Brexit and its impact on immigration in Switzerland

HOW WILL BREXIT AFFECT SWITZERLAND’S IMMIGRATION RULES?

Disclaimer: This booklet is a generalisation provided for information purposes only. Each client’s needs and specific objectives are different. It is important to examine them in detail. You should seek personalised legal advice before making any decision or taking any action. CROCE & Associés SA can take no responsibility for any decision made or action taken on the basis of this document.

All information in this document is current at 14th of December 2020.

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Table of content Introduction

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The transition period through to 31 December 2020

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What Brexit will mean from 1 January 2021

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Brexit and citizens’ acquired rights

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Brexit and working in Switzerland from 2021

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Residency without gainful activity

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Cross-border service provision and Brexit

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INTRODUCTION In 2016, the United Kingdom sent shock waves across Europe when it decided to leave the European Union, in a process that has come to be known as Brexit. The UK officially ceased to be part of the EU at midnight on 31 January 2020. As London and Brussels continue to hammer out the details of the split, Brexit will have consequences for Switzerland too, in particular in terms of immigration, because the country’s relationship with the UK is primarily based on the bilateral agreements signed between Switzerland and the EU while the UK was a member.

Over the last few weeks, our lawyers have fielded numerous questions from British nationals, both those looking to emigrate to Switzerland by the end of the year and those highly concerned about the consequences of Brexit on their Swiss residency. We have written this note to reassure some readers and to encourage others to take the necessary steps as a matter of urgency. Although we will not cover the consequences of Brexit for Swiss people in the UK, it will of course affect them and they will have some administrative formalities to complete (for example, applying to the EU Settlement Scheme).

THE TRANSITION PERIOD THROUGH TO 31 DECEMBER 2020 Firstly, it is important to highlight that, in the withdrawal agreement, the UK and the EU agreed on a transition period which runs until 31 December 2020. Consequently, the Agreement on the Free Movement of Persons (AFMP) signed between Switzerland and the EU continues to apply to British nationals in Switzerland and Swiss nationals in the UK until the end of the year. In practice, this means that Swiss and British citizens are free to live and work in the two respective countries. In addition, they can still acquire all the rights to which they are entitled under the AFMP until this date.

WHAT BREXIT WILL MEAN FROM 1 JANUARY 2021 As of 1 January 2021, British nationals will no longer be able to benefit from the AFMP. They will be subject to the Foreign Nationals and Integration Act (FNIA). In other words, they will no longer have the right to work, or even to live, in Switzerland. They or their employer will have to apply to the cantonal authorities in advance for a work permit or residence permit. (As things stand, central government approval will not be required to issue permits to British nationals, so the process will be the exclusive responsibility of the cantons.) After Brexit, UK nationals

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will be subject to exactly the same rules as American, Brazilian and Chinese nationals, for example. We will come back to this later.

Of course, the two countries may make a bilateral agreement in the future, to follow in the footsteps of the agreement signed by the Federal Council on 14 December 2020 on cross-border service provision (see below), and indeed we feel this is highly likely. It is however impossible to predict the outcome of the negotiations, and you would therefore be well advised, if you are affected, to complete the necessary paperwork on time.

For example, if you are a British national holding a legitimation card (an international civil servant, for example), we recommend that before the end of the year you apply for a permit B for your spouse if they are British too (unless they are also a civil servant) and for other family members, so that they are eligible for family reunification in Switzerland later.

BREXIT AND CITIZENS’ ACQUIRED RIGHTS In February 2019, as part of a strategy named “Mind the gap”, Switzerland signed an agreement with the UK on citizens’ acquired rights. This agreement will come into force as soon as the AFMP ceases to apply, on 1 January 2021. Under the agreement, both Swiss nationals in the UK and UK nationals in Switzerland who had acquired rights under the AFMP (such as residency rights) will retain these rights after Brexit. They include the right to: -

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residency with gainful activity (employees and self-employed workers), residency without gainful activity, family reunification, gainful activity in Switzerland as a cross-border worker, ongoing cross-border service provision (up to 90 days per calendar year) in the other country, for self-employed workers and businesses based in Switzerland or the UK, so long as the provision began before 31 December 2020, freedom from discrimination, property ownership in Switzerland.

