Article 43 of the Banking Law stipulates as a condition for authorisation of credit institutions governed by Belgian law that their central administration must be established in Belgium, i.e. in the same Member State as its registered office. This legal obligation flows from European Directive 95/26/EC of 29 June 1995 (the “BCCI Directive”)^[1].

The concept of “central administration” should be understood within the meaning of Article 48 of the Treaty on European Union, and covers the concept of “real seat”, i.e. the place where the institution’s essential decisions are taken and where the conduct of its business is effectively concentrated. This is the main administrative headquarters and not the main place of operation. Thus, “central administration” means the place from which the institution is managed and where its organs usually meet.

The use of technological means for remote decision-making makes the concept of central administration more difficult to define. For instance, in order to conclude that the “nerve centre” of the business of an institution with a cross-border organisation is established in Belgium and that the institution in question therefore fulfils the legal condition of having its central administration in Belgium, the members of the management committee and the persons responsible for the independent control functions must be sufficiently available in Belgium.

In addition, these persons must be able to respond within a reasonable period of time to any request made by the NBB, including requests for interviews involving their physical presence either at the institution’s registered office or at the NBB’s premises. The same applies to the members of the statutory governing body, although they may be allowed more flexibility.

Finally, it is recommended that all persons responsible for independent control functions^[2] be registered in the institution’s personnel register and that the majority of meetings of the statutory governing body and the management committee be held on Belgian territory at the seat of the institution.

^[1] European Parliament and Council Directive 95/26/EC of 29 June 1995 amending Directives 77/780/EEC and 89/646/EEC in the field of credit institutions, Directives 73/239/EEC and 92/49/EEC in the field of non- life insurance, Directives 79/267/EEC and 92/96/EEC in the field of life assurance, Directive 93/22/EEC in the field of investment firms and Directive 85/611/EEC in the field of undertakings for collective investment in transferable securities (Ucits), with a view to reinforcing prudential supervision.

^[2] This also applies to organisational models where the independent control functions are centralised in the group, as even in the case of full outsourcing of an independent control function, a person responsible for the control function must still be appointed within the regulated entities of the group in order to inter alia monitor the quality of the outsourcing (see in particular the Regulation of the NBB of 19 May 2015 on internal control and internal audit as well as Circular NBB_2015_21).