One story has been circulating for weeks: that the European Union quietly banned offshore banking through the CRD VI directive and is drawing an iron curtain around the European financial system. The legal act exists, the date is right, and the effect on the market is real. The text, however, says something different from the warnings. This article reads Article 21c paragraph by paragraph — the obligation, the four exemptions, the cut-off for existing contracts — and separates what the directive orders from what banks conclude from it for themselves. Those are not the same thing, and the difference decides what you should do now.
What the law says — and who actually appears in it
Directive (EU) 2024/1619 was published in the Official Journal on 19 June 2024 and entered into force on 9 July 2024. It amends the Banking Directive 2013/36/EU and inserts a new Article 21c, whose first paragraph reads:
“Member States shall require undertakings established in a third country as referred to in Article 47 to establish a branch in their territory and apply for authorisation in accordance with Title VI to commence or continue carrying out the activities referred to in Article 47(1) in the relevant Member State.”
Read that sentence for its addressee. The obligation binds the undertaking established in a third country — the bank in Zurich, Tbilisi, Singapore. The customer does not appear in paragraph 1 at all: there is no “client resident in the Union” and no duty that would fall on a private individual. Only the exemption catalogue in paragraph 2 refers to a “client or counterparty established or situated in the Union”. That is not a formality but the heart of it: Article 21c is an authorisation rule for banks, not a prohibition addressed to citizens. No provision of the directive prohibits an EU resident from holding, using or opening an account abroad.
Nor is all banking business caught, but only what recital 5 calls “core banking services”: points 1, 2 and 6 of Annex I to Directive 2013/36/EU — taking deposits and other repayable funds, lending, and guarantees and commitments. The annex lists fifteen activities. Twelve are not caught, among them payment services (point 4), electronic money (point 15) and the safekeeping and administration of securities (point 12).
Within the three activities that are caught, an asymmetry is routinely overlooked. Article 47(1) distinguishes:
- Deposit-taking (Annex I, point 1) — caught for any third-country undertaking Art. 47(1)(b): "the activity referred to in point 1 of Annex I to this Directive by an undertaking established in a third country" — with no further condition
- Lending and guarantees (Annex I, points 2 and 6) — only where the undertaking would qualify as a credit institution Art. 47(1)(a) catches only undertakings that would qualify as a credit institution or meet the criteria in Art. 4(1)(1)(b) CRR — pure non-bank lenders fall outside
- Payment services, e-money, securities custody, leasing not within Annex I points 1, 2 and 6 and therefore outside Art. 21c — separate regimes apply under PSD2, the E-Money Directive and MiFID II
The four exemptions are in the law, not in the small print
The common account holds that the exemptions are theoretical and unreachable in practice. The text says otherwise. Article 21c(2) carves out three situations and paragraph 4 adds a fourth:
| Exemption | What the text requires | |
|---|---|---|
| The client’s own initiative (Art. 21c(2)(a)) so the exemption covers private clients in particular — not only institutional ones | The client approaches the bank "at its own exclusive initiative". Retail clients, professional clients and eligible counterparties are all expressly named. | |
| The counterparty is a credit institution (Art. 21c(2)(b)) irrelevant for retail clients, decisive for the bank’s own funding | Interbank business stays free. The wording names credit institutions only, not financial institutions generally. | |
| Intragroup business (Art. 21c(2)(c)) | Services to an undertaking of the same group as the third-country undertaking. | |
| Investment services (Art. 21c(4)) the securities account therefore sits outside Art. 21c, under the MiFID II third-country regime | All services listed in Section A of Annex I to MiFID II — together with "accommodating ancillary services, such as related deposit taking or the granting of credit or loans the purpose of which is to provide services under that Directive". |
Two clarifications belong here, and they cut in opposite directions.
