From 11 January 2027, banks that are incorporated outside the European Union will be prohibited from offering core banking services—deposit‑taking, lending (including consumer credit and mortgages), and issuing guarantees—to clients who are resident in the EU unless the bank operates a licensed branch in the member state where the client lives. The requirement is set out in Article 21c of the sixth Capital Requirements Directive (CRD VI), Directive (EU) 2024/1619, adopted in January 2024.
Scope of the rule
- Who is affected – “Third‑country undertakings” (any non‑EU bank) that provide core banking services on a cross‑border basis to EU‑resident customers.
- Geographical coverage – The entire European Economic Area (27 EU members plus Iceland, Liechtenstein and Norway).
- Implementation deadline for member states – National transposition had to be completed by 10 January 2026. Only five states (Czech Republic, Denmark, Hungary, Italy and Slovenia) met the deadline; the European Commission opened infringement proceedings against the remaining 22 in March 2026. Some, such as France, have since transposed the directive, while others (e.g., Cyprus, Luxembourg) are still drafting national rules.
Exemptions
The directive contains four limited carve‑outs:
- Reverse solicitation – If an EU resident independently contacts a non‑EU bank without any prior marketing or solicitation, the bank may provide services without an EU branch. The exemption is narrowly interpreted; banks must be able to demonstrate that the client’s approach was truly unsolicited.
- Grandfathering – Contracts concluded before 11 July 2026 remain valid and can continue to be serviced. An account opened with a non‑EU bank before that date is unaffected, but any amendment that creates new business may fall outside the exemption.
- Intra‑group transactions – Services provided within a corporate group are exempt.
- Services to EU‑based banks – Transactions directed to EU‑resident banks are not covered by the restriction.
In practice, many non‑EU banks are expected to decline new EU‑resident applications rather than assess each request against the reverse‑solicitation test, creating a commercial barrier even where a legal exemption exists.
Residence, not citizenship
The rule applies to individuals “established or situated in” the EU, irrespective of nationality. For example:
- A German citizen who is tax‑resident in Montevideo (Uruguay) is not subject to the restriction.
- A Brazilian national living in Lisbon is subject to the rule.
This distinction turns the regulation into a residence‑planning consideration for high‑net‑worth individuals who wish to retain access to non‑EU banking services.
Likely response from foreign banks
The EU’s objective is to encourage foreign banks to set up regulated branches within the Union. Industry commentary suggests skepticism that many banks from Hong Kong, Singapore, the UAE or Panama will open EU branches quickly, citing concerns about regulatory stability and the potential for additional requirements such as minimum capital or asset‑under‑management thresholds.
Options for EU residents
- Maintain existing accounts – Contracts opened before the 11 July 2026 grandfathering date are protected; altering or renewing them could be treated as new business.
- Use reverse solicitation – An EU resident may approach a non‑EU bank on their own initiative, but the bank must retain documentation proving the unsolicited nature of the request.
- Select banks with EU presence – Choose institutions that already operate licensed EU branches or subsidiaries, or that have announced plans to do so before the 2027 deadline.
These pathways represent the primary ways EU residents can continue to access non‑EU banking services after the 2027 implementation date.
Source article: www.imidaily.com
