whichever is less.
• Three years of professional experience in the sector related to the service contract. Proof of education and qualifications related to that field will be required.

Independent Professionals providing services must have at least six years of professional experience relating to the field of work, meet educational requirements and have the necessary professional qualifications to exercise the planned activity. Duration of stay and contract is for a maximum of 12 months and they should not have an establishment in the host country. Furthermore, the list of industries in which services may be provided by independent professionals is much more limited than for employees of Contractual Service Providers.

Short-Term Business Visitors will be allowed to stay for a period of up to 90 days in any six-month period. The TCA is further defining a list of activities which should not require a work permit, labour market test or other prior approval, provided that the business visitor DOES NOT:

• sell goods or supply services to the general public;
• receive remuneration from within the country where they are staying temporarily; and
• supply services in the framework of a contract concluded between a company not established in the host country and a consumer there.

Newland Chase welcomes the news that the EU will be implementing a list of common permitted activities on business status without the need for a work permit, as it provides more certainty on what is possible to do on business in the EU. Note, however, that some EU Member States have opted out of one or more allowed activities or have expressed reservations regarding its application. As there is little or no guidance yet on how the different EU Member States will interpret the list of activities provided in the TCA, below is the list of activities as they appear in the TCA (including countries that have expressed disagreement or conditions to them):

a) Meetings and consultations – natural persons attending meetings or conferences, or engaged in consultations with business associates;

Country-specific limitations to these permissible activities are:

• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

b) Research and design – technical, scientific and statistical researchers conducting independent research or research for a legal person of the party* of which the short-term business visitor is a natural person;

Country-specific limitations to these permissible activities are:

• Austria: Work permit, including economic needs test, required, except for research activities of scientific and statistical researchers.
• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

c) Marketing research – market researchers and analysts conducting research or analysis for a legal person of the party of which the short-term business visitor is a natural person;

Country-specific limitations to these permissible activities are:

• Austria: Work permit required, including economic needs test. Economic needs test is waived for research and analysis activities for up to seven days in a month or 30 days in a calendar year. University degree required.
• Croatia & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Cyprus: Work permit required, including economic needs test.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

d) Training seminars – personnel of an enterprise who enter the territory being visited by the short-term business visitor to receive training in techniques and work practices which are utilised by companies or organisations in the territory being visited by the short-term business visitor, provided that the training received is confined to observation, familiarisation and classroom instruction only;

Country-specific limitations to these permissible activities are:

• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

e) Trade fairs and exhibitions – personnel attending a trade fair for the purpose of promoting their company or its products or services;

Country-specific limitations to these permissible activities are:

• Austria & Cyprus: Work permit, including economic needs test, required for activities beyond seven days in a month or 30 days in a calendar year.
• Croatia & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

f) Sales – representatives of a supplier of services or goods taking orders or negotiating the sale of services or goods or entering into agreements to sell services or goods for that supplier, but not delivering goods or supplying services themselves. Short-term business visitors shall not engage in making direct sales to the general public;

Country-specific limitations to these permissible activities are:

• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

g) Purchasing – buyers purchasing goods or services for an enterprise, or management and supervisory personnel, engaging in a commercial transaction carried out in the territory of the party of which the short-term business visitor is a natural person;

Country-specific limitations to these permissible activities are:

• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

h) After-sales or after-lease service – installers, repair and maintenance personnel and supervisors, possessing specialised knowledge essential to a seller’s contractual obligation, supplying services or training workers to supply services pursuant to a warranty or other service contract incidental to the sale or lease of commercial or industrial equipment or machinery, including computer software, purchased or leased from a legal person of the party of which the short-term business visitor is a natural person throughout the duration of the warranty or service contract;

Country-specific limitations to these permissible activities are:

• Austria: Work permit required, including economic needs test. Economic needs test is waived for natural persons training workers to supply services and possessing specialised knowledge.
• Croatia & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Cyprus & Czech Republic: Work permit is required beyond seven days in a month or 30 days in calendar year.
• Finland: Depending on the activity, a residence permit may be required.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.
• Spain: Installers, repair and maintainers should be employed as such by the legal person supplying the good or service or by an enterprise which is a member of the same group as the originating legal person for at least three months immediately preceding the date of submission of an application for entry and they should possess at least 3 years of relevant professional experience, where applicable, obtained after the age of majority
• Sweden: Work permit required, except for (i) natural persons who participate in training, testing, preparation or completion of deliveries, or similar activities within the framework of a business transaction, or (ii) fitters or technical instructors in connection with urgent installation or repair of machinery for up to two months, in the context of an emergency. No economic needs test required.

