Following the 2016 Brexit referendum, the British Parliament has once again rejected the European exit agreements negotiated by Theresa May. With just a few days to go before the April 12 deadline, the new negotiated date, many legitimate questions arise in the absence of an agreement.
What are the consequences for British nationals living in Luxembourg? More generally, what will happen to trade between the UK and Luxembourg? What impact will the Brexit have on the pillars of the Luxembourg economy?
The Luxembourg government is already anticipating a non-agreement. Here you’ll find the initial answers we’ve received to date. The British will then find themselves in the position of third-country nationals.
Movement of goods and people between the United Kingdom and Luxembourg
People traffic
In the event of a no-deal, the British nationals will no longer benefit from European agreements. They will need a passport and may require a visa to enter Luxembourg..
However, if the UK grants reciprocity to Schengen area nationals, a visa waiver could be introduced. This measure would only apply to stays of up to 90 days in any 180-day period.
Circulation of goods
All goods moving between Luxembourg and the UK must be declared. Any customs duties and other taxes paid. This will apply to packages sent between the 2 countries, for example parcels sent to family members or friends, but also to online purchases. Your service providers will have to invoice you for the corresponding amounts.
For further information, please contact the customs administration: brexit@do.etat.lu.
Administrative questions for British residents in Luxembourg
What status for British residents?
The British community represents 6,000 people in Luxembourg. As a precaution, British nationals will have one year from March 30, 2019 to regularize their situation in Luxembourg . To ensure that they do not find themselves in an illegal situation, they must have a residence permit in due form by March 30, 2020 at the latest. Applications for residence permits must be submitted by December 31, 2019, under a simplified procedure.
On the other hand, British nationals wishing to settle in Luxembourg after March 29, 2019, will have to go through the same formalities as non-EU nationals. They will need to apply for a residence permit from the relevant authorities, prior to entering Luxembourg territory.
British nationals with dual Luxembourg or European citizenship are of course not affected. This is also the case for British nationals holding a diplomatic card, for example.
Social security coverage
In theory, the transfer of social security cover when a European national moves from one country to another only applies between European countries and, exceptionally, Cape Verde. This transfer should therefore no longer apply to British nationals moving to Luxembourg.
However, Luxembourg law provides that anyone working in Luxembourg benefits from Luxembourg social security. Nationals British nationals working in Luxembourg prior to Brexit will therefore continue to benefit from social security cover. This coverage includes health care, diseaseand other occupational illnesses, pension. The family allowances will continue to be paid as long as the child concerned is legally and continuously domiciled in Luxembourg.
Access to employment
British nationals residing in Luxembourg at the time of Brexit will be able to continue working. In the case of salaried employees, they have an employment contract; in the case of self-employed workers, they have an establishment permit.
However, in the same way as third-country nationals, they will now need a valid residence permit to continue working, whether as employees or self-employed.
British cross-border commuters will require a specific work permit, the details of which will be specified at a later date.
After Brexit, British nationals wishing to work in Luxembourg will need to have an appropriate residence permit authorizing the practice of their activity in the same way as third-country nationals.
Recognition of qualifications and validation of professional experience
From March 29, 2019, British people wishing to work in a regulated profession will first need to have a valid residence permit as required by law. They will then be able to have their foreign higher education diplomas recognized or their professional experience validated.
Financial assistance for higher education
British students will only be eligible forFinancial Aid for Higher Education if they have long-term resident status.
Driver’s license validity
Here again, in the absence of agreement on the conditions for leaving the European Union, British driving licenses will be treated in the same way as driving licenses issued by non-EU countries.
As a result, holders of British driving licenses residing in Luxembourg will be required to transcribe their driving licenses into Luxembourg driving licenses. They will have 12 months from March 30, 2019 to comply.
If this permit regularization is carried out before March 30, all categories will be recognized by the authorities. Otherwise, only categories A and B will be transcribed. Categories C and D will require a practical test. More information on guichet.lu.
Conversely, driving licenses from countries that are co-signatories to the Vienna Convention on Road Traffic of November 8, 1968, are still valid for occasional travel to the UK after March 29, 2019 .
For further information, please consult the specific Brexit FAQ on guichet. lu.
What impact on Luxembourg’s economy?
With the UK’s announced exit from the European Union in March 2019, the entire City of London is reeling. Indeed, the London finance industry is actively preparing its redeployment to other European financial centers. Luxembourg stands to benefit greatly. What are the possible consequences of the British Exit?
A redeployment of Europe’s financial center to Luxembourg?
Year after year, the Grand Duchy of Luxembourg maintains its AAA rating from the major rating agencies. Luxembourg benefits from a economic growth well above the average for neighboring countries. Its public finances are soundly managed. The political environment is solid. These are just some of the advantages Luxembourg has to offer companies looking to leave the UK and set up business within the European Union.
A number of banks, both English and non-English, are already expressing an interest in setting up in Luxembourg. Already established in Luxembourg, they could bring their activities from the City to the Grand Duchy.
What consequences on the Luxembourg real estate market?
The characteristics of the Luxembourg real estate market are a decisive factor in these companies’ decision to relocate to the Grand Duchy. The expected returns on corporate real estate investments are much higher in Luxembourg than in other European capitals.
The benefits for the Luxembourg real estate market include both commercial and residential property. On the one hand, companies relocating to Luxembourg will have to invest in new office space to house their activities and employees. On the other hand, with regard to the residential real estate market, employees previously based in London will have to relocate to the Grand Duchy. The Financial Times thus estimates that as early as 2017, British companies were anticipating the Brexit. Among other things, this would result in a 10% increase in the number of people employed in Luxembourg asset management.
The Brexit should therefore see continued global investment in real estate in Luxembourg. All this points to a bright future for Luxembourg’s ever-growing real estate market!