In the client favour, paragraph 3 makes clear that own-initiative contact confers no right to market other categories of products — while confirming that no branch is required “for any services, activities or products necessary for, or closely related to the provision of the service, product or activity originally solicited by the client or counterparty, including where such closely related services, activities or products are provided subsequently to those originally solicited”. Someone who opened an account on their own initiative may therefore still draw on the related services later. The exemption is not a one-off event; it carries the ongoing relationship.
Against structuring, the same paragraph 2 contains an anti-circumvention rule: where the third-country bank solicits the client through an entity with close links to it or through “any other person acting on behalf of such undertaking”, the service is not treated as provided at the client’s own exclusive initiative. The initiative must be the client’s own — and the bank must be able to evidence it in its own file, since under Article 48l authorised third-country branches report their reverse-solicitation business to the supervisor.
The sentence that appears in none of the warnings
Recital 6 of the directive opens with a finding that is consistently missing from the circulating summaries:
“The consumption of banking services outside the Union, as in the context of the World Trade Organisation Understanding on commitments in financial services, is to remain unaffected.”
That is not an aside but a reference to a commitment under international trade law. The GATS framework for financial services distinguishes the cross-border supply of a service into a territory from its consumption abroad. Article 21c addresses the first. The second — you travel to Tbilisi, Zurich or Singapore and become a client there — is meant to remain untouched, on the legislator’s own statement.
That turns the central claim of the excitement on its head. What becomes subject to authorisation is not the foreign account but the unlicensed selling of core banking services into the single market. For an EU resident acting on their own motion, the directive expressly names two open routes: own initiative and consumption on site.
Where the tightening is real
That is not the end of it, because the practical effect the warnings describe does exist. It simply arises somewhere else — in the bank cost calculation.
A third-country bank taking the regular route must establish a branch and have it authorised. Three provisions of the new Title VI show what that means:
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Capital endowment: a EUR 10 million floor, held in escrow
Article 48e requires class 1 branches to hold at all times at least 2.5 percent of average liabilities over the three preceding reporting periods, subject to a minimum of EUR 10 million; for class 2 branches it is 0.5 percent, minimum EUR 5 million. Those assets must be deposited in an escrow account with a non-group credit institution in the Member State of authorisation, or with its central bank — so the bank cannot use them.
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Retail deposits push a branch into the stricter class
Under Article 48a a branch falls into class 1 where, among other things, its booked assets reach EUR 5 billion — or where it takes retail deposits exceeding 5 percent of its liabilities or EUR 50 million. The retail business at the centre of this debate is precisely what triggers the harder requirements.
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No passporting — authorisation stops at the national border
Article 48c(4)(d) requires that the authorisation confine the activities to the Member State of establishment and "expressly prohibits" offering them cross-border in other Member States — save for intragroup funding transactions and business based on reverse solicitation under Article 21c. A branch in Frankfurt therefore opens neither the French nor the Spanish market, and crossing that line risks an order to seek authorisation as a subsidiary.
Work that through from the perspective of a mid-sized bank in Zurich, Tbilisi or Panama City with a few hundred private clients resident in the EU: the regular route costs a double-digit million sum in tied-up capital, per Member State. The second option is to rely on the exemptions, document every relationship individually and evidence it to a supervisor if asked. The third is the cheapest — give up the client segment.
That is exactly the process the warnings describe as a “ban”. It is real, but it is a commercial decision by the bank, not a legal consequence of the directive. The distinction matters in practice: a prohibition applies to everyone alike, while a cost decision comes out differently from house to house — by size, client mix, risk appetite and by how well an institution has aligned its processes with the exemptions. That is why two clients in the same jurisdiction are currently experiencing very different things.
For Germany the break is smaller than it sounds
The second blind spot in the excitement is the starting position. In Germany, cross-border deposit business was never free.
Section 32(1) of the German Banking Act has always subjected the commercial conduct of banking business “in Germany” to authorisation — irrespective of where the provider sits. When a foreign institution is active in Germany is determined by BaFin guidance on the authorisation requirement for cross-border business, dated 1 April 2005 and last amended on 11 March 2019: authorisation is required where an undertaking “targets the market in Germany”. And the same guidance contains the sentence one finds again, twenty-three years later, in Article 21c(2): there is no restriction on the passive freedom to receive services, meaning the right of persons and undertakings resident in Germany to seek out a foreign provider on their own initiative.
