Skip to main content
Insight

The UK-EU Trade and Cooperation Agreement – People and Mobility

On 24 December 2020, the UK and EU finally reached an agreement in the form of the Trade and Cooperation Agreement (TCA), which provides a framework and principles for their new trading relationship. This has significant implications for cross-border trade with the UK.

This note sets out the implications for employers wanting to send EU nationals to the UK or vice versa for business purposes.

The TCA sets out underlying principles including the need to ensure an open and secure market for business, and the importance of cross-border connectivity for passengers and goods.

Withdrawal Agreement

Prior to looking at the TCA, it is important to note that EU nationals who were in the UK prior to 31 December 2020 may be eligible to apply to the EU Settlement Scheme, further to the Withdrawal Agreement.  If they are eligible and make an application by 30 June 2021, and are then granted status, they do not need to meet the requirements of the TCA.  Many if not all EU member states have implemented similar schemes although the terms may differ. For example Germany requires the person to have been resident in Germany prior to 31 December 2020, rather than simply physically present, as is the UK's requirement.

TCA categories

We will focus principally on the impact of EU nationals travelling to the UK for business purposes and the way in which the provisions in the TCA have been implemented into or already exist in the UK immigration rules.  Each EU member state will implement the TCA in their domestic legislation and it will be necessary to seek advice on the immigration system specific to that member state in relation to UK nationals travelling to the EU.

There are five categories of temporary stay for business purposes addressed in the TCA, which are:
 
  1. Short-term Business Visitors
  2. Business Visitor for Establishment Purposes
  3. Contractual Service Supplier
  4. Independent Professionals
  5. Intra-company Transferees
We will look at each category in further detail below.

Short-term Business Visitors

The TCA says that the permitted period of stay for short-term business visitors will be up to 90 days in any 180-day period.  The UK has specific guidance relating to the duration of business visits, which we look at below.

The TCA says that neither the UK nor EU require visas for short-term visits but that they can introduce a visa requirement by giving 3 months' notice.  

The TCA sets out which activities business visitors are permitted to carry out, and these include:
 
  • attending meetings or conferences;
  • research and design: technical, scientific and statistical researchers conducting independent research or research for their employer;
  • marketing research;
  • attending training in techniques and work practices restricted to observation, familiarisation and classroom instruction;
  • representatives of a supplier of services or goods taking orders or negotiating or entering into agreements, but not delivering goods or supplying services themselves;
  • after-sales or after-lease service: the employee of a company which has sold or leased commercial or industrial equipment or machinery, including computer software can install, repair or maintain equipment pursuant to a warranty or service contract incidental to the sale or lease, as long as they have specialised knowledge essential to the seller's contractual obligation.
However, UK nationals travelling to the EU should obtain advice local to the country they are visiting.  In particular, individual EU member states have carved out greater restrictions. For example, Austria requires a visiting person conducting research and design to obtain a work permit, except for research activities of scientific and statistical researchers.

The TCA says that business visitors must not sell or supply services directly to the public and that they must not receive payment in the host country.

The TCA states that, other than the scenarios provided for in the permitted activities, short-term business visitors are prohibited from servicing a contract to a consumer where the company does not have an entity in the host country. Where a contractor is being parachuted into the host country, in many cases EU nationals coming to the UK to service a contract may need to obtain a visa. 

Following the TCA, the UK Government has implemented changes to the UK immigration rules effective 31st December 2020 to allow for business visitors to conduct market research or independent research for their employer overseas; and for translators and interpreters to translate as an employee of their overseas employer.
The provisions for short-term business visitors seem to fit largely with the UK rules already in place, however UK guidance takes a restrictive view on the duration of business visits.  For example, UK guidance states that in relation to visitors installing or repairing equipment: "You should expect visitors to stay for less than one month….". 

