Regulatory Alerts2005-04-05
Notes on Licensing for Cross-Border Banking Business and Financial Services in Germany
The German Federal Financial Supervisory Authority (BaFin) mandates that foreign entities commercially targeting the domestic market must secure a license under Section 32(1) of the German Banking Act, typically through a subsidiary or branch. Licensing obligations hinge on whether services are actively marketed or passively requested, with statutory exemptions available for institutional and private client transactions brokered via German or EEA institutions. Eligible foreign entities must obtain home-country supervisory confirmation, appoint a German receiving agent, and submit detailed written applications to secure case-by-case exemptions from full licensing requirements.
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