Anyone arguing from a German perspective that CRD VI prohibits something for the first time is describing a change that happened in 2005. The prohibition is not new. What is new is that the back door is narrowing.
That back door is Section 2(5) of the Banking Act: BaFin could exempt third-country institutions from the authorisation requirement case by case where home-state supervision was adequate. The German implementing act — promulgated in the Federal Law Gazette on 30 March 2026 — changes exactly this. Section 2(5) sentence 2 now reads, in translation: BaFin must revoke existing exemptions in so far as Directive 2013/36/EU requires the establishment of a domestic branch for the business concerned.
“Must revoke” — no discretion. That is the concrete German mechanism behind the abstract European rule, and it does not target the customer but the status of the bank. It reaches only as far as the directive requires a branch, however: exemptions covering pure investment services remain untouched, because CRD VI demands no branch for those. Alongside it, the act replaces the former Section 53c with a complete regime for third-country branches in Sections 53c to 53cq. Reporting duties aside, most of it applies only from 11 January 2027, as Section 64c(5) provides.
The wave of terminations: what is evidenced and what is not
That leaves the most vivid claim: that the first termination letters from foreign banks are already landing in the letterboxes of clients in Germany, Austria, Spain and Cyprus.
We looked for them — for a letter from a named institution citing CRD VI or Article 21c as the ground for termination, for confirmation from a bank, an association or a supervisor. We found no such evidence. The claim circulates in near-identical wording and traced back, as far as we could follow it, to a commercial source that sells the service it recommends.
That is not a disproof. Account terminations for foreign clients do happen and will increase — but the documented cases run through anti-money-laundering law, sanctions lists, minimum volumes and internal country ratings, that is, through reasons that existed long before CRD VI. If you hold a letter that expressly invokes Article 21c, send it to us: we will include it here and correct this section.
What is evidenced is the following — and it paints a different picture from the cloak-and-dagger operation:
- 19 June 2024
Publication in the Official Journal
Directive (EU) 2024/1619; entry into force on 9 July 2024. The legislative process ran in public from the 2021 Commission proposal onwards — banking associations were filing critical responses as early as 2022.
- 23 July 2025
EBA report under Art. 21c(6)
The European Banking Authority examines, on a statutory mandate, whether further financial undertakings should be exempted from the branch requirement, and recommends no widening of the exemptions.
- September 2025
Joint position paper by seven banking associations
UK Finance and six other international associations criticise the inconsistent national transposition of Article 21c and call for faithful implementation. The dispute is not being conducted in secret but in published position papers.
- 30 March 2026
German transposition in the Federal Law Gazette
The implementing act promulgates the new Sections 53c to 53cq of the Banking Act and the revocation duty in Section 2(5) sentence 2. Core parts enter into force on 1 April 2026, with application phased thereafter.
- 7 July 2026
EBA guidelines on authorising third-country branches
Published in final form, applicable from 11 January 2027. They confirm expressly that third-country branches hold no passporting rights.
- 11 January 2027
Start of application
From that day the branch requirement in Article 21c applies — to new business that does not fall within one of the four exemptions.
One side note that the warnings regularly get wrong: for the European Economic Area, CRD VI is not a third-country matter. The EEA Joint Committee incorporated it into Annex IX (Financial services) to the EEA Agreement by Decision No 90/2026 of 20 March 2026 (OJ L, 2026/1293, 25.6.2026); entry into force was still pending notification at the time of writing. Liechtenstein, Norway and Iceland therefore transpose the directive themselves rather than falling under Article 21c.
The same sentence runs the other way, however: for residents of those states the new regime bites exactly as it does for residents of the Union. An address in Vaduz does not solve the problem — it moves it by one border.
