New tax residency against the EU foreign banking rules
Published at: 30/09/2026 10:17 am
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The new EU rules practically do not let tax residents of the European Union to have bank accounts outside of the bloc in foreign banks.
It means that third countries' financial institutions will be prohibited from offering core services for EU residents, especially deposits, lending and financial guarantees, unless they have local branches or subsidiaries.
Starting January 11, 2027, new European Union regulations stemming from Article 21c of the sixth Capital Requirements Directive will significantly alter how non-EU banks provide services to individuals living inside the bloc.
The rule applies on residents, so those EU citizens, who live permanently outside of the bloc are unaffected. There is grandfathering protection, so the contracts established before July 2026 may remain open if the foreign bank does not change its terms significantly.
Moreover, non-EU banks may still provide services, if the client approaches the bank without marketing, advertising or active solicitation. However, it is almost impossible to prove, so it looks like most foreign banks will simply decline clients with EU tax residency.
Do not forget what happened with the bank accounts for US citizens after introducing the FATCA rules. At the opening of a bank account you must sign a paper that you have nothing to do with the US or the bank will refuse you. Compliance for the financial institutions will be almost impossible.
Non-EU banks may still provide services to an EU resident under a strict "reverse solicitation" exemption, meaning the client must approach the institution entirely on their own initiative without any prior marketing, advertising, or active solicitation by the bank.
The new rules do not directly ban opening accounts, it only creates a situation, when bank account owners must rethink their cross border wealth management structures to comply with the updated European regulations.
Do the new foreign banking rules force you to move your tax residency from the EU?
Moving your tax residency is a challenging decision. There are dozens of sovereign states welcoming you with no or low-taxes based on your local income where your foreign sourced income is exempt. Changing your tax residency can be the solution for the cross country banking rules.
At Discus Holdings Ltd our experts have more than three decades of experience supporting your wealth management and international tax compliance through new residency or citizenship. Call us for advice!