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Andrew Henderson

Founder of Nomad Capitalist and the world’s most sought-after expert on global citizenship.

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Brexit is Here. What Should UK Citizens Do Next?

Global Citizen

November 4, 2024

Two weeks after UK voters did the unthinkable and voted to leave the European Union (EU), the fallout was unsurprisingly substantial. Global stock markets fell, the pound hit $1.2952 (its lowest since 1985), government bond yields dropped to record lows, the price of gold reached a two-year high, and three of the UK’s largest real estate funds froze 12 billion in assets.

Four years later, Brexit has now come and gone. The United Kingdom is out of the EU and UK citizens are now dealing with the consequences of the separation.

But even now, the full impact of Brexit is still unclear.

However, while I am not a Brexit specialist, it’s safe to say that there is no going back now. We are many months post-Brexit, the democratic system worked, you voted, and you didn’t win. Unfortunately, the downside of a democracy is that a lot of idiots who don’t know what they are doing get to vote in your elections.

But that’s the system that you’re in. 

Brexit is just another stark example of how strategies can change overnight with a single vote… and when you least expect it. In the beginning, no one really believed that Brexit would pass. And even now that the deed is done, no one knows what the ultimate outcome will be. 

Regardless of how things turn out, it’s always best to hedge your bets.

That’s what Nomad strategies are all about. Things are in a constant state of flux and Brexit is just a loud reminder that you need to have a Plan B that works. You need a strategy that’s set up for the long haul and not just based on shiny objects and chasing the latest strategies.

This is your wake up call to take action and get a solid Plan B in place.

So, how should UK citizens go about adjusting or creating their offshore plans in a post-Brexit world? 

In this article, we’ll cover every possible aspect of your offshore plan that could be affected by Brexit. Politics in the UK and the EU may be difficult to predict, but at least you can know how to address your taxes, living situation, business plans, second passport, residency options, banking, and investment in a post-Brexit world.

What Does Brexit Mean for You?

A lot of folks in the run-up to Brexit were panicked that their passport was going to become worthless. 

They were going to have no options, they were going to be stuck, and there was a mad dash of people trying to find any second citizenship that they could get. (I know, our site got over 100,000 views in less than 24 hours after the initial Brexit vote and the most popular article was The Fastest Countries in the World to Become a Citizen.)

I want you to calm down for a second. 

I believe that everyone needs a second citizenship, or possibly even a passport portfolio depending on your life goals and business type. After all, who truly knows what’s going to happen in the world of taxes and regulations? 

Having more options (like the ones that come with having a second passport) is always a good thing. But what will happen to the passport that you already hold and the privileges you have grown accustomed to as an EU citizen now that the UK is no longer a part of the European Union?

Here are a few things that have changed:

  • You can’t automatically work in the EU
  • You can’t send your kids to school in the EU under the preferential terms
  • You can’t get access to healthcare in the EU
  • You can’t just go and automatically live in the EU for as long as you want
  • You can’t retire to an EU country without going through the proper channels

That said, there are ways around almost every one of these challenges, especially for Nomad Capitalists who are willing to create a strategy and execute it to meet specific needs and goals.

Up next, while we won’t go over every item on this list, we will break down some of the biggest changes brought on by Brexit and how you can respond to them.

What does Brexit mean for you_
What does Brexit mean for your personal privileges? Is it enough to be concerned about?

UK Taxes in a Post Brexit World

To start off, if you are the kind of seven- or eight-figure entrepreneur who we work with and you’re a UK citizen, Brexit just put you on track for a potentially big tax advantage. 

Here’s why: there is a good chance that the EU, Canada, and Australia may all implement some form of citizenship-based taxation down the road that will make it harder to move overseas and live tax-free. 

If you read more than a few policy papers from the Organisation for Economic Cooperation and Development (OECD) and other high-tax organis ations and the trend is clearly moving toward more tax restrictions.

They are further cracking down on multinational corporations like Netflix and demanding that they pay some tax if they do business in their countries.

You can see the same trend in the US with GILTI and other regulations that are based on the belief that everyone should pay some tax. 

Post-Brexit UK is much less likely to impose something like this. 

The UK is actually quite an open place and, despite leaving the EU, will likely remain very international. 

So, if you want to be a Nomad Capitalist, it could be easier for you as a UK citizen because you no longer have to deal with the growing concern that the EU will eventually demand some payment from you no matter where you live. 

Clearly, the UK can stand up to organizations like the EU and the OECD and do what it wants. So, if I were a UK citizen, I would be happier to be done with EU tax laws and less concerned with the post-Brexit obstacles of living in Spain any time I want. 

There are so many ways to live in Europe – not so many ways to legally avoid taxes. The UK may still give you that chance.

Post-Brexit Restrictions on EU Living

As members of the EU, many UK citizens were accustomed to the privilege of checking out of their home country and going to live in a place like Spain. This often granted them the privilege of being tax non-resident (and, though I can’t think of a worse place to live than Spain for tax purposes, many people chose this option.)

