When new financial service providers want to approach German clients, the first question that always comes up is the licensing requirement: Do I need a BaFin license/BaFin permit for my activity?
BaFin is the German Federal Financial Supervisory Authority. Financial supervision in Germany is a complex endeavor. Numerous EU-directives (such as the AIFM-directive) and administrative provisions (such as MaRisk and MaComp) do exist. In addition to relevant German laws, companies and entrepeneurs entering the German/European market should determine if they require a banking license to operate their business.
The BaFin is Germany's financial regulator, i.e. it regulates Germany's financial world. By now, the majority of activities in the banking sector require a BaFin license. Small companies do, at times, offer services for which they would require a BaFin license - without having one. Doing so is punishable under German law and we strongly advise against it.
The best way to avoid any issues with the BaFin is checking before starting operations in Germany. An experienced and qualified financial regulation lawyer can prove as a great advantage. However, at times, companies are offering financial services without a valid BaFin-license and get contacted by the BaFin. We can help with such cases as well.
Please also note that a BaFin license is often valid for just the particular purposes you listed in your application. Chances are, you need a new license when offering new financial services.
Bitcoin businesses & crowdfunding platforms might also need a BaFin license. This depends on their business model and the German Payment Services Regulation Act (Zahlungsdiensteaufsichtsgesetz, ZAG). New currencies, such as Bitcoin or other virtual currencies are classified as financial instrument, or precisely as units of account by the BaFin. If you are trading with such coins in a professional manner, chances are high that you require a BaFin-license. This also applies for setting up a FinTech business in Germany.
WINHELLER is acting as a legal advisor to the German branch of the Dutch crypto currency exchange LiteBit in the BaFin licencing proceedings for both proprietary trading and the crypto custody business. Learn more
If a financial service provider pursues unauthorized business, this is usually brought to the attention of the company by a letter from BaFin and a statement is requested. The provision of banking transactions, financial services or payment services without the required permit can have serious consequences for the companies concerned and the persons acting:
The costs for applying for a BaFin license can vary greatly. In addition to the lawyer's fees, there is also a processing fee at the licensing authority itself, the amount of which is determined by the annex to the so-called FinDAGKostV. The amount of the fee depends on the specific financial services or banking transactions for which a license is sought.
In our experience, the fee charged by the supervisory authority for a license pursuant to Section 32 (1) of the KWG ranges between EUR 2,000 and EUR 17,000 in the case of licensing procedures for financial services, while the range for the granting of a license for banking transactions is between EUR 5,000 and EUR 20,000.
If, on the other hand, a license is only granted for the provision of
the BaFin fee is a uniform EUR 2,600. In the case of extensive license applications, the fee may also be higher. The amount of the lawyer's fees, on the other hand, depends to a large extent on the time required for coordination and correspondence with the client on the one hand and the authority on the other.
You would like to submit a license application? Our team will prepare your application together with you in such a way that confirmation by the supervisory authority is assured. Thanks to our many years of experience, we know exactly what conditions the BaFin and the Bundesbank impose on a license application. Provided your cooperation, we will prepare the application in such a way that it is guaranteed to be approved by the authorities.
We will be happy to answer your questions on +49 69 76 75 77 80 or email@example.com.
We help you examining if your buisness requires a license and prepare you as good as possible to obtain one, by elaborating on points such as:
You should also know that consultation regarding capital markets investments requires you to observe certain documentation laws. Money laundering, authentification (both are part of KYC - Know your customer) and risk management are further important points.
Our advisors are looking forward to addressing any question regarding financial regulation in Germany, including BaFin licenses. Your contacts are
You can contact us via e-mail (firstname.lastname@example.org) or by phone (+49 69 76 75 77 80).