While EU nationals will be able to use the e-gates on arrival, which means they would often by-pass questioning, they can still be questioned by a UK immigration officer on arrival in the UK, or at the company premises. In many cases, those wanting to stay longer than around 2-4 weeks may need to justify the duration of their stay and an immigration officer may take the view that the person requires a work visa for longer visits.  If they are found to be breaching the visitor rules, their employer in the UK may be issued with a civil penalty of up to £20,000 for illegal working and may be prosecuted for a criminal offence. EU member state penalties will vary from country to country. The question is whether in light of the current guidance, the UK is breaching the spirit or letter of the TCA and that in reality business visits to the UK will not be viable even where they are covered by the TCA.

Business Visitor for Establishment Purposes

The TCA says that business visitors who are employed outside the host country in a senior role and are responsible for setting up a legal entity for their employer can travel as visitors.  They must not receive payment in the host country or provide services other than establishing the legal entity.

Contractual Service Supplier

The TCA says that an employee of a company based outside the host country which has a contract to supply services to a consumer in the host country, can work in the host country for up to 12 months.  They must have worked for that company for at least 12 months and have sufficient experience and qualifications (i.e. at least three years professional experience, a university degree or equivalent qualification and the professional qualifications legally required to carry out the activity in the host country). The service must fall within the scope of the TCA, which includes areas such as accounting, computer services, legal advice, engineering and manufacture advisory services.

Contractual Service Suppliers must not receive payment in the host country.

The UK government has amended the immigration rules effective 31st December 2020 such that Contractual Service Suppliers will fall under the International Agreement category.  The key requirements of this category are that the consumer of the service based in the UK would need to obtain an International Agreement Sponsor Licence and the person must then apply for an International Agreement visa.   We understand that some EU member states already have similar schemes in place although these may need to be looked at regarding whether they meet the requirements of the TCA.  For example Italy has a Service Agreement work permit for which allows companies outside the EU to send personnel to carry out specialised work to deliver a service agreement. For either EU or UK nationals travelling to work in this way, this will entail additional costs and bureaucracy for the consumer, which may need to be factored into contracts.

Independent Professionals

Independent professionals are those who are self-employed outside the host country who have a contract to supply services to their sponsor in the host country.  They must not have established themselves in the host country.  They must have a contract for a period up to 12 months to supply services to a final consumer in the host country.   

They must have at least six years professional experience in the relevant activity, a university degree of equivalent qualification and the professional qualifications legally required to exercise that activity in the host country.

As with Contractual Service suppliers, in the UK, people falling in this category would need to use the International Agreement category, which will require the final consumer to obtain an International Agreement Sponsor Licence and the person would then need to obtain an International Agreement visa.

Intra-Corporate Transferees

The TCA provides that managers, specialists and trainees can work as intra-corporate transferees in the host state for an entity connected to their employer.

For EU nationals coming to the UK on this basis, they will need to meet the existing UK immigration rules. The key requirements are:
 
  • The person is engaged by a company outside the UK, which has a connected entity in the UK;
  • The employee moving to the UK must be sufficiently skilled and either have worked for the company abroad for at least 12 months or be earning a minimum amount;
  • The UK entity must apply for a sponsor licence and the person must apply for a visa.
This carries cost implications and the UK company must meet compliance requirements which will require careful planning and oversight and which if not complied with could result in a civil penalty or criminal offence.  Many EU member states have similar regimes, which carry similar penalties for illegal working.  For example in France an employer can also be subject to a criminal offence and substantial civil penalty for employing an illegal working, which may be payable by individuals within the company as well as by the company itself.

Summary

The new rules will bring with them significant restrictions, costs and compliance issues for employers and consumers, which may impact on the flow of trade between the UK and the EU, and are likely to result in skills shortages.

For UK nationals wishing to travel to the EU to work or visit, it will be necessary to consult local immigration lawyers as to the specific requirements for each country.

Companies may have to look to increase budgets, train up staff and consider alternative measures such as apprenticeships and automation as a long-term strategy and in the meantime they will have to get to grips with the new requirements.

Sign up to our email digest

Click to subscribe or manage your email preferences.

SUBSCRIBE