Freedom to provide services (LPS)
The ability for an institution to operate in another European Economic Area state without a permanent establishment there. It is the occasional counterpart to freedom of establishment: you act from your home country, with no local branch. Useful for a broker handling occasional cross-border files.
Key points
- Allows operating in another EEA state without creating a permanent presence there.
- The broker acts from France under their French license, no local license required.
- Suited to occasional cross-border files, not regular commercial activity.
- Notification to the ACPR needed to trigger the European passport procedure.
Frequently asked questions
Can a broker put together a file for a client residing in Belgium from their French office?
Yes, under freedom to provide services, provided the prior notification to the ACPR has been completed and the activity remains occasional. If the firm regularly serves Belgian clients, it should instead opt for freedom of establishment to secure the activity long-term.
Why is LPS useful for brokers specializing in expat files?
Brokers supporting French nationals temporarily based abroad for a property purchase in France often deal with clients residing in another EEA state. LPS allows them to manage these files from their Paris office without creating a foreign structure, significantly reducing costs and administrative complexity.
What mistakes should be avoided when operating under the LPS regime?
The main mistake is handling large volumes of clients in the same foreign country without switching to freedom of establishment, which authorities might reclassify as undeclared permanent commercial activity. You must also ensure that contractual documents comply with the host country's consumer protection rules, even if the license remains French.
In practice
A Paris-based broker assists a French couple expatriated in Amsterdam in buying their primary residence in the Île-de-France region: they act under LPS from Paris, without setting up an office in the Netherlands, after notifying the ACPR of their intention to operate occasionally in Holland.
Official sources
- Freedom of establishment and to provide services (CMF) · Légifrance
- Article L519-1 of the Monetary and Financial Code · Légifrance
- Prudential supervision and resolution authority · ACPR (Banque de France)