This means that British nationals holding EU/EFTA residence permits, cross-border permits or settlement permits issued before 31 December 2020 and who are therefore registered with a commune do not need to complete any additional formalities. They may need to exchange their residence permit (i.e. to swap the paper version for a biometric card), if and only if they are requested to do so by

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the authorities. Please note: this does not include holders of legitimation cards or Ci permits.

In addition, this agreement only applies to rights acquired before 31 December 2020. Anyone affected by Brexit needs to have exercised their right to free movement by this date. British citizens who move to Switzerland before the end of the year (based on their residence permit application date) are covered, but those arriving from 1 January 2021 onwards are not!

Employment or self-employment must have begun by 1 January 2021. Similarly, students must have started their courses in Switzerland and jobseekers must have arrived in the country by the end of the year. Family reunification for future spouses will continue to be covered by AFMP rules for five years after the agreement ceases to apply, so until 31 December 2025. Afterwards, FNIA rules come into play.

One last point to note is that UK nationals will be allowed visa-free entry to the Schengen area, which includes Switzerland, for short stays of up to 90 days in any 180-day period.

BREXIT AND WORKING IN SWITZERLAND FROM 2021 Brexit means that from next year, quotas will apply and only small numbers of qualified British workers will be admitted to Switzerland to work. There will be certain exceptions, for example for executives and specialists, trainees, doctoral and postdoctoral students and workers qualifying for family reunification. The admission criteria are laid down by the federal law mentioned above and the ordinance 7 rue des Alpes, 1201 Geneva • T +41 (0)22 906 85 00 • F +41 (0)22 906 85 01 info@croce-associes.ch • www.croce-associes.ch

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regarding entry, residence and gainful activity (OASA). They are also detailed in the FNIA directives.

As a general rule, work permits will only be issued to UK nationals if, first and foremost, their admission to Switzerland will serve the country’s economic interests.

To assess this condition, the cantonal authority (for example the OCPM in Geneva) will look particularly at the state of the job market, the long-term economic situation and the foreign national’s capacity to integrate in Switzerland.

Secondly, it is important to note that the admission of non-EU/EFTA workers to Switzerland is subject to quotas fixed annually by the Federal Council, which sets the maximum number of authorisations for the country as a whole and for each individual canton. As regards Brexit, the authorities have set a ceiling of 2,100 longterm residence permits (permit B) and 1,400 short-term residence permits (permit L) for the whole country. (The same quotas will apply in 2021.) These thresholds include workers posted to Switzerland for more than 120 days.

Thirdly, a third-country national can only be admitted to work in Switzerland if the position cannot be filled on the local or EU/EFTA labour markets. So, priority will be given to Swiss people, foreigners holding documents such as a settlement permit (permit C) or residence permit (permit B, etc.) and EU/EFTA nationals. Before employing a third country national, employers in Switzerland will be required to prove that they have tried and failed to recruit a worker from one of these priority groups. They will need to show that they genuinely attempted to recruit such a worker, by placing adverts in newspapers and on EURES (the European job mobility portal), talking to employment agencies and contacting the Swiss regional employment office (ORP), and that they allowed sufficient time for the process.

In addition, employers are required to provide the regional employment offices with details of job vacancies in professions, sectors or economic regions where, across the country as a whole, the unemployment rate is 5% or more. Each year, the State Secretariat for Economic Affairs (SECO) issues a list of professions covered by the obligation to communicate job vacancies.

Fourthly, only executives, specialists and other qualified workers are admitted to work in Switzerland. Qualified workers means, primarily, people with a qualification from a university or specialist higher education institution and several years of experience. In certain professions or areas, people with particular specialised training and several years of experience may be admitted. The immigration authorities will require the worker to submit their CV, exam certificates and work certificates.

Fifthly, the authorities will assess whether the person will be capable of integrating, professionally and socially, into Swiss society in the long term. The criteria examined 7 rue des Alpes, 1201 Geneva • T +41 (0)22 906 85 00 • F +41 (0)22 906 85 01 info@croce-associes.ch • www.croce-associes.ch

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will include their potential to adapt, on a professional and personal level, their language skills and their age. Sometimes, an integration agreement will be signed between the authorities and the person.

