Life of British Expats after Brexit
1. How many UK citizens live in Cyprus?
According to a 2018 census, the total number of foreign nationals living in Cyprus is 155,600 (meaning approximately 18% of the total population living in the areas under the control of the Republic of Cyprus). According to the same census, approximately 25,000 UK nationals living on the island. These figures are definitely underestimated due to the fact that a large number of European citizens, including Britons, who own a house in Cyprus, have not so far applied for certificate of permanent residence. Statistics by the Cyprus Ministry of Finance state that approximately 60,000 – 90,000 citizens of the UK live permanently in Cyprus with 30,000 – 40,000 of them living in the district of Paphos (most important areas being Pegeia, Polis Chrysochous, Tala, etc). To this number, we must add the personnel of Akrotiri and Dhekelia Sovereign Bases amounting to 15,000 people.
In total 16,000 UK nationals have submitted a request to acquire certificates of residence from the day of the 2016 referendum for Brexit until today (01/2020). In total, 8,700 people have submitted a request for registration certificates (MEU1), which all European citizens are obliged to acquire after four months of continuous residence in Cyprus. Approximately 7,900 citizens filed a request for certificates of permanent residence (MEU3), required for non-EU citizens. As expected, more than 80% of the applicants for permanent residence are pensioners aged over 60.
The United Kingdom’s withdrawal from the European Union on 31 January 2020, will undoubtedly lead to a revision of the relationship between Cyprus and the United Kingdom. It is wrongly believed that because Cyprus is a member of the Commonwealth of Nations it will have a different course than the rest of the EU member states. Issues regarding the movement of goods, persons, services, and capital (“The Four Freedoms”) are exclusively regulated at the level of European institutions and not at the level of independent states.
One of the main reasons for the United Kingdom’s decision to leave the European Union was the need to stop the continuous flow of economic migrants from poorer countries of Eastern Europe but also the flow of asylum seekers from Third Countries, which a large part of Britons believed they constituted a danger to the cohesion of British society. If fear for migrant flows leads to a hard Brexit, then it is certain that those Britons wishing to migrate to the sunny countries of northern Europe in the future will face bureaucracy, restrictions and maybe economic criteria similar to the ones they would have faced if they had chosen Southeastern Asia or the Caribbean. In any case, the European Union will operate on the basis of the reciprocity principle, placing pressure for a soft Brexit that will have a limited impact on the benefits of the 3.7 million European citizens who live in the UK.
2.1. Procedures to Get Residence Permit
In order to understand the form of the relationship that the United Kingdom will have with the European Union, we must begin by examining the Withdrawal Agreement, which was passed by the House of Commons on 20 December 2019. This agreement provides for a transition period until 31 December 2020, which may be prolonged if requested by the UK Government until the end of 2021 or 2022. During the transition period, the rights of Britons in Cyprus will remain unaffected since the United Kingdom will continue being a full member of the European Union. The only important difference will be that during this period the United Kingdom will not be able to be represented at the various institutions of the European Union.
The question on the form of the future relationship between the UK and the EU and how this will affect British expats can only be answered by the Political Declaration on the future relationship between the two entities which constitutes an important part of the Withdrawal Agreement. For the time being, the only thing that is being regulated on the basis of this document in relation to the movement of people is that procedures for issuing visas for short visits between the EU and the UK will be set aside. This will concern leisure trips lasting less than a month. It is also expected that some special arrangements will be made for students.
Even though the current legal framework as this is expressed in the bilateral International agreements is still vague, we can draw some safe conclusions. Initially what we expect regarding British expats who are already residing in other countries of the European Union is that they will be given a sufficient period of time to submit their application for permanent residence. This will be the case also for Britons who will move to Cyprus in 2020 and maybe also in 2021.
2.2. What is the provision for Britons already residing in Cyprus?
Already, as of October 2019, the governments of Spain, Portugal, Cyprus, and Malta have announced the procedures for acquiring permanent residence in case the United Kingdom withdrew without an agreement from the European Union. Specifically, in Cyprus three procedures were announced for which an application could be submitted by 31-12-2019:
- MEU1 or Yellow Slip (for UK nationals who have been continuously living in Cyprus for more than three months)
- MEU2 (for family members of UK nationals that are not European Union citizens)
- MEU3 (for UK nationals who have been continuously living in Cyprus for more than five years)
After the parliamentary elections in December 2019 in the UK and being aware that the United Kingdom will have an organized withdrawal from the European Union with an agreement in place, it must be expected that there will be an extension until at least 31-12-2020 so that all British expats wishing to continue living in Cyprus will have the time to submit their applications.
3. The future relationship between Cyprus and the United Kingdom
There is still, however, the complex question about the difficulties any UK nationals are going to face if they wish to move to Cyprus after the country’s irrevocable withdrawal from the European Union.
