CRD VI Article 21c: What Changes for Non-EU Banks in 2027

For European businesses with financing relationships outside the European Union, January 2027 will bring an important regulatory change.

The Sixth Capital Requirements Directive, commonly known as CRD VI (Directive (EU) 2024/1619), introduces a new framework governing how certain non-EU financial institutions may provide core banking services to clients located within EU Member States.

At the center of this framework is Article 21c.

For banks and financial institutions, the provision raises obvious regulatory and licensing questions. But its significance extends beyond the financial sector. European companies receiving financing from abroad, international groups funding European subsidiaries, businesses maintaining relationships with non-EU banks, and investors operating through structures spanning jurisdictions such as Europe, the United States, the UAE and Latin America should understand what is changing.

From a cross-border business perspective, the question is no longer simply whether a transaction is legally and commercially possible. The additional question is:

Can the non-EU institution providing the banking service legally provide that service to this European client under the new framework?

That distinction will increasingly become part of cross-border transaction planning.

What Is Article 21c of CRD VI?

Directive (EU) 2024/1619 was adopted as part of the European Union's broader reform of prudential banking regulation. Article 21c introduces a harmonized requirement concerning the provision of certain banking services in EU Member States by undertakings established in third countries, meaning jurisdictions outside the European Union.

A third-country undertaking is, broadly, an entity established outside the European Union that provides, or seeks to provide, relevant financial services to clients in an EU Member State. As a general rule, a third-country undertaking falling within the relevant CRD framework that intends to provide covered banking services in an EU Member State will be required to establish an authorized branch in that Member State, unless an exemption applies.

The policy objective is relatively straightforward. Historically, Member States have taken different approaches to third-country institutions providing banking services directly into their territories. CRD VI moves toward a more harmonized European framework. For international businesses, however, harmonization also means that some financing relationships that previously operated cross-border without an EU establishment will require closer regulatory analysis.

What Services Are We Talking About?

Article 21c must be read together with Article 47 and Annex I of the Capital Requirements Directive. The relevant "core banking services" principally include:

• Taking deposits and other repayable funds.
• Lending, which can encompass activities such as credit agreements, mortgage credit, factoring and financing of commercial transactions.
• Guarantees and commitments.

This last category deserves particular attention. International transactions frequently involve guarantees issued by foreign financial institutions, financing commitments or credit support arrangements that may not initially be perceived by the commercial parties as raising an EU market-access question. Under CRD VI, the structure of those arrangements may matter.

This Does Not Mean That Every Foreign Loan to an EU Company Becomes Prohibited

This is one of the most important distinctions businesses should understand. Article 21c should not be interpreted as a general prohibition against European companies borrowing money from outside the EU. Nor does it mean that every non-EU company lending money to a European business suddenly requires a European banking license.

The analysis begins with the nature and regulatory status of the entity providing the service. Article 21c applies to the third-country undertakings referred to under the CRD framework. Consequently, transactions involving commercial companies, private credit structures, investment vehicles, family offices, SPVs or other non-bank lenders require their own classification analysis.

In cross-border transactions, labels are rarely sufficient. Calling an agreement a "loan," "facility," "investment" or "commercial financing arrangement" does not determine its regulatory treatment. The substance of the transaction, the identity of the provider, the jurisdiction of the recipient and the activities being performed all matter.

Why European Borrowers Should Care About a Rule Directed at Foreign Institutions

At first glance, Article 21c appears to be primarily a regulatory issue for non-EU financial institutions. Commercially, however, European borrowers are very much part of the equation.

Consider a European company negotiating a significant credit facility with a bank located outside the EU. The borrower may spend months negotiating:

• Pricing.
• Security.
• Covenants.
• Guarantees.
• Conditions precedent.
• Drawdown mechanics.
• Repayment terms.

But another question now belongs near the beginning of that analysis: is the proposed lender permitted to provide this service into the relevant EU Member State?

Discovering a regulatory obstacle late in a transaction can affect closing timelines, lender selection, transaction costs and potentially the structure of the financing itself. For European businesses accustomed to sourcing capital internationally, regulatory market-access analysis therefore becomes part of transaction due diligence.

