COREDO > Business support > Instruments for Financial Institutions > Licence Passporting

Licence Passporting

What Is Financial Licence Passporting

Financial licence passporting allows licensed companies to provide services throughout the European Union and the European Economic Area without obtaining a separate licence in each country. This mechanism significantly simplifies international expansion and access to the single European market.

Since 2016, COREDO has been assisting clients with passporting procedures, helping financial institutions and fintech companies expand into new EU markets in compliance with European regulatory requirements.

Get a Consultation

Cost of the service
is individual

How Passporting Works: Mechanism and Procedure

The passporting procedure is initiated in the home member state and proceeds through the regulatory authorities of both parties. In accordance with Article 28 of PSD2, the process is as follows:

Preparation of the notification.

The company submits to the competent authority of its home country a package of documents describing its intention to conduct activities in the host country: either in the form of freedom to provide services (cross-border basis) or by opening a branch (freedom of establishment / branch).

01

Transmission of the notification.

Within one month of receiving the complete documentation package, the competent authority of the home member state transmits the notification to the regulator of the host country.

02

Assessment by the host regulator.

The regulator of the host country assesses the information within one month and may provide the home regulator with details of applicable local rules.

03

Decision.

Within three months of receiving the initial notification, the competent authority of the home member state communicates its decision to both the host regulator and the company itself.

04

The difference between the two regimes is substantial. Under freedom to provide services (cross-border basis), no permanent representation in the host country is required: the company may serve clients remotely, and the procedure is simpler and faster. Under freedom of establishment (branch), the company opens a full branch in the host country — this requires additional documentation but provides a stronger presence in the local market.

Who Can Use Passporting

Companies holding a valid financial licence in one of the EU or EEA countries can use the single passport mechanism:

Payment institutions (PI)

and electronic money institutions (EMI) — passporting under PSD2 / EMD2 grants access to all 27 EU member states and three EEA countries (Norway, Liechtenstein, Iceland);

Credit institutions and banks

passporting under CRD IV, including rights under MiFID II for ancillary investment services;

Investment firms

passporting under MiFID II, enabling cross-border provision of any licensed investment services or provision through a branch;

Insurance companies

passporting under Solvency II;

Alternative investment fund managers (AIFM)

in accordance with the AIFMD Directive.

It should be noted that not all types of financial organisations have the right to passport. For example, specialised banks that do not accept deposits and do not qualify as credit institutions under CRR, as well as providers of financial leasing or factoring that are not investment firms under MiFID II, cannot use this mechanism.

Non-EU Companies and EU Market Access via Passporting

While passporting itself is inherently an EU/EEA-specific mechanism, many of COREDO’s clients are companies based outside the EU seeking to enter the European market. For non-EU organisations, obtaining a financial licence in an EU member state specifically to leverage passporting rights is a strategic approach to scaling operations across the single market.

Common scenarios for non-EU companies:

UK-based companies (post-Brexit). Following the UK’s departure from the EU, UK financial firms can no longer rely on UK licences for EU market access. Instead, they must establish a subsidiary or branch in an EU member state, obtain a licence there, and use the passporting mechanism to access the remaining EU27 market.

Singapore, Dubai, and other non-EU financial hubs. Fintech companies and payment service providers headquartered in Singapore or Dubai often establish EU entities specifically to benefit from passporting — this enables them to reach the 27 EU member states and EEA countries through a single licence.

North American firms. Canadian and US-based payment institutions frequently choose to incorporate in the EU (often in jurisdictions such as Czech Republic or Lithuania) to obtain licences that qualify for passporting, thereby avoiding multiple separate licensing procedures.

COREDO’s role in non-EU market entry: COREDO helps non-EU companies select the optimal EU jurisdiction for licensing, taking into account regulatory requirements, operational costs, and strategic positioning. The choice of home member state is critical: some jurisdictions (such as Czech Republic, Lithuania, and Malta) offer streamlined licensing paths and strong regulatory support, making them preferred entry points for non-EU firms seeking to establish an EU presence and maximise passporting potential.

Switzerland and Cross-Border Access via FINMA

While Switzerland is not an EU member state, its extensive bilateral treaty framework with the EU creates unique opportunities for financial firms seeking access to Swiss and EU markets. Switzerland is not part of the EEA passporting regime, but FINMA (Swiss Financial Market Supervisory Authority) has issued equivalence decisions that grant certain EU-licensed firms conditional access to Swiss market segments.

For EU-licensed payment institutions, investment firms, and banks, FINMA’s framework permits limited cross-border provision of services under the Swiss Financial Services Act (FinSA) and Financial Institutions Act (FinIA). Swiss-EU mutual recognition is asymmetrical and more restricted than intra-EU passporting: equivalence decisions apply on a sector-by-sector basis and may require Swiss-domiciled representatives or local compliance arrangements.

