Financial regulation

Yes, it is possible to conduct lending or investment business through a branch of a financial institution.

Foreign-based financial institutions wishing to carry out activities in Angola through the establishment of branches are subject to the authorization of the President of the Republic, subject to the prior opinion of the BNA.

Yes.

Foreign companies wishing to carry on business in Australia through a branch need to register as a foreign company with ASIC. To apply, a company must lodge an application form with ASIC, along with certified copies of the company's certificate of registration and constituent documents.

To be registered, the foreign company must have a registered office in Australia and a local agent to act on its behalf.

Registered foreign companies are required to lodge annual financial statements with ASIC and comply with certain notice obligations. The local agent will be responsible for acts, matters and things that the company is required to do under the Corporations Act 2001 (Cth) and may be held personally liable for any penalties imposed should a company contravene the Corporations Act 2001 (Cth).

Australia is in the process of transitioning to a new licensing framework for foreign financial service providers with Australian wholesale clients. ASIC has issued Consultation Paper 301: Foreign financial service providers (June 2018) and Consultation Paper 315: Foreign financial service providers: Further consultation (July 2019). The new regime is expected to commence on 1 April 2020, alongside transitional arrangements.

Yes.

To the extent that it concerns activities subject to mutual recognition, European Economic Area (EEA) credit institutions and other financial institutions authorized to offer such activities in their home member state, can start these activities in Belgium, either under the freedom to provide services or via the establishment of a branch.

Non EEA entities need to be authorized to conduct regulated lending or investment business through a branch or establishment.

Foreign companies carrying on a trade in Belgium through a ‘permanent establishment’ or ‘Belgian establishment’ will be subject to Belgian corporation tax.

Yes, with the approval of the Central Bank of Brazil and other approvals, as the case may be (eg the approval of the President in the case of foreign investment).

Yes.

A non-Canadian entity may conduct business in Canada through a branch office of the non-Canadian entity. The non-Canadian entity will be required to register (with the appropriate authority) as an extra-provincial entity in each province where it carries on business.

Foreign companies can also act in Chile through a branch or agency, which is to be considered as the foreigner itself and not as a different entity, so as a consequence, rights and/or obligations of the branch in Chile are deemed to be rights and obligations of the foreign entity.

Foreign banks operating in Chile will enjoy the same rights that national banks of equal category and will be subject in general to same laws and regulations, unless it is provided otherwise.

Pursuant to the General Banking Law, the CMF may authorize foreign banks to maintain representations that act as business agents of their parent companies and will have over them the same inspection powers that such law confers on the banking companies.

Under Law 1328 of 2009, foreign banks, as of 15 July 2013, are permitted to operate through their ‘branches’ and are not obligated to incorporate a Colombian subsidiary. Operations through these branches will be subject to prior approval by the Superintendency of Finance. Among other legal requirements, branches have to meet the same minimum capital requirements as independent entities do.

Yes.

A company can conduct lending or investment business in the Czech Republic through a registered establishment (also known as a branch). The foreign entity operating in the Czech Republic through its branch is considered to be a financial institution and generally must deliver to the Czech National Bank (CNB) relevant financial information (on a periodic basis).

Anyone permanently engaged in banking or financial services can be required to obtain the relevant license from the CNB. Institutions granted a banking license in any EU member state can operate in the Czech Republic on the basis of a European passport.

Yes, provided however, that if the company conducts any authorized activities it must be authorized in another EEA country.

A company can conduct lending or investment business in Finland through a branch but this does not create a separate legal entity. The foreign trader must submit a start-up notification concerning its branch to the Finnish Patent and Registration Office before the branch commences its operations. If the business to be conducted and the services to be provided are regulated activities (i.e. it is a branch to a credit institution, insurance company, investment company or management company) then the Finnish Financial Supervisory Authority (FIN-FSA) must also be notified.

If the trader is from a country outside the EEA, it will also need a permit from the Finnish Patent and Registration Office, as well as the FIN-FSA for the establishment of the branch.

