UK Authorisation for International Firms
An overseas firm entering the UK is not judged on the strength of its home-state licence. It is judged on whether the FCA can supervise the UK entity and act against it — which is a question about where decisions are actually made, who makes them, and what happens to UK customers if the group fails.
We are an ex-FCA authorisations team. We scope the perimeter question first, settle the branch-or-subsidiary decision on evidence, and build the UK substance the threshold conditions actually require.
The UK Authorisation for International Firms journey
The route from scoping your permissions to a decision. The FCA's part of it is fixed; the preparation before it is where applications are won or lost.
Establish the UK perimeter and structure
Which of the group's activities are carried on in the UK, and therefore what has to be authorised here. The branch-or-subsidiary decision follows from that, not the other way round.
- Identify the activities carried on in the UK
- Decide branch or subsidiary on the regulatory consequences
- Establish where decisions about UK customers are made
Evidence UK substance
The application is decided on whether the FCA can supervise the UK entity, which depends on people and decisions being here rather than on the strength of the home-state licence.
- Locate senior management and governance in the UK
- Evidence resources and effective supervision for the UK entity
- Translate group material into what a UK supervisor expects
Submit to FCA
Submitted through the FCA's Connect portal with the application fee of £280 – £225,170.
- Complete submission through Connect
- Application fee paid at submission
- Case officer assigned by the FCA
FCA review
The statutory determination period is 6–12 months — six months for a complete application, twelve if it is incomplete when submitted.
- Case officer raises questions on the submission
- Further information requests answered and evidenced
- Weak responses, not complexity, are the common cause of delay
Permission granted
Permission is granted and the firm can carry on the regulated activity, subject to any requirements attached to it.
- Permission recorded on the Financial Services Register
- Any limitations or requirements confirmed
- Reporting and supervision obligations begin
- FCA determination
- 6–12 months
- FCA application fee
- £280 – £225,170
Statutory period from a complete application
No separate branch or subsidiary fee — the category follows the permissions sought
What are you deciding?
The right preparation depends on the UK activity and the structure behind it.
Perimeter
Determine whether UK authorisation is required.
Branch or subsidiary
Compare the governance and supervision implications.
UK substance
Plan people, oversight and central management.
Application evidence
Build a UK-specific business plan and controls.
Key UK Authorisation for International Firms Requirements
What the FCA expects, and the evidence behind it.
What you will need to produce
- UK perimeter and structure analysis
- Branch or subsidiary rationale
- UK governance and substance plan
- Application and threshold-condition evidence
Choose the UK structure from the facts
Branch and subsidiary decisions should follow the model the FCA will supervise.
Perimeter
Assess UK activities, cross-border services and any relevant exclusion before selecting a route.
Branch or subsidiary
Compare governance, supervision, customer type, client assets and home-state dependencies.
UK substance
Define where decisions, administration, compliance and anti-money laundering oversight sit.
Connect the UK application to group reality
The FCA needs to see both local accountability and the information flows around the group.
Local governance
Set senior-manager roles, challenge, reporting and escalation for the UK activities.
Resources and controls
Evidence people, capital, technology, financial crime, outsourcing and customer arrangements.
Supervisory evidence
Explain how the UK entity can be supervised and how group support remains controlled.
How MEMA helps
The question is rarely whether a UK entity is possible. It is which structure the FCA will authorise given how the group actually runs.
- 01
Establish the UK perimeter
Which of the group's activities are carried on in the UK, and therefore what has to be authorised here rather than elsewhere.
- 02
Choose branch or subsidiary
The structural decision, taken on the regulatory consequences of each rather than on tax or convenience alone, with the rationale documented.
- 03
Design UK substance
Governance, senior managers and decision-making located in the UK to the degree the permission requires — the point most international applications turn on.
- 04
Evidence the threshold conditions
Resources, suitability and effective supervision evidenced for the UK entity specifically, not by reference to the parent.
- 05
Manage the application
Submission and case-officer engagement, with the group's own material translated into what a UK supervisor expects to see.
What We Do
From the perimeter question through to authorisation
Perimeter And Permissions
Whether the activity is carried on in the UK, whether the overseas persons exclusion is genuinely available, and exactly which permissions the business model requires. Settled before anything is drafted.
Branch Or Subsidiary
A reasoned recommendation against the FCA's own criteria — retail exposure, client asset arrangements, and how home-state insolvency law interacts with UK safeguarding — rather than whichever is cheaper to incorporate.
UK Substance Design
Placing day-to-day decision-making and the central administrative, compliance and financial crime functions under genuine UK performance or day-to-day oversight, in a way the application can evidence and the firm can actually operate.
Senior Managers And Governance
SM&CR mapping for the UK entity, time-in-UK expectations for senior managers involved in the UK business, and governance that gives the UK board genuine independent challenge.
Client Assets And Financial Crime
Safeguarding and CASS arrangements tested against the failure scenario, and a UK financial crime framework with an MLRO who is resourced rather than nominal.
Application And FCA Liaison
Regulatory business plan, financial projections, the policy suite, submission through Connect, and management of the FCA's questions through to determination.
The Regulatory Position
What the FCA is actually assessing when an international firm applies
The UK Presence Expectation
Substance, Not A Registered Address
The FCA must be satisfied that day-to-day business decisions, and the central administrative, compliance and anti-money laundering functions, are performed — or overseen on a day-to-day basis — in the UK. UK oversight of offshore functions can satisfy this; a UK entity that merely books business decided elsewhere does not.
