Background
Due to Brexit, the UK left the European Union on 31 January 2020. To avoid legal gaps and ambiguities about applicable laws and regulations, Switzerland implemented the “mind the gap” strategy that aimed at a smooth continuation of the existing partnership between the UK and Switzerland.
Consequently, the UK and Switzerland concluded various bilateral agreements to define their post-Brexit relationship. In particular, they concluded the Services Mobility Agreement (SMA), which namely governs the short-term provision of cross-border services by UK-based service providers such as business consultants, IT experts and engineers in Switzerland. The SMA has been preliminarily valid since 1 January 2021 and was concluded on a temporary basis for two years.
Continuation of the online notification procedure
Under the SMA and according to Switzerland’s practice, UK-based service providers* could send their employees to Switzerland to provide services for up to 90 days in a calendar year by using the online notification procedure, which is commonly used for short-term service provisions in Switzerland (cf. for further details Section 4 of Hiring UK nationals in 2021).
On 9 November 2022, the Federal Council decided to extend the SMA until 31 December 2025, which was announced by the State Secretariat for Economic Affairs on 21 November 2022 (Switzerland–United Kingdom: Services Mobility Agreement extended). The government reasoned that the SMA meets an important need of the Swiss economy and has been working well so far.
Hence, UK-based service providers continue to benefit from rather easy access to the Swiss market when it comes to cross-border service provision. This means that UK-based service providers can continue to use the online notification procedure and tool to provide services in Switzerland for up to 90 days in a calendar year. Nonetheless, it needs to be kept in mind that these 90 days count per service provider (business) and per posted worker, respectively.
Nevertheless, any service provisions exceeding 90 days in a calendar year are still subject to a corresponding Swiss work permit. Additionally, any local employment of UK citizens by a Swiss-based company is also subject to a Swiss work permit.
*This regime extends to intra-group business travellers and service providers respectively.
Date of effectiveness and outlook
The prolongation of the SMA became effective as of 1 December 2022.
Since 2021 more than 4,000 UK services providers have used the online notification procedure to provide services in the Swiss market and to Swiss customers under the SMA. Given the easy access to the Swiss market for UK service providers, it is expected that this number will increase over the course of the next three years. Many UK service providers were pleased to hear that this rather simplified access to the Swiss market will continue for a while.
Further, the SMA establishes a working group, through which the UK and Switzerland intend to develop a comprehensive agreement on the recognition of professional qualifications for service providers working in each other’s markets. Thus, the numbers of service providers performing cross-border work could increase even more in the future.