It is possible to conduct lending or investment business through a branch of an authorised European regulated entity or from an authorised European regulated entity without any physical presence in France through the so-called 'European passport'.

Overseas companies having a French branch may conduct lending business in France subject to an authorization granted by the Prudential and Resolution Supervisory Authority (Autorité de contrôle prudentiel et de résolution) (ACPR) and compliance with specific prudential and regulatory requirements.

Yes.

Firms authorized by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)) in Germany can establish branches in Germany.

Certain firms that are authorized in other EEA-member states may rely on the European passport regime when establishing a branch in Germany.

Yes. A company can conduct lending or investment business through a branch, or in the case of a company incorporated outside Ghana (external company), through an established place of business registered under the Companies Act, 2019 (Act 992). 

An external company is subject to the licensing requirements of the banking and securities industry laws and has tax liability under Ghana law.

Yes.

A company can conduct lending or investment business in Hungary through an establishment (also known as a ‘branch‘) but this does not create a separate legal entity.

Overseas companies having an establishment in Hungary need to comply with the Act CXXXII of 1997 on Hungarian Branch Offices and Commercial Representative Offices of Foreign Companies.

Overseas companies carrying on a trade in Hungary through a ‘permanent establishment‘ will be subject to Hungarian corporation tax.

Yes. A foreign company seeking to conduct lending or investment business in Ireland can do so through a branch or establishment. Any company which is incorporated outside Ireland and establishes a branch in Ireland must be registered within one month of its establishment with the Companies Registration Office under the Companies Act 2014 and must comply with certain ongoing disclosure and other requirements prescribed by that Act. There are some differences between the requirements imposed on a company from a Member State of the European Economic Area and companies from third countries.

Whether or not a foreign company can be deemed to have established a branch in Ireland is dependent on a number of factors, including whether that company has an independent Irish management structure, a reasonable degree of financial independence and the appearance of permanency.

Yes.

A company can conduct lending business in Italy through an establishment (also known as a 'branch').

Companies having an Italian establishment need to follow a notification procedure before starting their operations in Italy.

As regards funds, following the Undertakings for Collective Investment in Transferable Securities (UCITS) directives and Alternative Investment Fund Managers (AIFM) directive implementation, EU asset management companies can carry out their activity in Italy on the basis of 'passports'. In particular, the EU asset management companies can set up and manage Italian alternative investment funds both under an establishment regime and under freedom to provide service regime and can offer in Italy their funds on a cross-border basis.

Yes, it is possible to conduct lending or investment business through a branch or establishment in Ivory Coast.

A company can conduct lending or investment business in Ivory Coast through an establishment (also known as a branch), but the entity must be incorporated as a public limited company during the registration process with the trade register.

Furthermore, overseas companies carrying on a trade in Ivory Coast through a permanent establishment will be subject to Ivory Coast corporation tax.

Lending business

Yes, a foreign-established company may conduct lending business through a branch registered in Japan.

Investment business

Yes, a foreign-established company may conduct investment business through a branch registered in Japan.

Yes, it is possible to conduct lending or investment activities through a branch in Luxembourg.

Branch means ‘a place of business other than the head office which is a part of a credit institution or an investment firm, which has no legal personality and which performs directly, entirely or in part transactions related to the activity of credit institutions or provides investment services and/or activities and which may also perform ancillary services for which the investment firm has been authorized.’

The exercise of these activities by a branch of a credit institution or investment firm authorized in another member state is not subject to authorization by the Luxembourg authorities provided that these activities fulfil the requirements laid down in article 30 of the Law of 5 April 1993 on the financial sector, as amended from time to time.

Credit institutions and investment firms governed by a non-member state and wishing to establish a branch in Luxembourg are subject to the same authorization rules as those applying to credit institutions and other professionals of the financial sector governed by Luxembourg law.

Foreign companies performing activities in Luxembourg, which lead to the creation of a permanent establishment, may be subject to tax on income attributable to such a permanent establishment.

Yes. 

