Brexit: The EU and Investment Migration Programs

Brexit negotiations continue to follow a winding path; the EU and UK’s withdrawal agreement was rejected by the UK Parliament. ‘No deal’ preparations are intensifying.

No Deal and the Immigration Status of EU Nationals in the UK
The UK Government has released plans for immigration if the UK leaves the EU with no deal agreed. The policy would apply between Brexit, (originally set for 29 March 2019), and a new immigration system being introduced before 1 January 2021. Under the policy, free movement will end after Brexit, although precisely when is not clear.

It is becoming increasingly difficult for the government to take the legislative steps required in time for the anticipated end of free movement. European nationals coming to the UK after the end of free movement will be able to enter, stay, and work for three months. Those intending to stay longer will need to apply for three years of ‘European Temporary Leave to Remain’, after which they will need to apply for permission to stay in the UK under the new immigration regime. We understand they will not be able to extend this leave, nor will it lead to indefinite leave to remain. The policy paper clarifies the position of EEA (Norway, Iceland, and Liechtenstein) and Swiss nationals, who will in general be treated in the same way as EU nationals. The situation is more complex for UK nationals in Europe and UK businesses wishing to send workers there after Brexit — each jurisdiction is preparing domestic legislation.

EU Commission Reports on Investor Migration Programs
The EU Commission recently published Investor Citizenship and Residence Schemes in the EU, a report that examines selected schemes, focusing on Bulgaria, Cyprus (pre-June 2018 changes), and Malta. These countries (and Austria) offer citizenship routes for those making significant investments. The report highlights the importance of the highest standards of regulatory practices — compliance and due diligence are critical to any program’s integrity. Investment migration schemes must indeed be subject to stringent due diligence checks and not be compromised by illicit practices. The industry is committed to achieving this and welcomes the opportunity for constructive engagement this report creates.

We must also be alive to the benefits that investor programs bring for that engagement to deliver meaningful outcomes. This is not simply a question of the competency of states within the EU but impacts the nationals of member states — individuals concerned by the prolonged Brexit negotiations have similarly considered programs in mainland Europe. A balance is needed to ensure that appropriate checks are made so that legitimate individuals can continue to invest and benefit from these programs. There also needs to be greater understanding of why they use these programs.

Moving Forward from the Report
It is easy to make blanket assumptions of illegitimacy or tax evasion (in fact, tax residence is often quite separate to immigration residence) and no doubt the report will generate academic debate on the concepts of citizenship and residence. The reality is an industry committed to the highest standards of ethical practice and, for the most part, similarly minded applicants. There are nonetheless improvements to be made and we hope the report precipitates constructive engagement toward a common goal of best practice and social and economic benefit for the EU and the broader industry.

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