The alleged motive — and what the recitals say
The second part of the story holds that the true aim is physical access to citizens’ assets: only money in an EU-regulated bank can later be collected through bail-in, special levies or an asset register. Three sober observations.
First, what the directive gives as its reason. Recital 5 justifies Article 21c by the need for an “explicit and harmonised authorisation requirement in Union law” for core banking services. Recital 17 cites, for the branch regime as a whole, the absence of Union standards, fragmented national requirements and missing supervisory tools. That is classic single-market harmonisation logic. You need not find it appealing — but it is what stands there, and access to private assets does not.
Second, Brexit does not appear. The widespread explanation that the point was to capture the City of London after its departure finds no support in the text: neither “Brexit” nor “United Kingdom” nor any reference to a Member State’s withdrawal appears in the recitals or the articles. That the United Kingdom is in practice the largest affected third country remains true. It is simply not a statement of the legislator but an interpretation.
Third, Article 21c moves no money. The provision governs who may offer core banking services in the Union. It obliges no one to relocate balances, creates no register, and changes nothing about creditor participation in a resolution — that sits in the Bank Recovery and Resolution Directive and applied before and after. Anyone wanting to discuss those risks should name them; we do so in Wealth levy: what is planned for EUR 2.8 trillion and in The digital euro: the real timetable. Merging two separate projects into one does not sharpen the analysis; it makes it attackable — and it buries the question that really does turn on residence.
A securities account is not a bank account — and payment providers are not addressed at all
Two demarcations decide more for most readers than everything above, and both sit directly in the text.
The securities account falls outside Article 21c. Paragraph 4 expressly carves out the services listed in Section A of Annex I to MiFID II — including accompanying ancillary services, “such as related deposit taking or the granting of credit or loans the purpose of which is to provide services under that Directive”. Article 47(2) repeats this for the scope of the branch regime as a whole. A securities account with a bank outside the EU is therefore governed not by CRD VI but by the MiFID II third-country regime — a separate body of rules with its own conditions, its own reverse-solicitation provision and a Member State option for retail business. Recital 6 names trading in financial instruments and private wealth management as examples — precisely the business the warnings treat as endangered.
Three clarifications, so that this does not turn into false comfort. First, the carve-out is tied to a purpose test: deposit-taking and lending are covered only where they serve the provision of the investment service, not merely because they run alongside it. Second, the MiFID II third-country regime is in no way generous: Article 39 of Directive 2014/65/EU gives Member States the option of requiring a branch for retail clients, Article 42 codifies the reverse-solicitation exemption, and branchless EU-wide access under Article 46 of Regulation (EU) No 600/2014 is open only to eligible counterparties and professional clients — and presupposes a Commission equivalence decision that, for third-country investment firms, is still outstanding. Third, ESMA made clear as early as 13 January 2021 that standard-form clauses cannot substitute for the client’s own initiative: ticking an “I agree” box during onboarding does not establish reverse solicitation. The initiative is assessed concretely for each individual service.
You can see this where brokers converted long ago: Interactive Brokers merged its Hungarian EU entity into the Irish one on 1 August 2024, and the Irish entity has carried the former accounts since. That is not a consequence of CRD VI but the older logic of securities law: whoever wants EU retail clients needs an EU entity.
Payment institutions and e-money institutions are not caught. Payment services are point 4 of Annex I, e-money is point 15 — neither belongs to the three core banking services. Providers in that category are governed by PSD2 and the E-Money Directive with their own authorisation requirements; Article 21c does not apply to them. Anyone running their payments through a payment account is simply not affected by this directive — which does not make the practical questions smaller, as Wise in Georgia sets out in detail.
Three popular escape routes — and what they actually achieve
Anyone who has read this far knows the three recommendations in circulation: move the account to a non-EU company, obtain an address outside the EU, or actually relocate. They differ not in effort but in what they solve at all.