A company can conduct lending or investment business in Mauritius through a branch but this does not create a separate legal entity. 

Foreign companies with a branch in Mauritius need to comply with Part XXII of the Companies Act 2001, which imposes registration, accounting, disclosure, appointment of local agents and other requirements. Such requirements apply only to body corporates. Foreign companies with a place of business or those carrying on business in Mauritius through a permanent establishment will be subject to tax in Mauritius.

Foreign lenders are able to conduct lending activities in Mexico through a branch or office outside of Mexico.

Foreign financial institutions may conduct lending or investment business by establishing in Mexico affiliates of foreign financial institutions.

Foreign financial institutions may also establish a representative office in Mexico through which they may perform a limited list of activities, including informing and negotiating the terms and conditions of loans and investments to be made by foreign financial institutions. Specific prohibitions are applicable to representative offices such as undertaking any financial intermediation that would require authorization from the Mexican government or acting in transactions that imply the receipt of funds or investments from the public.

Credit institutions headquartered abroad may apply for the establishment of a subsidiary or the opening of branch in Morocco.

Yes

Financial entities that have obtained an EEA authorization to perform lending (e.g. banks) or investment activities could, in principle, passport their EEA authorization into the Netherlands and consequently perform the activities in the Netherlands through a branch office or as a cross-border service (ie without branch office).

A branch office:

• is a member of a financial entity that has its registered office in an EEA member state other than the Netherlands;
• does not have separate legal personality; and
• permanently exists in the Netherlands.

It should be noted that, depending on the business activities, a branch may qualify as a ‘permanent establishment’ and therefore may be subject to Dutch taxation.

Moreover, depending on the offered services, branch offices (or cross-border service providers) may be subject to certain code of conduct requirements as laid down in the Civil Code (Burgerlijk Wetboek) and the Financial Supervision Act (Wet op het financieel toezicht).  

Yes.

Overseas companies can register branches of their companies in New Zealand. Consent may be required from the Overseas Investment Office (OIO) if the business involves the acquisition of a 'significant business assets' or 'sensitive land' in New Zealand.

Standard compliance requirements will apply to the branches.

Any reporting entity under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act) must ensure its branches in a foreign country comply. Failing to ensure branches and subsidiaries comply with the AML/CFT Act could result in civil liability.

Specific tax rules apply to loans made by or to a New Zealand branch.

Yes.

Foreign lenders may conduct business in Norway by establishing Norwegian representative offices (NUF) subsidiaries and have these apply for authorization from the Norwegian Financial Supervisory Authority. Credit institutions, insurance companies, pension funds, payment institutions and electronic money institutions that are seated and authorized in another European Economic Area state may passport the licenses from their home jurisdiction to Norway and conduct business in Norway without getting a separate license here.

Yes, it is.

Legally, a company can conduct lending or investment business in Peru through an establishment (also known as a ‘branch’). The procedure for a company to request a license to operate a branch in Peru is regulated in Section 18 of Resolution SBS 10440-2008.

Foreign companies having a Peruvian establishment need to comply with the procedures for establishing a banking or financial entity, and are obliged to request an authorization from the SBS and, when applicable, the Central Reserve Bank of Peru. However, the supervision model of the SBS has been primarily developed to control and supervise subsidiaries but not branches. To date, there are no branches of foreign banking or financial institutions operating in Peru.

Unless otherwise expressly provided for by specific laws or an international convention, foreign companies carrying on a trade in Peru through a ‘permanent establishment’ will be subject to Peru’s corporation tax.

Yes.

A foreign company can conduct lending or investment business in Poland through a branch office (oddział), but this does not create a separate legal entity.

The branch office's scope of activity must be exactly the same as that of the foreign company's.

Opening a branch office through which a regulated activity will be carried out requires regulatory authorization, as in the case of a branch office of a bank. A credit institution with its registered office in the EU is exempted from this requirement and may start operating through a branch office or on cross-border basis following a notification to the Polish Financial Supervision Authority.

