From 11 January 2027 the European Union’s revised Capital Requirements Directive (CRD 6) will change how banks that are headquartered outside the EU can offer core banking services to customers who reside in EU member states.
What CRD 6 changes
- Scope – The rule applies to “third‑country” banks, i.e., institutions whose legal seat is outside the EU. Typical examples mentioned are banks based in Switzerland, the United Kingdom, the United States, Singapore, Ukraine and Georgia.
- Restricted services – Unless the foreign bank has an authorized branch or subsidiary established in an EU member state, it may no longer provide the following to EU‑resident clients:
- Deposit‑taking (including current and savings accounts)
- Lending (personal, mortgage or commercial credit)
- Guarantees and other credit commitments
- No ban on ownership – Existing foreign accounts do not become illegal. The regulation only limits the ability of the foreign institution to service EU clients from abroad.
Why the EU is introducing the rule
The EU has expressed concern that a growing number of residents are opening accounts in jurisdictions that are perceived as tax‑friendly or politically stable. By requiring a physical EU presence, regulators aim to:
- Increase transparency and supervisory oversight of cross‑border banking activities.
- Reduce “capital flight” that can limit the availability of risk capital for EU startups in sectors such as quantum computing, artificial intelligence and biotech.
What EU residents should do now
- Check your bank’s EU status – Contact the institution to confirm whether it operates an authorized EU branch or subsidiary.
- Assess service continuity – If the bank lacks an EU presence, determine which services (e.g., withdrawals, loan applications) may be discontinued after the transition date.
- Consider alternatives –
- Move core banking activities (salary deposits, regular payments) to an EU‑licensed bank.
- Keep foreign accounts for ancillary purposes (e.g., diversification, travel) but be prepared for reduced functionality.
- Monitor compliance deadlines – The restriction takes effect on 11 January 2027; banks may seek to obtain EU authorisation before that date, but the process can be lengthy.
Risks and caveats
- Service disruption – Even if a foreign bank eventually obtains an EU licence, there may be a transition period during which certain products are unavailable.
- Regulatory uncertainty – The EU may introduce further measures aimed at curbing capital outflows, potentially affecting tax treatment or reporting obligations for foreign‑held assets.
- Bank‑specific variation – Not all non‑EU banks will be equally affected; some already maintain EU subsidiaries (e.g., major Swiss banks) and will continue offering full services.
In summary, CRD 6 does not force EU residents to close foreign accounts, but it will limit the ability of many non‑EU banks to provide core banking services to EU clients unless they establish a regulated presence within the bloc. Residents should verify their banks’ compliance status and plan for alternative arrangements where necessary.
