Germany holds a leading position in technological and industrial sectors, it ranks fifth in terms of living standards. Therefore, it is a prestigious place for doing business.
Among others, German businessmen focus on the service sector, especially financial ones.
WHO NEEDS A FINANCIAL LICENSE
A financial license is required for businesses that:
accept cash deposits;
provide loans (credits);
trade-in (exchange) foreign currencies;
provide factoring and leasing services;
carry out brokerage activities;
redeem receivables;
sell and buy financial instruments;
advise on financial transactions;
provide payment services (PSP/EMI).
The financial license is issued by BaFin (Federal Financial Supervisory Authority). The German authorities carefully check all documentation, which is why the licensing process takes 3–6 months.
REQUIRED DOCUMENTS
To obtain a license, you must submit an application, attaching the following documents:
a business plan indicating the projected budget;
a business model;
the address of the head or registered office;
the description of the company structure;
information about directors and principal shareholders and the extent of their contributions, and about their compliance with the requirements of the law (competence, reputation, etc.);
proof of the required capital.
Be sure to indicate the types of planned services (activities), the legal form of doing business, internal control systems, management, and accounting mechanisms.
The license holder can be either an individual or a legal entity, depending on the legal form of the enterprise. For an open trading partnership, each participant taking an active part in the company management must obtain a license. In limited liability companies and joint-stock companies, a document is issued to a legal entity.
A financial license obtained in Germany provides an opportunity to conduct business in all the EU countries. But keep in mind that it is issued for certain financial services. When expanding the company’s activities, a new permit will be required.
Companies engaged in financial activities without an appropriate license are subject to penalties, including fines, further, imprisonment for up to 3 years may apply to their founders /directors, as well as restriction, and prohibition of the enterprise activity.
For enterprises that have received licenses, compliance with all the rules for financial activities, including the fight against money laundering, is mandatory.
CAPITAL REQUIREMENTS
Capital requirements are determined on a case-by-case basis, depending on the specific type of license and services provided.
CRYPTO-EXCHANGES LICENSING
Cryptocurrency-related trading and brokerage activities are also subject to licensing, including the exchange of cryptocurrencies for fiat money and vice versa. Those who use cryptocurrency as a means of payment do not need a license.
If you plan to enter the German financial market, COREDO team will assist in obtaining a license. Our specialists will provide detailed consultations, answer all questions, prepare the necessary documents, and will accompany you throughout the entire process.