Another possibility for a financial institution to conduct business in Poland involves setting up a representative office (przedstawicielstwo). As with a branch office, a representative office is not a separate legal entity. However, the only activities that may be carried out by a representative office are the promotion and marketing of a foreign company.

Yes, a firm can conduct lending or investment business in Portugal through an establishment or a branch. A firm operating through an establishment or a branch will not have separate legal personality.

EU firms must notify the relevant regulator prior to establishing a branch while non-EU firms require prior authorization from the relevant regulator.

In relation to some specific activities as follows.

Credit institution, financial firm, payment institution and e-money institution

The establishment of a branch in Portugal of an EU firm is subject to prior notification by the competent regulation in the firm's home member state to the Bank of Portugal. The branches of such firms may only carry on activities in Portugal for which they have been authorized in their home member state. The establishment of a branch in Portugal of non-EU firms is subject to prior authorization by the Bank of Portugal.

Insurance and reinsurance activities

The establishment of a branch in Portugal of an EU insurance firm requires prior communication between the supervising authority in the firm's home member state and the Portuguese Insurance and Pensions Funds Supervising Authority. Non-EU insurance and reinsurance firms must obtain the prior authorization of the Portuguese Insurance and Pensions Funds Supervising Authority before establishing a branch in Portugal.

Insurance and reinsurance mediation activities

An insurance or reinsurance mediator registered in another EU member state can operate in Portugal one month after confirmation from the competent authority of its home country that it has notified the Portuguese Insurance and Pensions Funds Supervising Authority of the mediator’s intention to operate in Portugal. Non-EU insurance or reinsurance mediators must obtain the prior authorization the Portuguese Insurance and Pensions Funds Supervising Authority.

Yes.

However, the branch or establishment will need the appropriate licenses to conduct business in Puerto Rico.

Yes.

Lending and/or financial investment services may be performed in Romania on a professional basis by, inter alios:

• credit institutions (or payment services providers) and investment firms, respectively, which are licensed in an European Economic Area member state to perform lending/financial investment services and which carry out such services in Romania either:
  • directly (under the freedom to provide services); or
  • by way of establishment of a Romanian branch (under the freedom of establishment) based on a (banking) license obtained in their home member state, without the need to obtain a (banking) license in Romania (they are, however, subject to performing certain administrative formalities (the so called 'passporting' formalities)); and
• Romanian branches of non-European Economic Area member states licensed (credit) institutions (to the extent the Romanian branches were licensed in Romania by the National Bank of Romania or the Financial Supervisory Authority, respectively).

In Russia it is possible to establish a representative office or a branch. Both are separate divisions of a legal entity and do not create a separate legal personality.

Representative offices are not allowed to undertake commercial activity under the Civil Code of the Russian Federation. Instead, their main purpose is generally to promote commercial relations between the legal entity which they represent and Russian enterprises, and to gather information about the Russian market. Branches may undertake commercial activity, including lending or investment business, and fulfil all or part of the functions of its founding legal entity, provided the founding legal entity is authorized to carry out such activities.

However, foreign legal entities and their representative offices and branches cannot perform activities of non-credit finance organizations including activities of professional participants on the securities market, offer services of foreign legal entities on the financial markets or distribute information about such entities and their activities to the general public in the territory of Russia.

In relation to foreign credit organizations, in Russia it is only possible to establish representative offices of such foreign credit organizations (including banks); branches are not allowed. As mentioned above, representative offices cannot perform commercial activities.

It is possible to conduct lending or investment business through a branch or establishment in Senegal. Such a possibility is, however, subject to restrictions.

The branch shall not have a separate legal personality distinct from that of the parent company or the natural person who owns it (Article 117 of the AUSCGIE).

The branch may be an establishment of a foreign company or natural person.

Subject to international agreements or laws to the contrary, the branch shall be governed by the law of the State Party in which it is located. (Article 118). It shall be registered in the Trade and Personal Property Rights Register in accordance with the provisions organizing said register.