Route 1: the account runs through a non-EU company
In regulatory terms the idea is not absurd: Article 21c ties its exemptions to a “client or counterparty established or situated in the Union”, and a company registered in Wyoming or the Seychelles is not that on the face of the register. The obligation in paragraph 1, however, attaches to the activity being carried out “in the relevant Member State”. Whether a company whose actual administration sits in Munich or Vienna shifts that connecting factor through a foreign register entry is an open question of interpretation — and it is not answered by the client but by the bank’s compliance department, which in case of doubt declines.
Two consequences, by contrast, are not open at all:
For tax purposes the register seat changes nothing. A company whose place of effective management is in Germany — the centre of senior management, determined by the factual circumstances rather than by register entries or service-provider addresses — is subject to unlimited corporate income tax there, with the attendant accounting, filing and payment duties. On top of that, the tax administration does not treat a US LLC as a corporation across the board: the Federal Ministry of Finance circular of 19 March 2004 prescribes a legal-type comparison against nine features and states expressly that the flexibility of US law rules out any general answer. What that looks like in detail is set out in A Georgian company and the German authorities and, for the controlled-foreign-company side, in Georgian LLC, German residence.
For reporting purposes the company is the look-through, not the shield. A passive investment vehicle is a passive NFE under the Common Reporting Standard. The consequence is in Section VI of the standard: if even one controlling person is resident in a reportable jurisdiction, the entire account becomes reportable — and both levels are reported, the entity and every controlling person with name, address, jurisdiction of residence, tax identification number and date and place of birth. The commentary attributes the full account balance to each controlling person, not a proportionate share. The structure does not turn an account into something invisible; it turns it into an extra line.
On top of that sits the adviser’s own reporting duty: hallmark category D in Annex IV to Directive (EU) 2018/822 (DAC6) captures arrangements that undermine CRS reporting, as well as opaque ownership chains without substantive economic activity. The main-benefit test does not apply to that hallmark — so it does not matter whether a tax advantage was the principal purpose.
Route 2: the address without a residence
This is the suggestion most often recommended and least often worked through: obtain a tax number and a utility bill from a third country so that the bank sees a non-EU client.
The Common Reporting Standard is built for exactly this case. Under Section VII an institution may not rely on a self-certification where it knows or has reason to know that it is unreliable or incorrect; the commentary applies an objective standard. The indicia list in Section III expressly names the mailing address, the telephone number, standing orders, powers of attorney and a c/o or hold-mail instruction. And since the commentary was supplemented by paragraph 3bis, the standard addresses residence and citizenship by investment schemes head-on: where doubts arise because someone claims residence in a jurisdiction operating a potentially high-risk scheme, the bank may not take the self-certification at face value.
The penalties on the client side are lower than often claimed — and the risk is nonetheless serious. The reason lies elsewhere:
| Level | What is actually at stake | |
|---|---|---|
| False self-certification, Germany the higher EUR 50,000 bracket applies to institutions, not clients | An administrative offence under Section 28(1) no. 4 of the Financial Accounts Information Exchange Act, fine up to EUR 10,000. The duty to certify completely and correctly and to notify changes within 90 days sits in Section 3a(2) and (3). | |
| False self-certification, Switzerland | A contravention under Art. 35 AIA Act, fine up to CHF 10,000; since 1 January 2026 the provision also covers failing to provide a self-certification at all. | |
| Statements to the bank no fine does not mean no consequence: under Section 10(9) the bank must not continue the relationship if it cannot discharge its due diligence duties | Section 11(6) of the Money Laundering Act obliges the customer to provide the information required for identification and to notify changes without delay. The catalogue of fines in Section 56 does not cover it — that catalogue sanctions obliged entities. | |
| The actual risk that is the difference between a four-figure fine and criminal proceedings | Section 370 of the Fiscal Code. Not because of the self-certification — a bank is not a tax authority — but because of the tax return in which the income is missing. Using a controlled third-country company to conceal it meets the standard example in Section 370(3) sentence 2 no. 6: imprisonment from six months to ten years. |
The practical objection weighs even heavier than the legal one: an address you do not live at holds exactly as long as nobody asks. It breaks the moment the bank takes the reasonableness test seriously — that is, precisely when it matters. We have described this at greater length in “Stateless” is not a solution and Perpetual traveller: counting 183 days is not enough.
