Cyprus and Malta investment programmes after Brexit
Hazar El-Chamaa, partner at Penningtons Manches, says that Cyprus and Malta investment programmes need to be reconsidered following the Brexit announcement.
Following the Brexit vote, what is your advice for EU nationals?
We are advising no panic but to assess their circumstances. Those seeking assurance on their status, and we were inundated with enquiries from both individuals and employers, we are assisting them with applications for both confirmation of permanent residency and British citizenship.
What effect will Brexit have on UK businesses?
One of our large multinational clients has over 600 employees from EU/EEA, many of whom have not been in the UK long enough to qualify for permanent residency. Any transitional arrangements the government comes up with have to take this problem into account otherwise it could be damaging to these type of businesses. In her latest speech at the Conservative party conference, Theresa May did give assurance to existing workers that their legal rights will continue to be guaranteed in law for as long as she is Prime Minister. However, we don’t know what form this guarantee will take, for example will the government allow all those current workers in the UK to acquire permanent status post-Brexit?
Cameron doubled the required investment from £1m to £2m for the Tier 1 (Investor) visa application. How did that impact UHNW clients planning to invest in the UK?
The UHNW for whom the investor visa was the preferred option still applied. However, we are seeing younger more entrepreneurial wealth creators who even though they have the £2m are opting for the £200,000 entrepreneur visa instead. With regards to the other investment programmes, prior to the increase some investors applied under the Cyprus and Malta investment programmes as they provided a quicker route to a European passport. This was still the case following the increase but now post Brexit these programmes have lost their appeal to those who want to reside in the UK, because of the current unknowns. We have seen an increase in those who obtained alternative citizenship via the Cyprus route for example now wishing to apply for registration certificate to confirm that they are exercising treaty rights in the UK.
Are Dublin and Frankfurt going to benefit from London’s uncertainty?
We have already seen some investors in startups making it a condition of investment that the business be based elsewhere in Europe rather than the UK. However, the UK is still attractive to businesses due to competitive tax environment and it’s highly skilled workforce. Those that are considering a move are waiting to see what the government will do before making any decisions. They are also feeding their concerns to the relevant committees set up by the government post Brexit. Businesses that do make the move to stay in the single market will need to consider the position of their British workers, as they will then be subject to the immigration rules of the relevant country the business moves to.Dublin may fall into special consideration as there are specific agreements between the UK and Ireland which we anticipate will be subject to separate negotiations. Indeed Ireland and also France have already said that they have unique concerns that will need to be addressed in future negotiations.
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