Current situation

The EU Services Directive (2006/123/EC) makes it easier for businesses to establish themselves in other Member States, and to provide services cross-border on either a temporary or permanent basis. The Services Directive is implemented into UK legislation by the Provision of Services Regulations 2009.

The Regulations simplify the rules for, and prevent unjustifiable barriers to, the provision of services. They ensure that Competent Authorities, including government departments, Devolved Adminstrations, local authorities and other licensing and authorisation bodies, comply with a set of regulatory principles. 


After October 2019 if there's no deal

When the UK leaves the EU, EEA businesses will be treated like other third country service providers as the Regulations will need to be amended to comply with the UK's commitments under World Trade Organisation rules. 

The Regulations will continue to ensure that businesses in the UK are not subject to disproportionate or burdensome regulation. For example, businesses and consumer rights will be protected as UK Competent Authorities will continue to regulate service provision in line with the genera principles of open competition.

The government will continue to work with the Scottish Government, Welsh Government, the Northern Ireland Civil Service and Competent Authorities to ensure future arrangements for provision of services work across the UK. These arrangements are without prejudice to the rights and privileges accorded, by the Common Travel Area, to Irish and UK citizens when in each other's state.


Implications

The scope of the UK Regulations will be amended to apply to UK nationals established in the UK and UK-established businesses. EEA businesses will no longer have preferential access rights and protections provided for by the Regulations. Competent Authorities will be able to regulate EEA businesses in the same way they regulate third country service providers. The UK Services market is highly liberalised and it is not envisaged that EEA businesses will face additional barriers to entry to the UK Services market.

Uk businesses providing services in the EEA would no longer be covered by the EU Services Directive. As a result, countries in the EEA could treat them in the same way as they treat third country service providers. In many EEA countries, the regime for third countries has different requirements. This could result in additional legal and administrative barriers for UK firms, such as requirements based on nationality, re-submitting information to regulators and potential loss of access to any online portal to complete mandatory applications and licenses where this is only available to EEA nationals. The tangible impacts this would have on businesses will likely vary depending on sector and the Member State.

A 'No Deal' scenario will also mean changes for UK nationals providing services in person into EEA countries, whether on a short term 'fly in, fly out' basis, longer term movement to provide services to clients, or placements within other parts of the business. Businesses should check whether a visa and/or work permit is required and otherwise comply with the immigration controls in place in each Member State where the service is being provided in person. This would vary depending on the Member State in question. If the provision of services relies on a UK qualification being recognised by a Member State regulator, individuals should check the host state national policies. The EU Commission has stated that decisions on the recognition of UK qualifications in EU Member States before exit day are not affected. 


More information

The government has laid the legislation to update the Provision of Services Regulations which will come into force by exit day. There is also an Explanatory Memorandum, which explains the regulations in more detail.

In 2009, the government published guidance providing businesses and Competent Authorities (who set licensing requirements and authorisation schemes for businesses) with detailed advice on the principles and suggested direction for the application of the Services Directive. In the scenario where the UK leaves the European Union on 31 October 2019 without a formal agreement, the published guidance will be updated to reflect the changes that are made to the the Provision of Services Regulations 2009. It would provide further information on the restrictions requirements that may be imposed on the EEA service providers.