By CRYPTOVERSE Legal Consultancy
An overseas crypto company may need FCA authorisation even if it has no UK office. The answer depends on its activities, assets, customers and the territorial rules applying to each service.
A separate question follows: if authorisation is required, what operating structure will the FCA accept?
These questions should be answered before a foreign exchange, custodian, broker or staking provider commits to a UK launch. An overseas licence, an offshore customer contract or a “reverse solicitation” disclaimer does not settle the UK assessment.
The expanded cryptoasset regime begins on 25 October 2027. Its application period opened on 30 September 2026 and closes on 28 February 2027. www.fca.org.uk
Separate the Three UK Regulatory Questions
An overseas business should assess three connected but distinct issues:
| Question | Assessment required |
| Can we provide the service? | Activity, asset, business and territorial analysis |
| Can we market the service? | Financial promotion rules and lawful communication route |
| What structure supports authorisation? | Applicant entity, governance, resources and supervision |
A favourable conclusion on one question does not automatically resolve the others.
For example, using an authorised firm to approve a promotion does not itself establish permission to perform the underlying service.
How Does the Expanded Regime Reach Overseas Firms?
FCA PERG 18.3 explains a two-stage territorial assessment: ordinary territorial principles, followed by relevant FSMA section 418 deeming provisions.
Important distinctions include:
- Section 418(6C): relevant trading, dealing and arranging involving UK consumers, with conditions concerning an interposed authorised principal dealer or platform.
- Section 418(6E): relevant safeguarding and staking arrangements for UK consumers, including conditions concerning direction by an appropriately authorised person.
- Section 418(6B): particular UK stablecoin issuance arrangements.
- PERG 18.3.7: reverse solicitation is not itself an exclusion or exemption.
- PERG 18.3.6: the overseas persons exclusion does not apply to the new regulated cryptoasset activities.
A UK consumer is an individual acting outside their trade, business or profession. Institutional relationships require their own analysis, including whether intermediaries serve consumers.
The practical consequence is that customer type and contractual chains matter alongside operational location.
Does Having UK Customers Require MLR Registration Today?
A complete guide to the VARA licence in Dubai for The current MLR framework must be assessed separately from the expanded FSMA regime.
The FCA explains that an overseas exchange allowing UK customers to open accounts does not automatically carry on business in the UK where it has no UK offices or agents. The actual circumstances remain relevant.
A firm should not take that example as a general conclusion covering future authorisation requirements or financial promotions.
For operations before October 2027, identify the present legal basis as well as the route required at commencement.
Does an Overseas Firm Need a UK Subsidiary?
The FCA’s FG26/7: Approach to International Cryptoasset Firms establishes a baseline expectation that firms requiring authorisation conduct their regulated cryptoasset activities from a UK legal entity.
It identifies specific circumstances in which an overseas firm serving customers through a UK branch may be considered for authorisation as a qualifying cryptoasset trading platform operator, including FCA assessment of comparable home-state regulatory protections.
This is an authorisation expectation that must be read with the legislation and applicable threshold conditions. It should not be reduced to either “every foreign firm must form a subsidiary” or “any foreign licence permits a UK branch”.
For a proposed structure, obtain advice on:
- The appropriate applicant;
- Activities performed by that applicant;
- Functions retained overseas;
- Customer contracting arrangements;
- Asset ownership and control;
- Supervisory access to information; and
- Financial and operational dependencies.
Why Incorporating a UK Company Is Insufficient
A company can be incorporated quickly while the operating model remains unresolved.
Consider an illustrative group proposing a UK subsidiary. Its website names the subsidiary, but overseas personnel control customer assets, approve onboarding and manage all incidents.
The application needs to explain those arrangements accurately. Management must decide which responsibilities belong to the applicant and how it supervises functions performed elsewhere.
The FCA’s threshold condition framework addresses effective supervision, appropriate resources, suitability and the business model. Its location condition also has a particular scope rather than functioning as a blanket rule for every applicant.
The structure should support real accountability, rather than merely provide a UK address.
How Customer Types Change the Analysis
“UK customers” is too broad a description for application planning.
Identify whether the business serves:
- Individuals investing personally;
- Companies trading for their own purposes;
- Funds and financial institutions;
- Brokers serving underlying clients; or
- Group companies performing onward services.
