Brexit: Workforce impact and steps to take for UK nationals working in Luxembourg
04/12/20
In Brief
Further to the Withdrawal Agreement, the United Kingdom (UK) left the European Union (EU) on 31 January 2020 and the transition period in place since 1 February 2020 will end soon on 31 December 2020.
Until the end of the transition period, nothing is changing for citizens and businesses, neither in the EU nor in the UK.
The agreement safeguards the right to stay and continue their current activities for EU citizens in the UK, and UK citizens in EU countries.
If the Withdrawal Agreement has defined the rules during the transition period as detailed below, what will happen after 1 January 2021 in terms of immigration for UK citizens already working and / or living in Luxembourg? What will be the rules for new UK citizens coming to work in Luxembourg after 1st January 2021? All is not clear yet.
In detail
Who is covered by the agreement?
The agreement covers:
British nationals and their family members (except if also hold the dual nationality of one of the EU Member States or Norway, Iceland, Liechtenstein or the Swiss Confederation) residing in Luxembourg at the time of the United Kingdom’s withdrawal;
British nationals and their family members arriving in Luxembourg after the United Kingdom’s withdrawal and before the end of the transition period;
British nationals and their family members who acquired a right to reside or a permanent right to reside in Luxembourg and who are temporarily absent at the end of the transition period.
Brexit for workers
| Transition period | Post Brexit | |
| Immigration |
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| Social Security |
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| Tax | Bilateral double taxation treaty between Luxembourg and the UK will remain applicable | No change |
The right of residence and other rights
British nationals as well as their family members, who fall within the scope of the Withdrawal Agreement, have the same rights as EU citizens and keep these rights even after the end of the transition period.
Those covered by the Withdrawal Agreement will need to apply for a specific residence document, provided by the Luxembourgish government, which certifies their status as beneficiaries of the Withdrawal Agreement. Applications must be submitted within six months of the end of the transition period, which means no later than 30 June 2021. This document is different from the document issued to EU citizens.
British nationals and their family members covered by the draft Withdrawal Agreement will also keep the same rights as EU citizens in Luxembourg in the following areas:
Access to the Luxembourg job market without having to apply for a work permit, including public sector jobs;
Recognition of academic (register of qualifications) and professional qualifications (recognition for access to a regulated profession);
Financial aid/support for higher education.
Cross-border workers
A cross-border worker is an individual employed in the Grand Duchy and residing in the neighbouring Member State, to which he in principle returns every day or at least once a week.
British nationals residing either in another EU Member State or in the United Kingdom and working in Luxembourg are authorized to engage in paid employment in Luxembourg, if the salaried activity has begun before the end of the transition period. The concerned cross-border workers may request a document attesting their right to exercise their salaried activity in Luxembourg after the end of the transition period. However, the authorities have not yet defined the procedure.
British nationals who reside either in another EU Member State or in the UK and who wish to start to work in Luxembourg after the transition period will be subject to the rules governing access to the labor market for third country nationals. They must therefore request a work and residence permit and must wait for the decision of the Ministry of Foreign Affairs before they can start to work in Luxembourg.
Conclusion
Steps to take and key questions
Getting Insight
Trace and assess the current and future impacted employees, including local hires, expats, commuters and business travellers.
Operations
- Make sure all compliance actions are executed timely, correctly and completely.
- Expect longer lead times for existing processes due to extra immigration actions.
- Ensure all compliance paperwork is in order post-Brexit.
Communication
Make sure employees know what to expect and how the post-Brexit rules will affect them and their day-to-day business.
Planning & Strategy
Reconsider workforce strategy, travel policy and analyse cost-efficiency
Key questions:
- Have you mapped UK nationals working at your company and their family members?
Do you have commuters or business travelers and do you know how they will be affected?
Do you have a Brexit communication and operations team?
Are you aware of the consequences of Brexit during and after the transition period?
Will you assist your employees to apply for a long-term status after Brexit?
If you face difficulties addressing these questions, then call us and we will help you.
1. PwC Luxembourg (www.pwc.lu) is the largest professional services firm in Luxembourg with 3,000 people employed from 75 different countries. PwC Luxembourg provides audit, tax and advisory services including management consulting, transaction, financing and regulatory advice. The firm provides advice to a wide variety of clients from local and middle market entrepreneurs to large multinational companies operating from Luxembourg and the Greater Region. The firm helps its clients create the value they are looking for by contributing to the smooth operation of the capital markets and providing advice through an industry-focused approach.
2. The PwC global network is the largest provider of professional services in the audit, tax and management consultancy sectors. We are a network of independent firms based in 157 countries and employing over 276,000 people. Talk to us about your concerns and find out more by visiting us at www.pwc.com and www.pwc.lu.
