Paypal is shifting its European operations to Luxembourg. Currently paypal operations in the European opinion are serviced by Paypal Europe, which is a UK based company authorised by the Financial Services Authority.

This move will take place on the 2nd July, which means that all clients in the EU will be served the Luxembourg entity, which has been approved as a bank by the Luxembourg version of the FSA.

Whether or not this means that additional countries will come under the new regime is a question which still remains unanswered.