How UK investment firms can provide services across Central Europe after Brexit – including Germany, Austria, Switzerland, Poland, the Czech Republic and more.
Five years after Brexit, UK FCA-authorised firms remain third-country firms under EU financial services law. Despite continued regulatory dialogue between the UK and EU, there is still no passporting regime and no EU-wide equivalence decision allowing UK investment firms to provide services freely across Member States.
Instead, firms must assess market access on a country-by-country basis. The key questions remain the same:
- Is a local branch required?
- Can professional clients be served cross-border?
- When can reverse solicitation be relied upon?
- Have recent regulatory reforms changed the position?
While the overall framework remains largely unchanged, developments during 2025 and 2026—including CRD VI, the UK–Switzerland Berne Financial Services Agreement (BFSA) and wider UK regulatory reforms—have created new compliance considerations for firms operating across Europe.
The Post-Brexit Framework
We reviewed the post-Brexit framework in an article dated January 2025. Without passporting, UK firms cannot rely on a single EU authorisation to provide investment services throughout the bloc. Instead, access is governed by three key principles.
- MiFID II branch requirements. Individual Member States decide whether third-country firms must establish a local branch before serving retail or opted-up professional clients. As a result, the rules differ significantly across Europe.
- Professional client business. In theory, MiFIR provides a cross-border regime for services to per se professional clients and eligible counterparties. However, because the UK has not received an EU equivalence decision, this route is currently unavailable. Professional business therefore depends on national law.
- Reverse solicitation. UK firms may provide services where an EU client approaches them entirely on their own initiative. However, regulators have made clear that this exception is narrow. Marketing, targeted advertising or expanding the relationship beyond the client’s original request can invalidate reliance on reverse solicitation.
Key Regulatory Developments since January 2025
- CRD VI
The most significant EU reform is CRD VI, which introduces a harmonised branch requirement for third-country firms providing core banking services such as lending, deposits and guarantees.
Importantly, most MiFID investment services remain outside the new regime. Nevertheless, UK banking groups with cross-border lending activities should review their structures before the new rules apply from January 2027.
- Switzerland Becomes an Exception
Unlike the EU, Switzerland has introduced a dedicated access regime through the Berne Financial Services Agreement, which entered into force on 1 January 2026.
The Agreement allows eligible UK firms to provide certain wholesale and professional financial services into Switzerland through a registration process rather than establishing a local authorised entity.
For many UK firms, Switzerland is now the most accessible European market for wholesale business.
- No Return of Passporting
Despite renewed UK-EU cooperation, there remains no proposal to restore passporting or introduce a comprehensive market-access agreement for investment services.
Firms should therefore continue planning on the basis that market access will remain governed by national rules for the foreseeable future.
Cross-Border Access Across Central Europe
Although every jurisdiction applies its own legislation, several broad trends emerge.
- Retail business generally requires a locally authorised branch or subsidiary.
- Professional client business is more flexible but still governed by national law.
- Reverse solicitation is recognised throughout Europe but interpreted restrictively.
- Switzerland now offers the clearest route for UK wholesale firms.
| Country | Retail Clients | Professional Clients | Practical Position |
| Germany | Branch generally required | Limited exemptions | One of the strictest jurisdictions |
| Austria | Branch usually required | Case-by-case analysis | Similar approach to Germany |
| Switzerland | Separate regime | BFSA registration available | Most favourable market for UK firms |
| Liechtenstein | National rules apply | More flexible | EEA framework but UK remains third country |
| Poland | Branch required | Reverse solicitation limited | Strict licensing regime |
| Czech Republic | Branch required | Cross-border possible | Active regulatory supervision |
| Slovakia | Branch required | National rules | Conservative approach |
| Hungary | Branch required | Professional business possible | Useful private placement regime for funds |
| Slovenia | Branch required | Limited cross-border | Small but harmonised market |
| Croatia | Branch required | National rules | Standard MiFID II framework |
Practical Considerations for UK FCA-Authorised Firms
While the legal position varies between jurisdictions, several practical themes apply across almost all EU markets.
- Classify Clients Correctly
Whether a client is retail, elective professional or per se professional is often the deciding factor in whether services can be provided without establishing a local branch. Firms should ensure client classifications are documented and reviewed before undertaking cross-border activity.
- Treat Reverse Solicitation with Caution
Reverse solicitation remains a valid legal concept but should not be used as a market-entry strategy. Regulators expect firms to demonstrate that the client initiated contact independently and that no prior marketing or targeted outreach occurred. Maintaining clear records of first contact is essential.
- Review Banking Activities Ahead of CRD VI
Although most MiFID investment services remain outside the scope of CRD VI, firms providing lending, deposit-taking or guarantees into the EU should assess whether a local branch or subsidiary will be required before the new regime takes effect in January 2027.
- Consider Switzerland Separately
Switzerland should no longer be grouped with EU jurisdictions when planning cross-border business. The Berne Financial Services Agreement provides a unique registration-based route for wholesale and professional business that is currently unavailable anywhere else in Europe.
- Monitor Ongoing Regulatory Change
The regulatory landscape continues to evolve. UK operational resilience requirements, EU implementation of CRD VI and wider reforms such as DORA and EMIR 3 may not change market access directly, but they can affect compliance obligations for firms operating across multiple jurisdictions.
Frequently Asked Questions
Can a UK FCA-authorised firm provide investment services in the EU?
Yes, but access depends on the laws of each Member State. There is no EU-wide passport or equivalence regime for UK investment firms.
Can UK firms serve retail clients in Europe?
In most cases, no. Retail business generally requires a locally authorised branch or subsidiary.
What is reverse solicitation?
Reverse solicitation allows a UK firm to provide services where an EU client approaches the firm entirely on their own initiative. Regulators interpret this exception narrowly, particularly where marketing or ongoing client development is involved.
Does CRD VI affect investment firms?
Generally, no. CRD VI primarily affects third-country firms providing core banking services such as lending and deposit-taking. Most MiFID investment services are expressly excluded.
Why is Switzerland different?
The UK–Switzerland Berne Financial Services Agreement, effective from January 2026, provides a dedicated registration route allowing eligible UK firms to offer certain wholesale and professional financial services without establishing a local authorised entity.
Key Takeaways
For UK FCA-authorised firms, Brexit has fundamentally changed how financial services are delivered into Europe. Rather than relying on passporting, firms must assess market access country by country, taking account of local licensing requirements, client classification rules and the limited scope of reverse solicitation.
While there has been no return to EU-wide market access, recent reforms have reshaped the landscape. CRD VI introduces a new framework for third-country banking services, while the Berne Financial Services Agreement makes Switzerland the most accessible European market for many UK wholesale firms.
Firms planning to expand across Central Europe should therefore adopt a jurisdiction-specific compliance strategy rather than assuming a uniform approach across the region.
If you are considering launching a new business which requires regulatory coverage or wonder how said coverage might interact with post-Brexit uncertainty, reach out to us today for a free consultation.