This depends to a large extent on the more general form of the future relationship between the EU and the UK. The much-advertised soft or hard Brexit, in fact, constitutes an oversimplification of the question on the integration model the UK wants to have with the EU. Even though the British model will have its particularities due to the issue of Northern Ireland, we must expect that a model similar to the following ones will be adopted:
- Norwegian (Participation to EEA, EFTA and the SA)
- Swiss (Participation to EFTA and SA)
- Turkish (Participation to ECU)
In the parenthesis, next to each model we note the multinational organization in which the countries are active and the agreements which are currently in force in Europe.
- EEA= European Economic Area
- EFTA= European Free Trade Association
- ECU= European Customs Union
- SA = Schengen Agreement
3.1. Norwegian Model
This model has been adopted by three European countries, Norway, Iceland and Liechtenstein. These counties chose to enjoy the benefits of the EU common market and have fully harmonized their legislation regarding the free movement of people, goods, services, and capital. Their differences with the EU member states are that they do not participate in the European institutions and have made no commitment to further political consolidation (for example establishment of common fiscal, monetary, defense and foreign policy).
Regarding free movement of people, with the adoption of the Norwegian model, UK residents will have the ability to come to Cyprus to live permanently, to work and to study but simply for security reasons, after a specific period of time from the date of their first arrival to Cyprus, they will have to register at their nearest police station in order to receive their Alien Registration Card (ARC) and their Registration Certificate (a version similar to that of MEU1).
British pensioners will be able to move to Cyprus provided they prove sufficient income to support themselves and their family. Even though we are unable to know exactly what these financial preconditions will be, we may draw some conclusions by studying the current permanent residency programs for third-country nationals living in Cyprus.
Most probably, the applicant will have to prove that he/she has an annual income of at least €30,000 – €35,000 for himself/herself and additionally, an annual income of €5,000 – €10,000 for any dependent member of his/her family. This income must come from abroad and not from investments in Cyprus. This income may come from pension, rent, interest, dividends, etc.
Moreover, an additional criterion that applicants might be asked to provide would be a banknote for €20.000 – €40.000 that will be deposited at a Cypriot bank and which will be frozen for at least three years. It must also be proven that this money was transferred to Cyprus from abroad.
Finally, it is certain that all Britons will be asked to have medical insurance. Regarding this issue we are expecting that one of the following procedures will be necessary:
- Have an Immigration Insurance (https://www.pitsasinsurances.com/en/products/immigration/)
- Registration to the General Healthcare System (the cost of which corresponds to 2.65% of the declared income for local people) (www.gesy.org.cy)
- Acceptance of an international medical insurance program (https://www.pitsasinsurances.com/en/products/medical/)
Employees from the ΗΒ
If the Norwegian model comes into force, employees will have to register with the police authorities as employees, presenting all necessary documents, something that will permit them to also bring their families to Cyprus.
For those seeking a job, they will most probably be allowed to stay in Cyprus for up to six months to seek employment and to carry out the relevant interviews. For those who are fired or have resigned but who have worked in Cyprus for at least a year then they will have the right to seek employment and carry out the relevant interviews to find a job.
UK nationals will no longer be able to participate in the European Parliament elections but will have the right to participate in the local municipal elections.
3.2.The Swiss Model
The Swiss model has important differences from the Norwegian one and is exclusively implemented by Switzerland. On the basis of this model, the United Kingdom will have the ability to participate in the common market under the precondition that it will harmonize its legislation with that of the European Union, regarding the four freedoms. Through bilateral agreements, Switzerland has chosen to fully harmonize its legislation regarding the movement of goods and services. Despite this, however, it has adopted a much stricter legal framework regarding the free movement of people and capitals. As a rich country, Switzerland wants to raise serious obstacles to those European citizens wishing to move there and enjoy the benefits of high salaries and high allowances of its social state.
In case this model is adopted, then Cyprus must expect that all Britons coming to Cyprus will have to register with the local authorities for foreign nationals or anywhere else the state will decide (for example police stations) within a short period of time from the date they enter Cyprus (10-15 days) so that their presence in Cyprus will be made known.
For those wishing to live permanently in Cyprus and if this model is adopted, then after a period of 3-6 months they will have to submit a request for the residence permit to the local authorities for foreign nationals (a procedure similar to that of MEU3). At this stage, it is impossible to know the form of this procedure but it must be taken for granted that the same economic criteria described in the Norwegian model will also be applied while additionally a clean criminal record will be required. It is self-understood that pensioners will have to present evidence that they do not work in Cyprus. Moreover, in this case, as well as medical insurance will also be required.
This is the most remote scenario of all and it must be taken for granted that it will not be implemented in this radical form. On the basis of this scenario, the United Kingdom will exclusively participate in a European Customs Union. This, in practice, means that from the four freedoms only the free movement of goods will be implemented. On the basis of this scenario, residents of the United Kingdom who want to move to Cyprus will have to go through all bureaucratic procedures needed for third-country nationals.
4. Programs to acquire permanent residency through investment
In the extreme case, things take a negative turn and a model of cooperation with the European Union is adopted which will considerably limit the ability to move to Cyprus, the Republic of Cyprus provides the ability to acquire permanent residency through the purchase of a first home.
Detailed information on this program can be found at https://www.amazonfinance.eu/en/service/legal/permanent-residency