Trade in Services

Key facts: 

  • The UK will be outside the European Single Market, including services.
  • Local (host-country) rules and World Trade Organization (WTO) rules will apply and in some cases, service providers will need an EU presence.
  • The EU-UK Free Trade Agreement is being negotiated and contains a chapter on trade in services.

After the transition period ends, businesses will trade with the EU on the same condition as businesses from other outside countries. This means that they cannot freely provide their services, and barriers can be expected. WTO rules (in particular the General Agreement on Trade in Services – GATS) will become the baseline trading terms for accessing the EU services market. Also, local rules will apply when doing business in EU countries (“host-country” rules). The forthcoming EU-UK trade deal could slightly improve these market access conditions.

To do

Anticipate the new commercial environment for trade in services and consider the following:

Laws

Employment and mobility requirements

Tax

What’s next?

Until the end of the transition period, business visitors, contractual services suppliers and independent professionals can continue to do business, provide their services and send staff to work in the EU. The EU and the UK will have to agree a list of allowed business activities, access to markets for defined sectors, recognition of professions and skills levels, as well as conditions for investment. See chapters 9-10 in the Comprehensive and Economic Trade Agreement between the EU and Canada for examples of how the freedom to provide services and to set up a business could be replaced, and what the UK’s access to the EU market could look like.

Disclaimer At the time of writing, the transition period ends on 31 December 2020, and the changes outlined in this fact sheet will occur from 1 January 2021. If that date slips, the changes will still happen, but at a later date. For latest updates go to www.gov.uk/transition.

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