A contractual counterparty may sit between the overseas business and an underlying consumer. Assess its role and permissions rather than relying on its institutional label.
Practical preparation: Produce a customer and intermediary map showing the contracting parties, underlying recipients, transaction roles and regulatory status of each participant.
Can an Authorised UK Partner Resolve the Problem?
A UK partner may be relevant, but the arrangement requires careful analysis.
Different territorial provisions contain different conditions. A referral agreement, agency relationship or custody subcontract should not be treated as a universal solution.
Before relying on a partner, review:
- Its exact permissions;
- Its role in each transaction;
- Who contracts with the customer;
- Who exercises control;
- The instructions and responsibilities allocated; and
- Whether the arrangement satisfies the relevant statutory conditions.
The resulting advice should explain both the legal basis and the operational limits of the model.
Does a VARA or MiCA Licence Cover UK Market Entry?
An overseas approval may support the group’s explanation of its regulatory history, governance and existing controls. The UK application nevertheless requires an independent assessment for the VARA licence for crypto business in Dubai .
For example, a VARA-licensed group planning a UK service should compare its existing arrangements against the UK permission scope and requirements.
An EU-authorised business should undertake the same exercise rather than assume that its existing authorisation provides the UK route.
Useful preparation includes a requirements comparison identifying:
- Controls that can be adapted;
- UK-specific additions;
- Different contractual responsibilities;
- Resource implications; and
- Evidence requiring further verification.
Marketing to UK Consumers Is a Separate Workstream
The existing cryptoasset financial promotions framework applies to firms marketing to UK consumers, including overseas businesses.
Review the entire communication chain: websites, advertisements, influencers, affiliates, emails and linked customer journeys.
Where an authorised approver is used, examine the approval arrangements and scope. The FCA maintains specific guidance for crypto firms relying on section 21 approvers as the expanded regime approaches.
An approved advertisement should not be presented internally as approval of the whole business.
What Should an Overseas Firm Prepare for an Application?
The evidence should explain how the applicant operates within the international group.
| Document or evidence | Purpose |
| Entity and responsibility map | Identify who performs each function |
| Regulatory perimeter assessment | Establish activities, assets and territorial scope |
| Customer and transaction diagrams | Explain contracting, execution and settlement |
| Governance arrangements | Demonstrate decision-making and oversight |
| Group service agreements | Allocate shared-function responsibilities |
| Financial forecasts and funding evidence | Support resource planning |
| Custody and technology descriptions | Explain control and operational dependencies |
| Implementation records | Support claims about readiness |
The FCA’s application materials include general firm information and cryptoasset-specific sections driven by the business model.
Prepare these materials around the proposed UK model, rather than simply renaming an overseas application pack.
Plan for Authorisation and Business Continuity Together
Existing firms should assess the application window alongside any saving or transitional arrangements.
The FCA distinguishes qualifying continuation while an application is determined from restricted run-off of pre-existing contracts. Submission alone does not create unrestricted operating rights. www.fca.org.uk
A documented continuity plan should address onboarding, existing contracts, asset transfers, customer communications and supplier availability.
How CRYPTOVERSE Supports Overseas Crypto Companies
CRYPTOVERSE provides specialist legal and regulatory support for UK FCA cryptoasset authorisation and cross-border legal support for crypto and Web3 expansion .
Our support can include:
- Territorial and regulatory perimeter assessments;
- UK market-entry and applicant-structure reviews;
- Permissions mapping;
- Comparisons with existing overseas arrangements;
- Readiness assessments and remediation plans;
- Agreed business plans and compliance documentation; and
- Application and regulatory correspondence support.
Planning to serve UK customers from an overseas crypto group? Request a UK market-entry assessment from CRYPTOVERSE before finalising the structure.
FAQs
1. Does having no UK office avoid FCA authorisation?
No. Relevant territorial deeming provisions can capture overseas activities involving UK consumers.
2. Can we rely on reverse solicitation?
It is not, by itself, an exclusion or exemption from the new regulated cryptoasset activities.
3. Are institutional-only models automatically outside scope?
No. Assess ordinary territorial principles, the specific activities and any intermediary relationships.
4. Is a UK branch always acceptable?
No. The FCA’s international-firm guidance establishes a baseline UK-entity expectation and describes particular branch circumstances.
5. Should we assess marketing before launch?
Yes. Financial promotion compliance is a separate requirement and can already apply.