What does the Brexit vote mean for global assignments?

28 June 2016

On Friday 24th July, the UK woke up to the realization that it was going to leave the EU. Amid the resignations and general turmoil that followed, we ask what this will mean for companies and people involved in global mobility. 

A curb on free movement to stem immigration?

Immigration was a hot topic within the leave camp, but the measures that a newly-independent United Kingdom would adopt in order to solve this ‘problem’ are far from clear – because we do not yet know what kind of relationship would replace EU membership.

It is possible that the UK’s membership of the EU would be replaced by an association agreement of some kind that includes free movement. Norway and Switzerland have both implemented free movement as part of their economic cooperation agreements with the EU. If this happened in the UK, the impact of the vote on assignees moving to the UK could be relatively limited.

On the other hand, political pressures in the UK suggest strongly that free movement will become a thing of the past – an arrangement that is considered emblematic of the control exerted by Brussels on UK life, and one of the main motivations of ‘leave’ voters. 

What immigration requirements might be introduced?

Brexit and expats detail | FIDI blog

The majority of immigrants into the UK currently originate from non-EU countries. Without EU law to follow, UK policy is to impose certain rules restricting that immigration, principally in the form of salary thresholds.

As of autumn 2016, for example, the minimum salary threshold for Tier 2 (General) applications will be £25,000 for “experienced workers”, while “ICT-short term” applicants need to be earning at least £30,000. These figures are due to increase in April 2017 to £30,000 and £41,000 respectively.

Additional restrictions may be imposed on short-term assignees and companies with global mobility programs who are sending employees to work in the UK would be well advised to watch developments carefully.

UK expats overseas

Companies also need to consider the movement of UK nationals to other EU countries. Again, until the dust has settled, it is impossible to know what restrictions, if any, will apply to British expats on assignments to other EU countries. 

Extreme sanctions for the movement of UK nationals are unlikely. There is little incentive for an EU country to make life difficult for incoming British workers, given the large amount of their own countrymen still likely to be working in the UK. EU member states also know that any action against expats would shake confidence and deter investors.

How will relocation to the UK be affected?

Brexit and relocation to the UK | FIDI blog

While many observers expect the number of relocations to the UK to decrease, companies clearly have to consider the impact of Brexit on those that still happen. There are a few key points to bear in mind:

  • Allow extra time 
    Not only is it going to take a while to clarify the rules and regulations surrounding work permits, the process itself can only become more complex.
  • Revise budgets 
    The cost of relocating to the UK may well change, so consider the implications of Brexit on items such as COLA, home/host compensation, shipping, visa/immigration etc.
  • Coordinate planning
    Ensure relocation planning is conducted in tandem with other departments, such as finance, legal, HR etc, since all will be aware of the potential impact of the UK’s new status.
  • Watch this space
    Keep an eye on legal and political developments in the UK. Separation from the EU will take at least two years, but a lot has to change in this time.

If you’re going to move, move quickly?

The impact of the UK’s exit from the EU will become much clearer over the next few months. However, there may be some benefit in acting quickly before any restrictions are imposed. Expats who are in place before a formal exit from the EU would be protected by the Vienna Convention of 1969, which says that the termination of a treaty "does not affect any right, obligation or legal situation of the parties created through the execution of the treaty prior to its termination.”

In other words, if you leave before the UK leaves Europe, you can continue as before.

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