Topic Authorisation requirements Authorisation and permission to provide financial services

Anyone conducting insurance or banking business, providing financial or payment services, or intending to manage investment funds in a manner subject to an authorisation requirement in Germany needs prior written permission to do so. With the exception of authorising deposit-taking credit institutions, which is the responsibility of the European Central Bank (ECB), such authorisation is issued by BaFin.

The conditions for the authorisation requirement and the authorisation procedure are regulated by the German Banking Act (KreditwesengesetzKWG), the German Insurance Supervision Act (VersicherungsaufsichtsgesetzVAG), the German Payment Services Supervision Act (ZahlungsdiensteaufsichtsgesetzZAG) and the German Investment Code (KapitalanlagegesetzbuchKAGB).

The authorisation requirement also applies to persons and undertakings that do not maintain any branch or other physical presence in Germany and that wish to conduct their business solely within the scope of the cross-border provision of services. It therefore also applies irrespective of whether the business activity in question is conducted solely in Germany for customers in Germany, is conducted from abroad for customers in Germany or is conducted from Germany for customers abroad.

Whether or not intended business activities are permissible and are subject to an authorisation requirement should be clarified in advance with BaFin. BaFin has far-reaching powers to intervene against prohibited business activities and such activities are also punishable by law.

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