A Practical Example: Reviewing a €5 Million Cross-Border Facility

Consider a European company seeking €5 million in financing. It receives an attractive proposal from a non-EU financial institution with which its shareholders have previously done business. Commercially, the offer works: the pricing is competitive, the parties agree on security, and the lender sends the draft facility agreement.

Historically, legal review might have concentrated primarily on the financing documents, security package, corporate authority, tax consequences and enforceability. Under the emerging CRD VI environment, the analysis should begin earlier. A cross-border review should ask:

• Who is the lender? Is it an institution falling within Article 21c?
• Where is the borrower located? Which Member State's implementation of CRD VI applies?
• What service is actually being provided? Loan? Guarantee? Commitment? Investment service? Something else?
• How did the relationship originate? Could genuine reverse solicitation apply?
• Are the parties within the same corporate group? Could the intragroup exemption apply?
• Is another European regulatory regime relevant? Could the transaction fall within the MiFID carve-out or another regulatory framework?
• Is there an existing agreement predating 11 July 2026? If so, are the parties modifying it in a way that could affect the grandfathering analysis?

Only after understanding those questions can the contractual structure be evaluated properly.

Reverse Solicitation: An Important but Narrow Exception

One of Article 21c's most significant exceptions concerns what is commonly called reverse solicitation. Broadly speaking, where the European client approaches the third-country institution at its own exclusive initiative seeking the relevant service, the requirement to establish a branch may not apply.

The words "own exclusive initiative" are critical. The exception should not be treated as a contractual phrase that can simply be inserted into transaction documents after the fact. The history of the relationship matters. For example:

• Who first approached whom?
• Was the European client already being marketed to?
• Did an intermediary introduce the institution?
• Was someone acting on behalf of the foreign institution?
• What product did the client originally request?
• Was the financing part of a broader solicitation strategy directed toward European clients?

Article 21c expressly addresses attempts to circumvent the rule through persons or entities acting for, or closely connected with, the third-country undertaking. It also limits what can follow from reverse solicitation: a client's request for one category of product does not automatically authorize the institution to market unrelated categories of banking products. Services that are necessary or closely related to the service originally requested may receive different treatment, but reverse solicitation is not an unrestricted gateway into the European market.

For businesses and their advisors, this means that the factual record surrounding the origin of a cross-border banking relationship may become almost as important as the financing documents themselves.

Intragroup Financing Remains Particularly Important

International corporate groups frequently finance operations internally. A parent company may provide funding to subsidiaries. A treasury entity may centralize group financing. Companies in one jurisdiction may guarantee obligations incurred by affiliated entities elsewhere. CRD VI recognizes this reality and provides an exemption for certain intragroup transactions.

This is particularly relevant for multinational groups with European operations and financing structures located outside the EU. Consider, for example, a group with:

• A holding company outside the EU.
• A European operating subsidiary.
• Group financing arrangements across several jurisdictions.

The existence of Article 21c does not automatically mean that those arrangements must be dismantled. It does mean that group relationships, lender classification and the exact nature of the service should be properly mapped before relying on the intragroup exemption. This is also why corporate structuring and financial regulatory analysis increasingly need to be considered together rather than sequentially.

Interbank Transactions and Investment Services

CRD VI contains other relevant carve-outs. Certain services provided to credit institutions and qualifying financial counterparties may fall within the interbank/interdealer exception. There is also an important interaction with the European MiFID II framework: Article 21c excludes certain investment services and activities covered by MiFID II, together with accommodating ancillary services, which can include related deposit-taking or lending where those services support the relevant investment activity.

This area requires particular care. The European Banking Authority has already recognized that questions remain regarding the interaction between Article 21c and other pieces of EU financial-services legislation. In other words, determining whether a transaction is subject to CRD VI may sometimes require examining several European regulatory regimes rather than Article 21c in isolation.

The Dates Businesses Should Know

There are three particularly important dates.

10 January 2026

This was the deadline for EU Member States to transpose CRD VI into national law. Implementation, however, has not proceeded uniformly across the Union. According to the European Commission's CRD VI transposition tracker, updated on 7 August 2026, 22 of the 27 Member States had infringement proceedings pending for non-communication of transposition measures. Only 12 Member States had communicated full transposition.

