Brexit Agreement: What You Need to Know About Passporting
Passporting has been a topic of discussion since the United Kingdom voted to leave the European Union in 2016. It was a crucial aspect of the deal-making process for Brexit, and the final agreement included provisions for passporting rights. But what does this mean for businesses and individuals? Here`s what you need to know about Brexit agreement passporting.
What is passporting?
Passporting is a mechanism that allows licensed financial institutions in one EU member state to operate in another without having to establish a subsidiary in that country. It has been a fundamental feature of the EU single market and critical to the financial services industry.
The Brexit agreement allows passporting rights to continue until the end of the transition period on December 31, 2020. The EU and the UK will have to negotiate a new agreement for passporting to continue beyond that date.
What`s changing for financial services companies?
After the transition period, UK-based financial services companies will face a significant challenge. They will no longer be able to use their existing passporting rights to operate in the EU. To continue to operate in the EU, they will have to establish an office in an EU member state or seek regulatory approvals or other arrangements.
Similarly, EU-based financial services companies will lose their passporting rights to operate in the UK. They will have to establish an office in the UK or seek regulatory approvals or other arrangements.
What about individuals?
The Brexit agreement includes provisions for the rights of EU citizens living in the UK and UK citizens living in the EU. These provisions protect the status of EU citizens who arrive in the UK before December 31, 2020. They will be able to apply for settled status after living in the UK for five years.
UK citizens living in the EU will also be able to apply for settled status after living in an EU member state for five years. They will need to register with the relevant national authorities to obtain residency status.
In summary, the Brexit agreement includes provisions for passporting until the end of the transition period. Financial services companies will have to establish offices or seek regulatory approvals to continue operating in the EU or UK. The agreement also includes provisions for the rights of individuals living in the UK or EU.