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A Brexit deal for Gibraltar was finalized on 31^st December 2020, just in time before the United Kingdom officially left the European Union. Gibraltar has retained its status of a British Overseas Territory, however, the UK and Spain have temporarily agreed to maintain freedom of movement between Gibraltar and Spain.

The agreement between the UK and Spain (EU/UK Gib Agreement) almost permits Gibraltar to be included under the terms of the Schengen Agreement for passport-free travel, although Gibraltar will not be completely included under the terms of the Schengen Agreement such as being a part of the Schengen information databases maintained by the European Commission.

The EU/UK Gib Agreement also maintains that Gibraltar will need to comply with the same rules of fair competition within the EU that other Schengen countries must meet.

Further to the above, the text regarding the EU/UK Gib Agreement also includes the following that must enter into force in the next 6 months:

• Role of Spain: The EU/UK Gib Agreement holds that Spain will be responsible to the EU for the application of the Schengen Agreement in Gibraltar including the border code and the protection of its outer limits. 
• Port and airport: Spain and Gibraltar will carry out controls on people and luggage at the port facilities in addition to other controls on cruise ships and the marina. Similar procedures would apply to arrivals by air. Spanish and Gibraltarian officials will share offices in an airport facility created for this purpose. 
• Schengen visa: The EU/UK Gib Agreement states that Spanish embassies and consulates will be responsible for issuing short term visas as well as long term visas to visitors arriving through Gibraltar. Spain would have to inform Gibraltar of visas being issued and it would be necessary to align Gibraltar with the EU’s visa policy.
• Residence permits: Gibraltar will be responsible for issuing residence permits for individuals applying for residence in Gibraltar. However, long term residence permits may be granted by Spanish embassies and consulates and would have to be in accordance with the harmonised Schengen model.
• Asylum: The Gibraltarian authorities will be responsible for granting asylum, but their decision will be subject to consultation with the European Commission to verify that it is in accordance with EU legislation.
• Judicial and police cooperation: Spain and Gibraltar will jointly monitor the external borders through fluid judicial and police cooperation, which will be reinforced.
• Customs Union: Gibraltar must apply “substantially” the same tariffs and trade policy as the EU, which includes customs duties, VAT, prohibitions and restrictions for security reasons and must provide the Union with reliable statistics on its imports of goods. These measures are important to avoid distortions in the internal market and in the neighbouring region, Andalusia.
• Environment: Gibraltar will not adopt or maintain any measures that weakens the level of environmental protection of the EU.
• Financial mechanism: The EU/UK Gib Agreement could include the creation of a financial cohesion mechanism between Gibraltar and the Campo de Gibraltar in terms of training and employment. EU funds could contribute to this financial mechanism.
• Cross border workers: The definition of this as per the EU/UK Gib Agreement is one that is broad and can cover both, employed and self-employed workers. There will be no limitations to cross border workers in terms of changing employers and the nature of their work. The submission of an application to be classified as a cross border worker will be sufficient to provide these individuals the right to seek employment and the right to cross the border for work.
• Personal information: To facilitate the flow of personal data, the agreement provides that European legislation on this matter will continue to apply to Gibraltar, adapting to changes.