Lastly, the salary and employment conditions offered to foreign workers must match the usual conditions in the local area and the profession. In certain sectors of the economy, these conditions are set in collective employment contracts, which are binding in a canton or even across the whole country. These measures serve to protect foreign and local workers against social dumping and unfair competition. Workers must also have secured suitable accommodation.

Self-employed workers affected by Brexit can also be admitted to Switzerland if they meet the personal conditions listed above, if the financial conditions and operating conditions for their business are fulfilled, if they have a guaranteed sufficient, independent source of income and if they can prove that their selfemployed activity will benefit the Swiss labour market in the long-term (the country’s economic interests). There is considered to be a long-term benefit for the Swiss labour market if the new company contributes to the diversification of the regional economy in the sector in question, obtains or creates positions for the local workforce, makes substantial investments or generates new contracts for the Swiss economy. A detailed business plan must be submitted to the authorities.

RESIDENCY WITHOUT GAINFUL ACTIVITY Unless they come to study, for medical reasons or on the grounds of grave individual circumstances (as refugees, civil partners, to prepare for marriage, etc.), British nationals looking to secure residency without gainful activity will only be able to move to Switzerland as people of independent means, for which they will have to be aged over 55, have sufficient financial resources to live in the country, and above all, have strong personal links with the country. A foreign national is considered to have strong personal links with Switzerland if they have stayed in the country in the past, for either a fairly long time or repeated shorter trips (in particular for holidays), if they have strong relationships with close relatives in Switzerland (parents, children or siblings) or if they are of Swiss origin. Owning property in Switzerland or having commercial links with the country are not in themselves sufficient reasons.

Lastly, someone can be admitted to Switzerland without gainful activity if their presence is considered to be in the country’s “major public interest”. This is the case for example if there is a major tax benefit for the canton (the famous lumpsum tax regime). However, the sums that will apply to British nationals after Brexit are far higher than the thresholds set for European nationals. In certain cantons 7 rue des Alpes, 1201 Geneva • T +41 (0)22 906 85 00 • F +41 (0)22 906 85 01 info@croce-associes.ch • www.croce-associes.ch

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such as Geneva and Vaud, the figure will be almost 2.5 times the cost to EU citizens.

So clearly, Swiss residence permits will become very expensive for British nationals after Brexit!

CROSS-BORDER SERVICE PROVISION AND BREXIT On 14 December 2020, Switzerland and the UK signed a mobility services agreement. It will give service providers market access on a reciprocal basis so that short-term demand for services can be met quickly and easily.

Without this agreement, at the end of the post-Brexit transition period on 31 December 2020, cross-border UK service providers spending up to 90 days per calendar year in Switzerland would have been subject to the admission conditions set in the FNIA. Thanks to the agreement, despite Brexit, UK firms detaching workers to Switzerland (and self-employed workers based in the UK who are British nationals) will be able to continue to use the notification procedure for trips of up to 90 days per calendar year and will not be subject to prior assessment of the labour market. Details of the agreement have yet to be released, but it will include provisions on the recognition of professional qualifications.

It is nevertheless important to note that, as the agreement stands, access to the UK market will be limited to people holding a university degree or equivalent qualification. However, in an exchange of letters the UK has undertaken to reassess recognition for Swiss professional training qualifications.

The agreement will last for two years, with a facility for the parties to agree an extension. The text will come into force provisionally on 1 January 2021, and will be brought before the Swiss parliament by the end of June 2021.

For assignments in excess of 120 days, FNIA admission conditions will apply, and in line with the situation for other EU countries, there will be no legal right to an extension. Quotas will operate, as outlined above. *****

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Our specialist Swiss immigration lawyers are here to help with all your Brexit-related questions. We wish you a happy holiday season and all the very best for 2021. Let’s be honest, after 2020, things can only look up!

If you need any advice on this issue, please contact us.

CROCE & Associés SA Rue des Alpes 7 1201 Geneva Switzerland Tel. +41 22 906 85 00 Fax: +41 22 906 85 01 info@croce-associes.ch www.croce-associes.ch

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