In short
Regulators expect genuine local management substance: senior decision-makers based in the Member State, effective direction exercised locally and real operational capability. A nameplate office with directors elsewhere will not satisfy modern supervisory expectations.
What substance means
Effective direction from within the EU, appropriately experienced local senior management and genuine operational capability.
Common shortfalls
Directors who are non-resident, outsourced core functions without oversight, and decision-making that clearly sits outside the Member State.
Building credible substance
Plan hiring, governance and local operations early, because substance cannot be retrofitted the week before submission.
Related regime guide: AML & DORA
Official regulatory sources
Verified external references. Always confirm against the current official text.
RenIQ provides regulatory strategy and programme delivery. It is not a law firm and this content is illustrative guidance, not legal advice. Regime details are summaries that may change, so always verify against current rules and official sources, and take formal advice before acting.