Where the branch is owned by an entity, it shall be attached to a company in existence or to be created, governed by the laws of one of the State Parties not later than two years after the branch is set up, unless this obligation is waived by order of the minister in charge of trade in the State Party in which the branch is located. (Article 120).

A branch office without a separate legal identity from that of its parent company may be registered in Singapore, which may conduct any business activities conducted by its parent company. The branch office must have the same name as its parent company and it must comply with the Companies Act, for example provisions requiring the branch office to have its registered office address in Singapore and to appoint an authorized representative who is ordinarily resident in Singapore. Approval of the Monetary Authority of Singapore may be required in certain circumstances. For applicants that are incorporated in a foreign country, they should satisfy the Monetary Authority of Singapore that the branch in Singapore would be subject to proper management oversight and be able to comply with all laws and regulations governing its operations.

Alternatively, a subsidiary private limited company may be incorporated in Singapore with a legal identity separate from its parent company.

Yes.

A company can conduct lending or investment business in Slovakia through an establishment (also known as a ‘branch’) but this does not create a separate legal entity.

The branch office of a foreign company does not have a separate legal personality from its parent company, but has its own management (director of a branch), accounting and tax requirements. It must be registered in the Slovak Commercial Registry, although liability for the operations of the branch remains with the parent.

Overseas companies carrying on a trade in Slovakia through a ‘permanent establishment’ will be subject to Slovak corporation tax.

Yes. International banks can operate in South Africa as either a representative office or a branch with the approval of the Registrar of Banks. Non-banking foreign companies may also establish branches in South Africa in accordance with the Companies Act. As set out above, registration may be required as an 'external company' as contemplated in section 23(2) of the Companies Act.

Yes.

A company can conduct lending or investment business in Spain through an establishment (also known as a ‘branch’) but this does not create a separate legal entity.

Foreign companies having a Spanish branch need to be passported (if EU based) or authorized (if non-EU based) if they intend to conduct regulated activities. In addition, Spanish branches of foreign companies need to be registered with the Commercial Registry and with the Bank of Spain registry or the Comisión Nacional del Mercado de Valores (Spanish Securities and Exchange Commission, CNMV) registry. The Bank of Spain's registry is in charge of registering Spanish branches of foreign credit institutions and payment services and e-money firms. The CNMV's registry is in charge of registering Spanish branches of foreign investment firms and fund managers.

Foreign companies carrying on activities in Spain through a ‘permanent establishment’ will be subject to Spanish corporation tax.

Yes.

A company can conduct lending or investment business in Sweden through an establishment/branch (filial). An establishment/branch is not a separate legal entity.

Overseas companies that have a Swedish establishment/branch need to comply with Swedish legislation which imposes registration, accounting, disclosure and other requirements. Overseas companies also need authorization by the Swedish Financial Supervisory Authority (Finansinspektionen).

Overseas companies carrying on a trade in Sweden through a ‘permanent establishment’ will be subject to Swedish corporation tax.

Yes.

In the context of banks, a branch of foreign commercial bank is considered as Commercial bank under the Financial Institution Act B.E. 2551 (2008). Therefore, if such branch is duly granted with approval from the BOT, it will be allowed to operate banking business in Thailand, including lending and investment activities.  

In case of non-banks side, an establishment in Thailand (ie as a private limited company or public limited company) is able to conduct the lending or investment business in Thailand. If the entity in question is a foreign majority owned company, a foreign business license/certificate is needed to be granted by the MOC. Besides, if any lending and/or investment activities is by its natures regulated by the BOT (ie personal loan and nano finance) or the Fiscal Policy Office (FPO) under the MOF (ie pico finance) then approval from the BOT and/or FPO (as applicable) must be obtained.

