In short
Union authorisation frameworks require the authorised entity to be established in a Member State and to have its head office or effective management there. That is the legal floor.235 What supervisors expect above it, in seniority, residence and real operational capability, is practitioner observation rather than a rule any single instrument states, and this article distinguishes the two.
What the law requires
What the frameworks actually require
An investment firm must have its head office in the same Member State as its registered office. A credit institution is subject to an equivalent head office requirement. A crypto-asset service provider must have a registered office in a Member State and its place of effective management in the Union. A payment institution authorisation is granted only to a legal person established in a Member State.12345
These are conditions of authorisation, not preferences. They are the part of the substance question that can be answered from the text.235
RenIQ practitioner observation
What is observation rather than rule
Beyond that floor, the depth of local seniority, the residence of directors and the extent of outsourcing that a given authority will accept are matters of supervisory practice. They differ between authorities and they change over time.
RenIQ describes these as observations from practice, and does not present them as requirements stated in the instruments. Where a specific expectation matters to a decision you are about to take, it should be checked with the authority concerned.
What the law requires
Building credible substance
Plan hiring, governance and local operations early, because the establishment conditions are structural and cannot be retrofitted the week before submission.235
Keep a clear record of where decisions are actually taken. That record is what makes the answer to a supervisory question about substance a description rather than an argument.
Related regime guide: AML & DORA
This is a supporting note behind the decision guide Choosing a Member State, without ranking regulators.
Primary sources for this page
5 citations, each to the article or section the statement rests on. The numbers beside a statement point to the citation behind it. Always confirm against the current official text.
- 1Article 3(1), points (16) and (17), definitions of crypto-asset service and crypto-asset service providerRegulation (EU) 2023/1114 of the European Parliament and of the Council of 31 May 2023 on markets in crypto-assetsEuropean Parliament and Council of the European Union
- 4Article 11, granting of authorisation, including the requirement that authorisation be granted only to a legal person established in a Member StateDirective (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal marketEuropean Parliament and Council of the European Union
Last updated 2026-08-21. 1 min read, calculated from 286 words.