Branch Or Subsidiary
A Structural Decision Taken Early
Both routes are open: the FCA says firms can serve UK customers from an entity incorporated outside or within the UK. It points towards a UK subsidiary where branch risks cannot be adequately mitigated — particularly around retail customers and client assets.
Head Office And Central Management
COND 2.2, And Time In The UK
COND 2.2.3G reads head office by reference to the location of central management and control — the directors and senior managers taking central-direction decisions, plus central compliance and internal audit. The FCA would typically expect senior managers involved in the UK business to spend adequate time here, though it accepts that purely strategic roles may sit elsewhere.
The Threshold Conditions
COND 2.1 To 2.7, Assessed Afresh
Legal status, location of offices, effective supervision, appropriate resources, suitability and business model are all assessed on the UK application's own terms. Location of offices (COND 2.2) bites on UK-incorporated bodies, requiring head and registered office in the UK — so it applies to the subsidiary route rather than to a third-country branch, which is itself part of the structural decision.
The Three Harms The FCA Is Testing For
The FCA’s approach to international firms names three specific risks of harm. An application that does not address them directly is answering a different question from the one being asked.
- Retail harm
- UK branches are generally subject to the same redress requirements and FSCS cover as UK firms. The harm is that redress and supervisory oversightcould be less effective in practice — particularly if the firm becomes insolvent or refuses to pay, because pursuing it in the home state is complex and expensive.
- Client assets harm
- That a mismatch between UK safeguarding rules and home-state insolvency law leaves client money or custody assets not ring-fenced in the way UK rules intend. This is the harm most often under-evidenced, because it only bites in a failure scenario.
- Wholesale harm
- That shocks originating in overseas offices are harder to detect or prevent, can be passed easily to the firm’s UK office, and could affect the stability and integrity of UK markets.
Which of the three dominates depends on the business model. A retail-facing branch and a wholesale trading operation are answering the same threshold conditions with very different evidence.
What Slows International Applications Down
The recurring weaknesses are structural, and all of them are cheaper to fix before submission than after a first round of FCA questions.
- Treating the UK entity as a distribution office while the decisions, the risk appetite and the compliance function all remain overseas.
- Assuming a home-state licence carries evidential weight it does not have. It supports suitability; it does not answer effective supervision.
- Senior managers who cannot evidence meaningful time in the UK, or who hold UK titles without the authority to overrule the group.
- Client asset arrangements described in UK terms without testing what home-state insolvency law would actually do to them.
- A UK compliance and MLRO function sized for the application rather than for the business the firm intends to write.
- Applying before the perimeter question is settled — which risks either over-applying for permissions that are not needed, or carrying on a regulated activity without them.
Related Services
What international firms usually need alongside the application
Related FCA Guidance
Primary sources and deeper reading on the perimeter, evidence and client assets.
PERG: Perimeter Guidance
Whether what you intend to do in the UK is a regulated activity in the first place.
EvidenceFCA Authorisation Evidence
What the FCA expects to see rather than be told, and how to evidence it.
HandbookCASS: Client Assets
Client money and custody rules — the area where cross-border structures most often fail on evidence.
Tell us what you intend to do in the UK
Whether you are scoping a UK entry, deciding between a branch and a subsidiary, or already mid-application, tell us the position and we will come back to you.
Prefer to talk it through first? Call and you will speak to a consultant, not a switchboard.
Frequently Asked Questions
Select a question to view the answer.
Does an overseas firm need FCA authorisation to serve UK clients?
It depends on whether the activity is carried on in the UK and whether an exclusion applies. The overseas persons exclusion at article 72 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) takes some cross-border business outside the authorisation requirement entirely, and the FCA's approach document treats firms relying on it as outside its scope. That makes the perimeter question the first one to answer, not the last: a firm that assumes it needs authorisation may be over-applying, and a firm that assumes it does not may be carrying on a regulated activity without permission.
Should we authorise a UK branch or set up a UK subsidiary?
The FCA is clear that firms can serve UK customers from an entity incorporated either outside or within the UK, so both routes are open. A UK subsidiary is framed as another option that may help reduce the risk of harm, and where branch risk cannot be adequately mitigated the FCA may invite a firm to apply for authorisation on that basis instead — in particular where retail customers are involved, or where client asset protections would be better served by UK incorporation because of the interaction between UK safeguarding rules and home-state insolvency law. For a branch carrying on MiFID activities, the FCA has said it needs comfort over the prudential rules applying in the home jurisdiction.
What does the FCA mean by a UK presence?
The FCA needs to be satisfied that day-to-day business decisions, and the central administrative, compliance and anti-money laundering functions, are being performed or overseen on a day-to-day basis in the UK. That second limb matters: UK-based oversight of functions performed elsewhere can be acceptable, so this is not automatically a requirement to relocate teams. It is a substance test rather than a registered-address test, and it flows from the effective supervision threshold condition.
Do our senior managers have to be based in the UK?
The FCA says it would typically expect senior managers directly involved in the UK activities to spend an adequate and proportionate amount of time in the UK — but it expressly recognises that individuals with purely strategic responsibilities for a UK branch may not be UK-based. The more practical point it makes is that senior managers should not be limited in how much time they can spend in the UK by, for example, their tax arrangements. It also expects those responsible for day-to-day management of the UK activities to exercise independent challenge over strategic decisions affecting the wider firm.
Does our existing home-state authorisation count for anything?
It is relevant context, not a substitute. The threshold conditions apply to the UK application on their own terms — effective supervision, appropriate resources, suitability and business model. A strong home-state track record helps evidence suitability, but it does not remove the need to demonstrate UK substance, UK governance, and a business model the FCA can supervise.