In addition to creating a subsidiary, foreign credit institutions can operate in Spain by opening a branch or under the freedom to provide services regime. The applicable procedure depends on whether the credit institution is authorised in another Member State of the European Union.
Credit institutions authorised in another EU Member State
The rules applicable to the opening of branches and the free provision of services in Spain by credit institutions of another EU Member State are included in Article 12 of Law 10/2014 of 26 June 2014
on the regulation, supervision and solvency of credit institutions, Article 16 of Royal Decree 84/2015 of 13 February 2015 implementing the aforementioned law and Rule 3 of Banco de España Circular 2/2016 of 2 February 2016 to credit institutions on supervision and solvency, which completes the adaptation of Spanish law to Directive 2013/36/EU and to Regulation (EU) No 575/2013.
Applications for the opening of branches and the free provision of services must be sent to the supervisory authority in the credit institution’s home country, and the supervisory authority will send them to the Banco de España.
Before commencing their activities, the branches must be registered in the Banco de España's Institutions Register. The steps to be taken for the registration are detailed in the procedure for registration in the Institutions Register of the Banco de España Virtual Office. In the case of the exercise of the freedom to provide services, they may commence their activities in Spain once the Banco de España has received the related notification from the supervisory authority.
The above rules will also apply to the opening of branches or the freedom to provide services in Spain by financial institutions of another EU Member State, whether a subsidiary of a credit institution or a subsidiary common to several credit institutions, provided that the requirements laid down in Article 12(4) of Law 10/2014 of 26 June 2014 are complied with.
Credit institutions not authorised in an EU Member State
The rules applicable to the opening of branches and the free provision of services in Spain by credit institutions of a non-EU Member State are included in Article 13 of Law 10/2014 of 26 June 2014 on the regulation, supervision and solvency of credit institutions, Article 17 of Royal Decree 84/2015 of 13 February 2015 implementing the aforementioned law and Rule 4 of Banco de España Circular 2/2016 of 2 February 2016 to credit institutions on supervision and solvency, which completes the adaptation of Spanish law to Directive 2013/36/EU and to Regulation (EU) No 575/2013.
The authorisation requirements are similar to those applicable to an authorisation of a credit institution. It is important that the credit institution be able to evidence that the principles of equivalence and of reciprocity are being complied with.
The application must be addressed to the Banco de España, which is responsible for issuing a resolution.
The application for authorisation must include the documentation mentioned in the section on authorisation for credit institutions of non-EU countries to open branches in Spain of the Banco de España Virtual Office. With regard to the free provision of services, the application for authorisation must include information on the applicant credit institution and the activities to be carried out in Spain.
Representative offices
Furthermore, the regulations provide that credit institutions authorised in other countries (whether or not EU members) may set up representative offices in Spain. Such offices provide information or commercial services relating to banking, financial or economic matters.
The establishment of representative offices by credit institutions authorised in non-EU Member States requires the authorisation of the Banco de España, which is also responsible for issuing a decision, in accordance with the provisions of Article 19 of Royal Decree 84/2015 of 13 February 2015, implementing Law 10/2014 of 26 June 2014 on the regulation, supervision and solvency of credit institutions.
The authorisation procedure can be found in the section on authorisation for credit institutions of non-EU countries to open representative offices in Spain of the Banco de España Virtual Office.