Route 3: the residence that actually exists
That leaves the unspectacular route: no longer being resident in the Union. It is the only one that removes the connecting factor of Article 21c rather than obscuring it — and the only one that also resolves the questions that have nothing to do with banking supervision: the tax return, the certificate of residence, treaty protection, health insurance.
It is also the most expensive, because it demands a life decision rather than a document search. What it involves is set out in Tax residence in Georgia; what it costs in the country of origin, in Staying is not getting cheaper. Leaving is getting more expensive.
What follows from this
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First check whether your product is caught at all
Deposits, credit, guarantees — caught. Securities accounts, payment accounts, e-money, custody — not caught. That single distinction removes most of the worry before any structure is needed. It sits in Article 21c(4) and in Annex I to Directive 2013/36/EU.
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Date your existing contracts
Article 21c(5) protects contracts entered into before 11 July 2026. The cut-off attaches to conclusion of the contract, not to an expiring deadline. Put account opening documents, framework agreements and proof of dates in your files — not because you would have to show them to the bank, but because you will need them if it is ever disputed.
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Let your own initiative be your own
The exemption in paragraph 2 only holds where the approach did not originate with the bank or a person acting for it. Anyone who reaches a bank through referral chains, advertising or introduction commissions loses it. Anyone who enquires, travels and documents keeps it — including the closely related follow-on services under paragraph 3.
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Do not confuse supervisory law with tax law
CRD VI changes nothing about reporting duties. Automatic exchange of information continues unchanged, foreign accounts and income must be declared in the country of residence, and no change of account holder makes an account invisible. If you hear Article 21c invoked as an argument for a tax structure, you are hearing an argument the provision does not support.
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If residence is the problem, solve the residence
The only route that genuinely removes the connecting factor of Article 21c is the one where you are no longer a client resident in the Union. That is a life decision with tax, social-security and family consequences — not a question of an address. Anyone considering it works through the departure side first — exit taxation, health insurance, treaty protection — and only then the banking question.
The sober summary: Article 21c is real, applies from 11 January 2027, and it narrows the market. But it does not prohibit the foreign account; it makes actively selling into the Union subject to authorisation. Four exemptions sit in the enacting terms, consumption abroad is expressly left untouched by recital 6, securities and payment services are not caught at all, and contracts concluded before 11 July 2026 stand.
What will actually happen is less dramatic than an iron curtain and still unpleasant for the individual: some banks will give up EU retail clients because the documentation effort does not pay for small balances. That is a market shake-out, not an expropriation — and the answer to it is the same as it was before the directive: a banking relationship that fits your actual life situation rather than one that merely fits your address.
Frequently asked questions
Does CRD VI prohibit me, as an EU resident, from holding an account in Switzerland, Georgia or Singapore?
No. Article 21c binds only the undertaking established in a third country — the bank. Paragraph 1 imposes no obligation on a private individual, and no provision of the directive prohibits an EU resident from holding, using or opening an account abroad. Recital 6 states expressly that the consumption of banking services outside the Union — in the sense of the WTO Understanding on commitments in financial services — is to remain unaffected. What becomes subject to authorisation is selling deposit, lending and guarantee business into the Union without an authorised branch.
What happens to my existing account abroad?
Article 21c(5) provides that the branch requirement is without prejudice to existing contracts entered into before 11 July 2026, expressly in order to preserve clients' acquired rights. That date is a contract-conclusion cut-off, not an expiring grace period. Two qualifications belong with it: the directive says nothing about how amendments, extensions or novations of an old contract are to be treated, and the protection does not prevent a bank from terminating the relationship for its own commercial reasons. Regulatory grandfathering and contractual termination rights are two different things.
Does this apply to my securities account as well?