Now, however, UK citizens don’t have the same privilege. You lost full access to quite a few countries. As hard as it is to accept, you’re basically in the same boat as Americans: you have to get a passport and won’t have automatic access to wherever you want to go.

It’s not the end of the world, but it does mean doing things differently with a few more limitations.

For instance, if you want the privilege of living in the EU, you are no longer able to just redomicile somewhere else. Instead, you need to have a residency in an EU country.

Without such a residency, retirees won’t have all their warm-weather options. Entrepreneurs are in the same boat, as well. I don’t know why any entrepreneur would be moving themselves to one of those high-tax countries in the Mediterranean, but other important options will be gone as well.

For example, you can no longer set up shop in places like Malta. Of course, you can still do the residency program in Malta, but it’s now more difficult and will cost you more.

You still have plenty of residency options, but you are basically now demoted to US status. This means that you probably have to make an investment in a country or fulfill whatever other requirements are asked of the rest of the world in order to live within EU borders.

Post-Brexit Business Solutions   

The Brexit situation also affects business owners. This is probably one of the main reasons big business largely favored remaining in the EU. I may not be a fan of the bureaucracy coming out of Brussels, but the Union does facilitate the movement of money, people, and products throughout the region and the world.

If the UK can manage to stay in the single market, it would retain most of these benefits. However, if Britain’s pro-Brexit Independence Party pushes through work permit restrictions, it’s likely that EU countries will reciprocate, barring UK citizens from living, working, and doing business in their borders without visas.

If you’re an entrepreneur, that means you can’t just pack up and move to Lithuania with the intention of paying 15% tax and cutting your cost of living. You have to go through the process of applying for a Lithuanian visa, show that you’ve hired three qualifying employees, give proof of your company, and make a deposit. 

You can no longer simply show up and run your UK company from Lithuania and only pay tax on the UK company.

If you’re a Brit who already set up your business somewhere cheaper in Europe, it may not be a big deal if you’re living in the UK. It will be a big deal, however, for a Polish person (for example) with a business in the UK who is relying on the EU.

It could be that the UK convinces the EEA to let it stay, but the situation is a precarious one and I wouldn’t make my plans based on that hope. Instead, start planning for the worst. (And I mean that in the least pessimistic way possible. This is just an unpredictable reality that we’re dealing with here.)

If you’re selling physical goods or you have some kind of presence, this is an opportunity to figure out what the problem is or will be and fix it. If your business is largely EU-focused or you’re in the UK and selling to Europe, figure out a way to make it more digital or global.

Either way, where you live is going to matter more and will increasingly affect your business options.

Will Brexit Affect Your Passport?   

Will the British Passport Become Worthless?

Since the finalisation of Brexit, a number of my British friends and clients have asked what they need to know about their British passport in the post-Brexit era.

What does the post-Brexit world mean for your UK passport? 

If your main concern about your passport is that your ability to travel will be limited, I don’t see this as an issue. I’m really not concerned that the UK passport is going to be devalued.

Again, this is like the UK becoming more like the US. UK leaders may not be on top of their game and the country is experiencing its own inner turmoil, but the passport will be just as good. 

Here’s the reality: You’re going to see a transition for the British passport, essentially on par with an American, Canadian, or Australian passport. 

UK citizens, starting in 2021 (assuming there’s no delay) will have to register every once in a while – before going to the Schengen area and Europe – you’ll have to fill out an electronic travel authoris     ation to go to Europe. And 99% of the time, you will be approved in a matter of minutes.

It’s annoying, but not the end of the world. 

What you’re going to lose really is just this full-time travel in Europe. You’ll still be able to travel to Europe, but likely for not as long. Other countries aren’t going to dump your visa-free travel just because the UK is no longer a part of the EU. 

Visa-free travel is based on the reputation of a country. And as much as you think your reputation has suffered from Brexit, nobody suddenly thinks that much less of UK citizens.

But if you’re still worried about having a passport in the EU, there are multiple ways to obtain one

In some cases, you may have to live in the EU full-time (or close to it) to eventually qualify for citizenship. If you’re an entrepreneur, there are one or two ways to get an EU passport without putting in much time on the ground. It will, however, cost you in taxes and you’ll be required to run a business. 

But the option exists.

The good news is that so many countries, especially since the Great Recession a decade ago, have introduced residence programs. There are freelancer visas, self-sufficient visas, and investment visas (like Golden Visas).

Another option is to pursue citizenship by descent. If you have Irish (or even Italian) ancestors, you may already qualify for citizenship. This will save you thousands of dollars and even years of residency.

A final option is to buy a passport in a country like Cyprus, or even Montenegro. If passport-level access to the EU is worth a million euros to you, go for it. Requirements are getting a bit more strict for EU citizenship programs, but it is an option.

