The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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​Passporting: Concerns & Realities

The crown of UK is its financial services sector: buying and selling across the EU and the world. 

Now, fresh fears about the backbone industry of London are on the rise. EU's chief Brexit negotiator Michel Barnier announced last Monday that firms based in Britain will lose their "passporting" rights post Brexit. 

A "passport" allows financial firms in the UK to sell their services within the EU. Without a passport, firms may no longer be able to operate these services out of the UK. To continue selling to clients within the EU, businesses would have to establish subsidiaries in the EU and apply for a local license.

The issue isn't that simple. 

"There's no such thing as a single passport," Edward Farmer, Managing Partner of Intrinsic Partners and member of Brexit Alliance, said. "There about eight or nine directors that effective you can take." 

It's also more about European banks having access into London. The city offers a whole range of services that make the system work. 

"It's actually about European banks coming here to do banking business, that's where the loss is," Farmer said. "It's very important for European banks to come to London." 

There are "workarounds": establishing a sales office in an EU country instead of moving the whole operation from London. Estonia, for example, offers e-residency that allows anyone in the world to apply and become a digital resident of Estonia. E-residents can run a business.

 "E-residency allows companies to have a presence in the single market, they can have an Estonian registered company, and not need to be physically present in Estonia," Alex Wellman, marketing head of e-Residence at Enterprise Estonia, said. "People who benefit from this are people in the UK."

The future of UK's financial services sector remains bright. Be sure to watch our video to further learn about the intricacies of passporting.

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Thursday, 21 February 2019