No. Article 21c(4) expressly carves out the investment services listed in Section A of Annex I to MiFID II, including accommodating ancillary services such as related deposit taking or the granting of credit. Article 47(2) repeats the carve-out for the scope of the branch regime as a whole. Securities accounts are instead governed by the MiFID II third-country regime, which has its own conditions, its own reverse-solicitation rule and a Member State option for retail business. Payment services (Annex I, point 4) and electronic money (point 15) are likewise outside Article 21c.
What exactly is reverse solicitation, and who has to evidence it?
Article 21c(2)(a) exempts services where the client approaches the third-country bank at its own exclusive initiative; retail clients, professional clients and eligible counterparties are all expressly covered. Paragraph 3 clarifies that this confers no right to market other categories of products, while confirming that no branch is required for services necessary for, or closely related to, the service originally solicited — including where they are provided subsequently. The limit is the anti-circumvention rule in paragraph 2: where the bank solicits the client through a closely linked entity or any other person acting on its behalf, there is no own exclusive initiative. The documentation burden sits with the bank, which under Article 48l reports its reverse-solicitation business to its supervisor.
What changes in Germany specifically?
Less than the warnings suggest. Section 32(1) of the German Banking Act has always subjected cross-border banking business conducted "in Germany" to authorisation, and BaFin guidance dated 1 April 2005, as amended on 11 March 2019, turns on whether a foreign undertaking targets the German market; the customer's passive freedom to seek out services abroad is expressly left untouched. The German implementing act, promulgated on 30 March 2026, therefore does not amend Section 32 but closes the escape route: under the new Section 2(5) sentence 2, BaFin must revoke existing exemptions where the directive requires a domestic branch. The new third-country branch regime in Sections 53c to 53cq applies, reporting duties aside, only from 11 January 2027.
Does holding the account through a non-EU company help?
Possibly for the regulatory connecting factor — but for nothing else, and that is precisely what gets conflated in practice. For tax, a company whose place of effective management is in Germany remains subject to unlimited German corporate income tax; a foreign register entry does not change the filing obligation. For reporting, the beneficial owner stays visible: under the Common Reporting Standard, a passive investment vehicle is treated as a passive NFE whose controlling persons are reported together with their jurisdiction of residence. And in regulatory terms it is an open question how an entity whose actual administration sits inside the Union should be treated. Building a structure solely because of Article 21c buys running costs and filing duties for a problem most people do not have.
This article is for general information and does not constitute legal or tax advice. The EU law references are to Directive (EU) 2024/1619 (OJ L, 2024/1619, 19.6.2024) — in particular recitals 5, 6 and 17 and Articles 21c, 47, 48a, 48c, 48e and 48l as inserted into Directive 2013/36/EU — together with the corrigendum to the German language version (OJ L, 2024/90708, 7.11.2024), to Annex I of Directive 2013/36/EU, to Articles 39, 41 and 42 of Directive 2014/65/EU (MiFID II) and Articles 46 and 47 of Regulation (EU) No 600/2014, and to Regulation (EU) 2025/11. The German references follow the Banking Act as amended by the implementing act promulgated on 30 March 2026 (BGBl. 2026 I No. 81), BaFin guidance of 1 April 2005 as amended on 11 March 2019, and Sections 3a and 28 of the Financial Accounts Information Exchange Act, Sections 10 and 11 of the Money Laundering Act, Sections 154 and 370 of the Fiscal Code, Section 8b of the Corporate Income Tax Act and Sections 16 and 20 of the Investment Tax Act; the Austrian references follow the Banking Act and ministerial draft 108/ME XXVIII. GP, which had not been adopted at the time of writing. Statements on self-certification follow the consolidated OECD standard (CRS) and its commentary; the Swiss references follow the AIA Act. Tax burden calculations assume a municipal trade tax multiplier of 400 percent and no church tax; they do not replace a calculation for your own case. Foreign accounts and the income from them must be declared in your country of residence. As at August 2026; subject to changes in the law.