Non-EU companies cannot directly leverage Swiss FINMA licensing for EU market access — Switzerland’s bilateral agreements are strictly bilateral, not connected to broader European passporting. However, EU-licensed entities may expand to Switzerland as a complementary market under FINMA equivalence conditions.

Requirements and Required Documents

For successful licence passporting, the company must have:

A valid financial licence in a home EU member state (EMI, PI, banking licence, MiFID, etc.);

Up-to-date and complete corporate documentation (articles of association, management resolutions, ownership structure);

A description of the planned activities in the host country: list of services, projected volume, target markets;

Information about managers and responsible persons, if a branch is to be opened;

Details of risk management systems and AML/CFT procedures adapted to the requirements of the host member state.

Depending on the chosen regime (freedom of services or establishment) and the specific directive, the list of required documents varies. The regulator of the host country may also request information on compliance with local rules — in particular, consumer protection requirements, local AML rules, and specific national licensing conditions.

Important: the company may not commence activities in the host country until confirmation is received from the home regulator. Failure to comply with this requirement entails regulatory risks in both the home and host member states.

COREDO Solutions in Passporting

Since 2016, COREDO has been helping financial organisations leverage the opportunities of the single European market. The legal team led by Pavel Kos supports clients at every stage — from the initial assessment of the applicable regime to receiving confirmation of registration in the host country.

COREDO provides the following services within the scope of passporting:

Compliance assessment

analysis of the client’s existing licence, selection of the optimal regime (freedom of services or establishment), identification of target jurisdictions;

Document package preparation

preparation of the notification for the home regulator in accordance with the requirements of PSD2, EMD2, CRD IV, or MiFID II;

Regulatory liaison

legal support for correspondence with the competent authorities of the home and host member states;

AML/CFT procedure adaptation

bringing internal policies into compliance with the requirements of the host member state;

Status monitoring

oversight of compliance with the deadlines established by the directives and prompt response to regulatory requests;

Legal consultations

assessment of regulatory risks in each target jurisdiction, analysis of applicable local rules.

Geographic coverage — all 27 EU member states and EEA countries. Specialist expertise — Czech Republic, Germany, Poland, the Baltic States, the Netherlands, Malta, Ireland.

Pricing

Pricing is calculated individually. Contact COREDO for a quote.

The scope of work and final cost depend on the type of licence, the chosen passporting regime (freedom of services or establishment), the number of target jurisdictions, and the required volume of documentation adaptation. COREDO specialists will prepare a detailed commercial proposal following an initial consultation.

Our Experts

Pavel Kos

Head of Legal at COREDO. Specialises in licensing of financial organisations, corporate law, and regulatory advisory in the EU. With COREDO since 2017.

Daniil Saprykin

Head of Customer Success. Ensures effective interaction between clients and the COREDO team at all stages of the project.

Frequently Asked Questions

Do I need to obtain a separate licence in each EU country?

No. If your company holds a valid financial licence in one EU member state, you can use the single passport mechanism and extend your activities to other EU countries through the passporting procedure — without repeated licensing.

How long does the passporting procedure take?

Under PSD2, after receiving the complete documentation package, the home member state regulator transmits the notification to the host regulator within one month, and the final decision is made within three months. Actual timelines may vary depending on the regulator and the completeness of the documents provided.

Which companies can undergo passporting?

Passporting is available to payment institutions (PI), electronic money institutions (EMI), credit institutions, MiFID II investment firms, insurance companies, and alternative investment fund managers (AIFM) holding a valid licence in an EU or EEA country.

What is the difference between freedom to provide services and freedom of establishment?

Freedom to provide services allows the company to serve clients in the host country remotely, without opening a physical representation. Freedom of establishment (branch) involves opening a full branch in the host country — this is more complex and requires more documentation, but provides a more stable presence in the local market.

Is it necessary to adapt AML policies for each new country?

Yes. Host member states may establish additional requirements in the areas of AML/CFT, consumer protection, and reporting. Internal policies must be brought into compliance with local rules before commencing activities in the host country.

What happens to the passport if the licence conditions change?

Any material changes to the terms of the existing licence (expansion of services, change of management, etc.) require notification of the home regulator and may require updating the passport notification in host member states.

Can a non-EU company use passporting?

Passporting itself is available only to companies holding a licence in an EU or EEA member state. However, non-EU companies can benefit from passporting by establishing a subsidiary or branch in an EU country and obtaining a financial licence there. For example, a Singapore-based fintech company can incorporate in the Czech Republic, obtain a payment institution licence, and then passport that licence across all 27 EU member states plus the three EEA countries. This approach allows non-EU firms to enter the European market efficiently without seeking separate licences in multiple jurisdictions. COREDO advises non-EU companies on the optimal EU jurisdiction for licensing to maximise passporting advantages.

Submit an Application

Ready to expand your activities to other EU countries? Contact COREDO for an initial consultation and preparation of a tailored proposal.