Portugal, Spain and the Netherlands had not communicated any transposition measures at all. France and Germany were also listed in the Commission's infringement materials despite being recorded as having communicated full transposition, apparently reflecting a procedural lag in formally closing those files.

This makes jurisdiction-specific analysis particularly important during the transition period. The fact that a directive has been transposed, or partially transposed, does not necessarily mean that the relevant national implementation process is complete or that all procedural issues have been resolved.

11 July 2026

This was the critical grandfathering date. Article 21c provides protection for acquired rights under contracts entered into before this date. For businesses with existing cross-border facilities, however, the analysis should not necessarily end there: material amendments, extensions, increases in commitments, refinancings or restructurings of grandfathered arrangements may require fresh analysis as market practice and national implementation develop.

11 January 2027

This is when the new regime is scheduled to become applicable. For businesses negotiating financing during the second half of 2026, January 2027 is therefore not a distant compliance date. A facility entered into today may continue well beyond that date. Transaction planning should reflect that reality.

The Wider Lesson for International Businesses

CRD VI illustrates a broader development in international business regulation. Corporate structures can no longer be analyzed jurisdiction by jurisdiction in isolation.

A company incorporated in Panama may own an entity in the UAE. That entity may invest in Portugal. The Portuguese company may obtain financing from a U.S. institution. Its shareholders may reside in several different jurisdictions. Each individual component may be perfectly legitimate.

But the transaction exists between regulatory systems. That intersection is increasingly where legal risk arises.

For companies operating internationally, the relevant question is therefore moving from "Is this structure legal in each country?" to "Does this structure still work when the rules of every relevant jurisdiction interact?" Those are very different questions.

What European Companies Should Be Reviewing Now

Businesses with meaningful non-EU banking or financing relationships should use the period before January 2027 to map those relationships. A practical review should include the following steps:

1. Identify all non-EU lenders and banking counterparties.
2. List existing guarantees, credit facilities, commitments and other arrangements involving non-EU institutions.
3. Separate regulated financial institutions from commercial companies, private credit structures, investment vehicles, family offices, SPVs and other non-bank lenders.
4. Review intragroup financing arrangements and determine whether the relevant exemption may apply.
5. Document how each banking or financing relationship originated, including any marketing, introductions or intermediary involvement.
6. Assess upcoming refinancing, extension, amendment and restructuring requirements.
7. Identify contracts entered into before 11 July 2026 that may benefit from grandfathering.
8. Check whether proposed amendments or increases in commitments could affect the grandfathering analysis.
9. Determine which EU Member State's implementation of CRD VI is relevant to each arrangement.
10. Consider whether MiFID II, interbank or another regulatory framework may apply instead of, or alongside, Article 21c.

The objective is not to assume that every cross-border arrangement creates a CRD VI problem. Quite the opposite: the objective is to determine which relationships actually require regulatory attention before they become transaction problems.

Cross-Border Planning Is Becoming Part of Regulatory Compliance

Article 21c is ultimately more than a banking regulation issue. It is another example of why companies operating internationally need corporate, financing and regulatory decisions to be considered together.

For European businesses receiving capital or banking services from outside the Union, and for international investors financing European operations, the next transaction should therefore begin with a broader question: can every party perform its role in this transaction across the jurisdictions involved?

That distinction can determine whether a cross-border structure merely looks good on paper or actually works.

At Business Advisory Panama, we work with international businesses and investors whose operations, corporate structures and commercial relationships extend across multiple jurisdictions. Our role in cross-border matters is to identify how those jurisdictions interact, coordinate with the appropriate local and regulatory specialists where required, and help clients structure transactions with those interactions in mind.

For businesses reviewing existing or proposed arrangements involving Panama, the United States, the UAE and European jurisdictions, the months leading into January 2027 provide a useful opportunity to review the structure before the regulatory question becomes a transaction issue.

This article is provided for general informational purposes only and does not constitute legal, regulatory, tax or financial advice. The application of CRD VI and Article 21c depends on the nature of the institution, the transaction and the relevant EU Member State's implementing legislation. Specific transactions should be reviewed with qualified counsel in the jurisdictions involved.

AI disclosure: This article was prepared with the assistance of artificial intelligence and reviewed for general informational purposes. It is not a substitute for advice from qualified legal, regulatory, tax or financial professionals.