For the purpose of the above:

• 'Commercial bank’ means a public limited company approved to operate commercial bank business, a retail bank, a commercial bank which is a subsidiary of foreign commercial bank and a branch of foreign commercial bank being approved to operate commercial bank business in Thailand.
• ‘Credit foncier company’ means a public limited company being approved to operate credit fonder business
• ‘Finance company’ means a public limited company approved to operate finance business.
• ‘Financial institution’ means a commercial bank, a finance company and a credit foncier company.
• ‘Personal loan’ means (i) lending, purchasing, discounting or rediscounting bills or any negotiable instruments to natural person, either with or without purpose to obtain goods or services; and (ii) lending with purpose of doing business. Currently, the personal loan regulated by BOT are the unsecured personal loan, ie without collateral, which shall include (i) and the financing on hire purchase or leasing of goods, except cars and motorcycles, that are not sold by the personal loan operator in ordinary course of business, except vehicles and (ii) the financing secured by vehicle plates. Nevertheless, the regulated personal loan shall exclude loans provided for (i) education, (ii) traveling in respect of overseas employment, (iii) medical treatment, (iv) staff welfare where the employer has signed contract with the personal loan operator and (v) others as prescribed by BOT.
• ‘Nano finance’ means lending, purchasing, discounting or rediscounting bills or any negotiable instruments, hire-purchase, leasing to natural person with the purpose of doing business without assets or property as collateral. Currently, the regulated nano finance is defined as nano finance with the purpose to do business with the lending procedure flexible in line with the criteria of debtors’ group, eg start-up business. The credit limit for each debtor must not exceed THB 100,000 with the credit period as agreed between debtor and nano finance operator. Nevertheless, regulated nano finance shall exclude (i) hire-purchase and sale and lease back of car and motorcycles, (ii) car for cash and motorcycles for cash, (iii) hire-purchase and lease of goods that are sold by the nano finance operators in their ordinary course of business, (iv) traveling loan in respect of overseas employment and (v) others as further prescribed by BOT.
• Pico Finance which is regulated means lending made to a natural person either with or without assets or property as collateral, at the province on which a head office of the pico finance operator is located, and calculated the maximum interest, profits from lending, fine, fees and other expenses not exceeding the interest rate permissible under CCC. The regulated pico finance shall exclude (i) traveling loan in respect of overseas employment, (ii) loan granted as staff welfare where the employer has signed contract with the pico operator and (iii) others as prescribed by FPO.

Yes.

Banks

Ukrainian law allows foreign banks to establish branches in Ukraine, however, such branches are only entitled to carry on lending and banking services upon special accreditation being given by the National Bank of Ukraine. Such branches act on behalf of foreign banks and are not deemed to be legal entities.

Funds

Unlike banks and insurance companies, foreign investment funds cannot operate in Ukraine via a branch or other permanent establishment. Ukrainian law requires that funds are incorporated in Ukraine and licensed by the National Securities and Stock Market Commission.

Yes.

A company can conduct lending or investment business in the UK through an establishment (also known as a 'branch') but this does not create a separate legal entity.

Overseas companies having a UK establishment (but which are not incorporated in the UK e.g. as a subsidiary entity) need to comply with the Overseas Companies Regulations 2009 which imposes registration, accounting, disclosure and other requirements. Such requirements do not apply to partnerships or other unincorporated entities with a similar UK presence.

Overseas companies carrying on a trade in the UK through a 'permanent establishment' will be subject to UK corporation tax.

Yes.

A company can conduct lending or investment business in the UK through an establishment (also known as a ‘branch’) but this does not create a separate legal entity.

Overseas companies having a UK establishment need to comply with the Overseas Companies Regulations 2009 which imposes registration, accounting, disclosure and other requirements. Such requirements do not apply to partnerships or other unincorporated entities with a similar UK presence.

Overseas companies carrying on a trade in the UK through a ‘permanent establishment’ will be subject to UK corporation tax.

Generally, it is not possible to engage in lending or investment activities through a branch office.

Lending

Generally, yes, subject to laws and regulations regarding branches, which vary depending on the regulator and jurisdiction.

Securities

Broker-dealers commonly operate through branch offices and, in some cases, satellite offices not treated as branch offices (including certain home offices of individual registered representatives of broker-dealers). Each such office is subject to detailed rules regarding staffing, supervision, oversight by home office, recordkeeping, signage and other matters.