Ultimately, unless you have a grandparent or parent from one of the EU countries offering citizenship by descent, be ready to do one of the following:

  1. Spend some money, start a business, pay some tax, and do some paperwork.
  2. Invest in real estate and live somewhere, or
  3. Write a big check.

If you’re not willing to do any of those things, then stop worrying about your passport because your ability to travel is not going to be affected.

We often work with people to figure out which second residence will be best for them. We look at lifestyle preferences, tax considerations, and many other things when looking into a residence program somewhere.

European residence programs are not always as straightforward as residence programs outside of Europe, but you can get residence. It’s a matter of choosing which program you want and how much time you want to spend there.

If you want to spend the majority of your time in Europe, there are a number of different programs. Choosing the right one all comes down to tax planning and personal preference. 

Consider Getting a Second Residence Now 

If you just want to live in the EU and bounce around full time, consider getting a residency by investment. This is where you put money in a bank or buy bonds in exchange for residency and a path toward eventual citizenship. 

If you don’t have or want to spend that much money, you can get an entrepreneur visa that could also lead to a passport.

Here’s the thing that I always remind people about with residency programs in Europe: if the end goal is a passport, don’t waste time getting started. The EU streamlined naturalisation requirements a few years back so that the minimum naturalisation period across the board is five years. Belgium used to be three, but the EU had them change it to five.

So, if being able to live and travel full time in the EU is a priority for you, then you should get off your tuchus and do it now. Acting swiftly is especially important because you’re still going to be without an EU passport for a period of time no matter what you do. If you get your residency now, you can minimise the amount of time you’re not an EU citizen.

If you’re not willing to do it now, then maybe you don’t really care that much about it. It’s worth it to have an honest gut check here.

The other question is which residency or passport to get, or which to avoid. After all, there’s no knowing what’s going to be left of the EU. The good news is that the countries that I tend to like in the EU for entrepreneurs will probably stick around.

As a word of caution, I would probably skip Hungary. Not only should you not trust them with your money for a whole year (they’re all a bunch of crooks) but there’s a good chance that they might leave the EU as well.

If you have money, the answer is probably Portugal. You can live there and not pay tax; plus, it’s warm.

But, again, if you’re not willing to start a business, hire someone, put money in a bank, and pay a government fee, don’t bother with a second residency.

UK Passport and EU Travel Post Brexit
If you have a legitimate need for an EU residence or citizenship, don’t wait to get started.

Diversify by Banking Offshore    

From my standpoint, the main ailments of Brexit are financial. Look at what happened with the pound. That was a mess.

This is the perfect reason to be diversifying out of your home country. 

Plus, opening a bank account in the EU can get you EU residency and potentially a passport (if you’re willing to do the work). This is a great way to kill two birds with one stone: open a bank account, get twelve currencies, and use that to get a residency in the EU.

The main goal here should be diversification. I, for one, don’t know why you would store gold in London to begin with. I know it’s a financial center, but the country has so many issues between the EU and its own internal problems — and you’ve got VAT on top of that — so I don’t get the allure of banking there.

This is the perfect opportunity to remind yourself to move your gold offshore where you can get some leverage on it and make a better investment. Keep it somewhere outside the European Union. Somewhere not in turmoil. You never know what’s going to change next.

For instance, will the government decide it needs to raise taxes? What if they follow Cyrpus’ example and determine that they have to grab money from people’s bank accounts? They could even go down the path that the Netherlands has taken and impose a wealth tax.

There are too many ‘what if’ situations that could play out to your disadvantage. Do you want all your money sitting in the UK just waiting for the politicians to need your money? 

Why not make this your excuse to go somewhere else?

Make Smart Investments      

On a similar note, I would stay away from the UK for a while in terms of investments. Property values could go down and investment taxes could well go up. You’re going to have problems, you’re going to have turmoil.

I’m not trying to be super pessimistic, but you shouldn’t be investing in the UK anyway. London is a bubble. It’s expensive, it’s overpriced, the yields stink, and you have a government that is stable, but not exactly trustworthy.

So, make this your excuse.

Things could get worse. They might not, but there’s a lot of writing on the wall. Create your insurance policy. If anything, this whole affair should serve as a kick in the behind to do what you should have done anyway and invest somewhere else.

Oh, and if you have real estate investments in the UK that you can sell, sell them. You can then use that money to buy real estate in an EU country to qualify for residency and a passport. Just another way to kill two birds with one stone.

Many Options, One Goal 

As unexpected as Brexit may have been and as unpredictable as the outcomes may be, you have plenty of options to accommodate your offshore plan to the circumstances.

The options are endless, really.

Between banking, residency programs, passports, investing, businesses, and more, you have a wealth of good decisions that you can make. 

And there are plenty of good countries to choose from as well, including but not limited to the following:

There are so many different options bouncing around, so what are you going to do? As always, how are you assembling your goals? What is your number one goal?

Whatever it is, figure it out and act now before another unexpected turn of events comes your way. And if you want a little help from our team to plan and execute it all, reach out.

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