The Spanish Royal Decree – What Happens if the UK Leaves the EU Without an Agreement…

The Spanish Royal Decree – What Happens if the UK Leaves the EU Without an Agreement…

The Spanish Royal Decree 5/2019 was published in the Spanish Gazette (“Boletin Oficial del Estado”) on the 2nd March 2019. This Royal Decree, that will need to be ratified by the Spanish Congress Permanent Council, establishes the steps that the Spanish Government will follow (subject to UK reciprocity) should the UK leave the EU without an agreement.

Amongst other things, this Royal Decree provides for the following matters:

Citizenship & Residency

Should the UK leave the EU without a deal, UK nationals will have 21 months to apply for a Spanish residency. Until this law has been enacted by the Spanish parliament, UK nationals will be permitted to reside in Spain on the basis of the permissions that they were granted prior to Brexit.

Financial Services

Regulated UK and/or Gibraltar firms that currently provide banking, securities, insurance or other financial services into Spain under the passporting regimes (freedom to provide services or establish a branch), will continue to be able to provide such services after the UK leaves the EU. However, after Brexit, those firms will be treated as non-European firms and they will need to seek authorisation from Spanish authorities should they: (i) want to provide other financial services in Spain; (ii) introduce major changes to the financial services provided before Brexit; and (iii) enter into new business relationships.

The provisions of this Royal Decree: (i) apply to both Gibraltar & the UK; (ii) and will only apply for a period of 2 months from its approval as detailed above if the UK authorities do not take similar steps as the ones specified in this Royal Decree to guarantee Spanish nationals rights in the UK; therefore, the Spanish Government is expecting reciprocity from the UK Government.