While the United Kingdom remains a member in all but name, it loses its vote in the meetings in Brussels that ultimately decide EU policy on matters ranging from financial services to the definition of a European-made car.
The United Kingdom accounts for about 15% of the EU's economy and is its biggest military spender, and the City of London is the world’s international financial capital. But the United Kingdom's economy is worth about US$2.7 trillion economy, so is much smaller than the EU's current US$18.3 trillion economy.
Brussels will try to discern exactly how Prime Minister Boris Johnson plans to overhaul the United Kingdom: will he try to build a competitor just outside the EU by turbo-charging the economy and the City of London?
British and EU citizens will continue to have the right to live and work in each other's countries until the end of the year because both sides agreed a transition period which preserves membership in all but name until 2021.
The British government has told the estimated 3.5 million EU citizens living in Britain that they have until at least the end of the December to register to retain their rights.
Johnson has said he will introduce an Australian points-based immigration system after Brexit which he says would allow talented people into the country while barring entry to low-skilled workers.
Companies and Customs
The regulatory environment for companies won’t change following Brexit because of the transition period.
After the end of the transition deal, UK Customs will apply for goods coming from third countries to Northern Ireland only. For goods deemed to be headed for the EU market, UK authorities will collect EU tariffs.
There will be no Customs checks on the island of Ireland — they will be done in ports. UK authorities will be in charge of applying the EU Customs rules in Northern Ireland.
As soon as the United Kingdom formally leaves the EU on Jan 31, it can start negotiating trade deals with other countries.
The European Union — which accounts for about half of the United Kingdom's trade — and the United States are the government's top targets for securing new trade deals.
A sticking point in US talks will be a British proposal for a unilateral digital services tax, despite a US threat to levy retaliatory tariffs on British-made autos.
There will in effect be no change for Britain’s vast financial services industry dealing with customers in the EU for the next 11 months because of the transition period.
All EU financial rules will still be applicable in Britain until the end of December. Banks, asset managers and insurers in Britain will continue to have full, unfettered access to investors in the bloc during that period.
The sector's future access to investors in the EU will be one of the first issues to be discussed and must be finalised by the end of June.
The government will be looking for the EU to make what is known as an "equivalence" ruling to allow those firms to continue trading with the bloc.