An authorization of the German Federal Financial Supervisory Authority (BaFin) is required to provide commercial banking or financial services in Germany. However, it is not always necessary to establish a company in Germany and go through an elaborate licensing procedure with the German regulatory authorities for banking in Germany.
Banks and financial service providers licensed in a member state of the European Economic Area (EEA) may, under certain conditions, use their home country license to also offer their services in Germany via the so-called European passport. EEA members include, for example,
Separate licensing in Germany is not necessarily required for corporate holders of a European passport if a branch is established or cross-border services are offered. The European passport allows companies to use their EEA license to access the German financial market.
Since the implementation of the Second EC Banking Directive of the European Council of December 15, 1989, the home state of banks has played the leading role with regard to ongoing supervision. The supervisory authorities of the host state - in Germany, BaFin and the German Bundesbank - have only limited powers:
While EEA institutions may conduct business in Germany without BaFin authorization, compliance with other German laws will obviously be required. Among others, corporate EU passport holders need to observe the provisions of the German Money Laundering Act and large portions of the German Securities Trading Act in order to offer legally compliant contracts. It is an absolute necessity to obtain extensive legal advice from a specialized law firm when entering the German market.
We advise and support EEA banks and financial service providers, whether cross-border services are offered or a branch is established on the German market. Our attorneys specializing in banking law and capital markets law advise comprehensively and ensure that the German market is entered in a legally compliant manner. We advise on all aspects of the European banking passport.