Why The New Licensing Requirement For Cross-Border Loans Is (Mostly) Not An Issue

Non-EU entities lending to corporate entities in Belgium will face a licensing regime going forward (as from 11 January 2027), ie. be required to establish a branch supervised by the NBB (Belgian National Bank).

Before, lending to corporate borrowers was unregulated, but this changes under the impetus of the EU’s new CRD VI rules. Much ink has (and will) flow over the topic, but below we summarize the safe harbours and exemptions.

1. Not a deposit-taking ‘banking activity’ inthe lender’s home jurisdiction: the banking activity consists, in essence, (i) in taking deposits (or other repayable funds) and(ii) lending to third parties (iii) issuing guarantees. Only lending (ie. granting loans and trade credit financing, or issuing guarantees) when no deposit-taking occurs in the home jurisdiction, would place the entity outside the new requirements. In short, non-bank lenders are safe (with below, further caveat on this point).
2. Reverse solicitation: typically, we advise against relying on reverse solicitation, as it is often a bit of a stretch, but for the present regime one sees genuine and likely cases that non-EU lenders are brought into a loan operation at the exclusive initiative of the borrower. One needs to tread carefully, but in this instance, it is a viable exception, also allowing for closely linked services to be offered to the Belian borrower.
3. Intra-group lending: lending to a group entity (by a bank lender or by non-bank lender), is not covered.
4. Linked to MiFID services: when the bank services of deposit taking and lending are ancillary to the investment services provided.
5. Inter-bank lending: when the borrower is a Belgian bank.
6. Loans predating 11 July 2026: contracts with Belgian borrowers from prior to that date, are not covered; refi’s or substantial amendments/extensions of those loans may need to be looked at carefully.
7. Already licensed, ie. a branch already exists in Belgium or another EU licensed subsidiary can be used under the passporting regime: no added licensing requirement, but compliance with the regulatory regime is to be checked.

For non-bank lenders, when assessing whether it may be considered to be offering the activities of a credit institution under EU law (and is subject to the new licensing requirement), it is also necessary to determine whether that lender qualifies as a credit institution under Belgian law.

For this purpose, reference can be additionally made to the Belgian law definition of a credit institution requiring it (i) accept deposits or other repayable funds from the public and (ii) grant credit for its own account. The “public” element is further specified in the Belgian Royal Decree of 9 October 2009, under which funds are generally considered to be raised from the public where, inter alia, more than 50 persons are targeted or solicited, or where intermediaries are used. Importantly, the Royal Decree excludes certain intra-group funding arrangements where liquidity is received from affiliated undertakings for the purpose of centralising investments or financing the undertaking or its affiliates. Accordingly, when assessing whether the new regime applies to non-bank lenders, the concept of offering services similar to those of a credit institution under EU law may need to be further nuanced.

As a conclusion, a sizeable list exists that would exempt the non-EU lender from regulatory burdens when financing corporate borrowers in Belgium. Therefore, the case can be made that not much will change for a large part of the corporate lending transactions.

Where things do get tricky is:

-        where a home country license applies that doesn’t fully fit the EU-logic on deposit taking

-        when another EU branch is involved in the lending operation: the exceptions work differently there, causing complexity, but one can see structuring options that would side-step any licensing requirement as well

Authors:

Pieter Bogaerts, Partner
Pieter.bogaerts@monardlaw.be

Steven Demeulenaere, Lawyer – Senior Associate
Steven.demeulenaere@monardlaw.be