i) Commercial transactions – management and supervisory personnel and financial services personnel (including insurers, bankers and investment brokers) engaging in a commercial transaction for a legal person of the party of which the short-term business visitor is a natural person;

Country-specific limitations to these permissible activities are:

• Austria & Cyprus: Work permit, including economic needs test, required for activities beyond seven days in a month or 30 days in a calendar year.
• Croatia & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Finland: The natural person needs to be supplying services as an employee of a legal person of the other Party
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

j) Tourism personnel – tour and travel agents, tour guides or tour operators attending or participating in conventions or accompanying a tour that has begun in the territory of the party of which the short-term business visitor is a natural person;

Country-specific limitations to these permissible activities are:

• Croatia & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Cyprus, Spain and Poland: Unbound
• Finland: The natural person needs to be supplying services as an employee of a legal person of the other Party.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.
• Sweden: Work permit required, except for drivers and staff of tourist buses. No economic needs test required.

k) Translation and interpretation – translators or interpreters supplying services as employees of a legal person of the Party of which the Short-term business visitor is a natural person.

Country-specific limitations to these permissible activities are:

• Croatia, Cyprus & Denmark: Work permit, including economic needs test, required in case the short-term business visitor supplies a service.
• Malta: Work permit required. No economic needs tests performed.
• Slovenia: A single residency and work permit is required for the supply of services exceeding 14 days at a time and for certain activities (research and design; training seminars; purchasing; commercial transactions; translation and interpretation). An economic needs test is not required.
• Slovakia: In case of supplying a service in the territory of Slovakia, a work permit, including economic needs test, is required beyond seven days in a month or 30 days in calendar year.

It should be noted that, in principle, EU Member States can still apply more  beneficial national work permit exemptions to UK nationals, which currently apply to third-country nationals.

Business Visitors for Establishment Purposes

Business Visitors for Establishment Purposes do not require work authorisation for 90 days in any six-month period.

As per the TCA, business visitors for establishment purposes are considered those working in a senior position in a company in the UK, who would be setting up an entity in the EU, will not provide other services or engage in economic activity and will not receive remuneration in the EU.

They should not be subject to quotas or labour market tests.

There are some country-specific non-conforming measures in the TCA as follows:

• Austria & Czech Republic: Business visitor for establishment purposes needs to work for an enterprise other than a non-profit organisation, otherwise: Unbound.
• Cyprus: Permissible length of stay: up to 90 days in any twelve-month period. Business visitor for establishment purposes needs to work for an enterprise other than a non-profit organisation, otherwise: Unbound.
• Slovakia: Business visitor for establishment purposes needs to work for an enterprise other than a non-profit organisation, otherwise: Unbound. Work permit required, including economic needs test.
• United Kingdom: Business visitor for establishment purposes needs to work for an enterprise other than a non-profit organisation, otherwise: Unbound.

Conclusion

The EU-UK Trade and Cooperation Agreement doesn’t eradicate the need to obtain prior work permits for UK nationals, who as a result of Brexit, are now third-country nationals. However, at least we have an EU list of defined activities that UK nationals can perform while on short-term business in the EU.

As adherence to and interpretation of the activities may change at national level and may undermine the practical applicability of the TCA, Newland Chase recommends assessing each activity in the specific EU Member State where the business activity is to be carried out. But there is no doubt, that having the TCA with a list of business permitted activities will be of great benefit particularly if/when UK nationals are assigned to EU Member States that do not regulate short-term stay or business activities in their national immigration systems. In these cases, we would be able to intervene and advocate on their behalf whenever we consider their situation is covered by the EU-UK Trade and Cooperation Agreement.

With the complex, fast-changing nature of Brexit, and the potential impact on employers, Newland Chase has formed a dedicated Brexit Team to address employers’ concerns and support them throughout this turbulent time.

Contact us to schedule a consultation to learn how having Newland Chase as your trusted business advisor can help your business succeed post-Brexit.

* Party = United Kingdom on the one hand, and EU Member States on the other hand