Are there specific restrictions on foreign shareholdings in banks?

Banking & Finance (2nd edition)

Israel Small Flag Israel

There are no explicit restrictions under Israeli law on foreign shareholdings in banks. In the past, certain foreign shareholders (foreign banks and foreign individuals) received permits from the BoI to hold control in banks in Israel. The abovementioned policy, which was published by the BoI regarding the criteria for granting control permit in a bank, addresses the possibility of foreign shareholders to obtain a permit to control a bank.

Austria Small Flag Austria

The notification requirements apply to any investor in credit institutions licensed in Austria.

Cyprus Small Flag Cyprus

There are no specific restrictions on foreign shareholdings in banks.

Finland Small Flag Finland

No dissenting treatment is applied to foreign investments under Finnish law.

France Small Flag France

The control of foreign investment in regulated entities has been removed by the Decree of 2 August 2005 regulating financial relations with foreign countries.

Turkey Small Flag Turkey

There is no restriction under Turkish banking legislation on foreign shareholdings in Turkish banks.

Furthermore, the Permission Regulation sets forth further documentation for the applications made to the BRSB in case of a share transfer as per Article 18 of the Banking Law; if the acquirer of the respective bank’s shares is a bank or financial institution incorporated outside Turkey.

Switzerland Small Flag Switzerland

A special additional licensing requirement exists if a bank is under a controlling foreign influence. In these cases, certain additional requirements have to be met. A controlling foreign influence is given whenever foreigners with a Qualified Participation (see Question 17.) directly or indirectly hold more than 50% of the voting rights in the bank or a significant influence on the bank is exercised in another manner. In addition, if the bank is part of a financial services group or a group being also engaged in the banking business, appropriate consolidated supervision by a recognised foreign supervisor must exist and be evidenced.

A subsequent additional license must be obtained from FINMA if a Swiss-controlled bank becomes for-eign-controlled after its establishment or if a foreign-controlled bank experiences a change of its foreign controlling person(s) at a later point in time.

Slovakia Small Flag Slovakia

No, there are no such restrictions. Additional requirements may apply though.

Germany Small Flag Germany

There is no general restriction on investments from countries outside the EU. However, the German Ministry of Economics can veto an investment of 10% or more in an undertaking of the financial sector, if it deems such investment to be a threat for the public order or security.

Singapore Small Flag Singapore

No. There are no restrictions in relation to shareholdings by foreigners.

Japan Small Flag Japan

There are no specific restrictions on foreign shareholdings in banks. Foreign shareholders are subject to the same requirements as those for domestic shareholders.

Oman Small Flag Oman

Foreign shareholding in banks is generally permitted up to 70 per cent. Up to 100 per cent. foreign own-ership may be permitted subject to the approval of the Council of Ministers of Oman. Please also note the restrictions set out in Questions 17 and 18 which will apply in any event.

Georgia Small Flag Georgia

No.

Liechtenstein Small Flag Liechtenstein

See our answers 17 and 18. No additional specific restrictions apply.

Luxembourg Small Flag Luxembourg

No.

Portugal Small Flag Portugal

There are no specific restrictions on foreign shareholdings in Portuguese institutions.

Malta Small Flag Malta

No, as long as the proposed acquirer meets the assessment criteria referred to in our reply to Q17.

Qatar Small Flag Qatar

Please refer to our answer under Question 18 above.

There is nothing preventing a foreign bank undertaking operations in the state of Qatar, branches of foreign banks can operate in the State of Qatar (currently in Doha, there are British, Iranian, Turkish and Chinese banks to name a few). A foreign bank who wishes to operate in Qatar has to submit greater paperwork compared to a local bank such as a list of names of members of board of directors and executive officers of the parent company, a list of names of the headquarter and branches in the home country and and international rating cetergory issued by the international rating agencies to name a few and therefore the process of recieving a license for a foreign bank may be slightly lengthier however foreign banks can operate in Qatar provided they have recieved a license from the Qatar Central Bank.

Romania Small Flag Romania

The foreign shareholdings are not subject to different requirements or treatment by the NBR or legal framework.

Serbia Small Flag Serbia

In principle, 100% of bank shares may be held by foreign entity or natural person. Specific limitations refer to the adequate system of control and monitoring in a foreign country. If the applicant for the consent for acquisition of shares in a domestic bank is a foreign bank or a foreign entity from the financial sector, the National Bank of Serbia shall provide such consent under the condition: 1) control, or supervision on the consolidated basis of this applicant is to be performed by the regulatory body of the state of origin in a manner satisfying the regulated conditions of the National Bank of Serbia, 2) there is appropriate coopera-tion between the National Bank of Serbia and the regulatory body of the state of origin of the applicant, 3) other conditions regulated by the National Bank of Serbia are met.

United Kingdom Small Flag United Kingdom

No, but other rules on protecting the national interest could apply to banks.

United States Small Flag United States

No; not at the Federal level. If a foreign (or any other) shareholder will obtain ‘control’ of a US bank, approval is required under the BHC Act or Change in Bank Control Act, as applicable. See our response to Question 17.

Italy Small Flag Italy

No.

Thailand Small Flag Thailand

Not less than seventy-five per cent of the total number of issued voting shares of a financial institution must be held by persons of Thai nationality and the number of its directors who are persons of Thai nationality must not be less than three-fourths of the total number of directors.

Where the BoT deems appropriate, the BoT may permit persons of non-Thai nationality to hold shares up to forty-nine per cent of the total number of issued voting shares, and may permit the number of directors of non-Thai nationality to be more than one-fourth but less than one-half of the total number of directors.

Where it is necessary to rectify the operation’s condition or to enhance the stability of any financial institution or for the stability of the financial institution system, the Minister may, with the advice of the BoT, grant relaxation for any financial institution to have the number of shares or directors other than that prescribed in the second paragraph. In this regard, rules or time clause on the relaxation may also be prescribed.

Slovenia Small Flag Slovenia

No.

Updated: May 14, 2019