Fintech Consulting & Licensing Support in Germany

Germany has a diversified and broad fintech landscape with around 639 active fintech companies, out of which seven have grown to unicorn status, making the German fintech market a fast-paced and well-developed eco-system; the fintech land of Germany covers all forms of fintech sectors if you aspire to be a fintech giant Germany could be an ideal choice. Enterslice can fulfil your aspirations of becoming a German fintech giant by finding the right investors for your business, supporting you in your marketing and sales initiative, planning and managing your entry in the German fintech marketplace, finding the right international partners for you and evaluating and recommending accelerator & incubator programs for you, we have a well-qualified internal team of experts who will walk you towards becoming a licensed fintech company of Germany.

What Is a Fintech and It’s Licensing

Finance and technology, when adjoined, become a fintech. Any business that uses technology to enhance and automate its financial services-oriented products and processes is a fintech business. Today, a fintech business model is any technologically enabled financial innovation that might produce new business models, applications, processes, or products that can affect the financial market. Due to stringent consumer protection rules, these fintech business models can't be part of the public domain without obtaining authorisation from the regulatory authorities; this authorisation generally is in the form of licensing, which gives the right businesses to have innovative fintech models to introduce in the public domain.

Each nation has separate policies regarding fintech licensing, and an entity willful of obtaining the exact needs to register them according to the local laws. These licensed fintech entities rely on electronic channels for their distribution, making cross-border interactions and outsourcing products easy, converting the global market into a unified marketplace.  

With Enterslice, Embrace Your Journey as a Fintech Licensed Company By

Preparation

With Enterslice, be prepared to procure a fintech license without challenges.

Deliberation

We will strategise and discuss your business plans to seek out your quality areas, which could highlight your license application.

Conviction

If you need a consultant who holds strong beliefs and trust in your business model, then Enterslice could be your go-to consultant. Our team, with firm conviction, leads the journey of fintech licensing.

Enterslice Fintech Licensing Services Making Your Business

Projected

With the help of Enterslice, make a sustainable plan, calculated effort, and value proposition that could help project your business the right way.

Reasonable

Enterslice doesn’t believe in the policy of exaggerating and making worldly plans for its clients; we believe in a reasonable approach and follow compliance to compliance formula for fintech licensing in Dubai.

Practical

At Enterslice, we believe in doing something rather than just rambling on random ideas; we make sensible and working plans to make license claims and have a firm foot in front of regulatory authorities.

Feasible

It will be our responsibility to make your company technologically enabled by making your existing operating model sound enough to fill the gaps in existing technology.

Challenges Faced by a Fintech Business in the German Fintech Setup

Technology Neutral Approach

Young startups find it difficult to be part of the technology-neutral approach that the German regulations pertain to because, initially, startups need an extra push, which, at times, they couldn’t get in Germany. Well-established companies keep on gaining significant funding in comparison to new startups.

Enormous Costs Before Market Entry

The licensing requirements for the German fintech market attract enormous costs, from the Paper works process to the requisite legal advice, which is a compulsion upon the fintech companies to abide by before applying for the license. Such prerequisites attract heavy fees even before the licensing procedure, making it difficult for new entrants to fulfil such mandates.

 No Sandbox to aid innovation

Like most nations, before applying for a fintech license, a fintech company can spread and become part of a fintech regulatory sandbox. Still, there is no such provision of sandbox in German financial company regulations, adding risk for new entrants because they need to introduce their fintech business plan directly to an open market.

Compliance with Data Protection Laws

Any entity operating as a fintech company in Germany needs to comply with the data protection laws of the European Union, such as the (EU) 679/2016, which protects natural persons from the processing of personal data and the free movement of such data. These data protection laws are vital for any entity to operate their business in Germany, which, at times, is difficult for a startup to comply with due to the heavy structuring of general data protection regulations (GDPR).

Benefits of Establishing a Fintech Industry in Germany

Favorable Regulatory Environment

In 2018, the president of the BaFin, Felix Hufeld, gave a statement showcasing the approach of German fintech regulators towards blockchain technologies in which he said such technologies must not be undermined by over-burdensome regulation which signifies the approach of regulators towards new fintech technologies, in 2021 the law on electronic securities was passed allowing the issuing of electronic securities, the introduction of EU Wide regulation of crowdfunding platforms and directives for crypto assets. Initiatives like this showcase the pro-innovation regulatory environment that Germany proposes to new and established fintech industries.

Advance fintech infrastructure

The fintech infrastructure of Germany is quite advanced in comparison to other countries. The factor behind the same is talent because Germany has an internationally recognised education system and various financing options aiding innovative business models, accelerators, and incubators focusing on their fintech activities. The co-working space facility and supportive regulations are all available in Germany, making it a country with rich fintech infrastructure.

Diverse fintech segments

In comparison to any other nation, Germany has diversified and advanced fintech segments that involve financing, including crowdfunding, which could be donation-based, reward-based, or crowd investing and crowd lending, asset management systems including robo-advice, social trading, personal financial management and investment and banking, payment services including alternative payments methods, blockchain and cryptocurrencies and other fintech services such as insurance, search engines, and comparison sites, technology, IT and infrastructure, etc.

Overview of the German Fintech Industry

The financial technology market, i.e., the fintech market of Germany, has shown remarkable growth in the past five years. Political issues at the European and global levels and the pandemic disturbed the business territory globally. Still, despite that, the German fintech market achieved record figures. According to recent surveys by different fintech accelerators, three out of ten leading financial service businesses are fintech companies based on their valuation. It was noticed that by the end of 2022, Germany had 32 unicorn startups, including fintech neo-banks, neo-brokers, insurtech, and banking software providers. The fintech eco-system of Germany is such that right from regulatory authorities to politicians all hold intensive fintech-related discussions, the proof of which is the launch of a fintech innovation hub by BaFin, i.e., the German federal financial supervisory authority. The German Federal Ministry of Economic Affairs and Climate Action 2013 has set up an INVEST program to help startups raise venture capital. The German federal government has also established a national future fund with several building blocks to support the various development phases of innovative technology companies. These initiatives are examples of the pro-development approach of the German regulators and the government in aiding fintech within Germany's financial landscape.

How Enterslice’s Backing Can Make You Acquire Fintech License in Germany

Business Model Analysis & Support

The regulations for fintech businesses in Germany for any form of license need a dedicated and commercially organised business plan for the establishment of a fintech industry within the region; the regulations specify how comprehensive catalogues are to be published by the fintech entity along with the list of services it is planning on providing. Enterslice will assist you in outlining your business plan, and our team of experts will help you form a decent catalogue suitable to establish your entity in the marketplace and the one that could detect the needs of the consumers.

Legal & Compliance Assistance

The types of licenses according to your fintech business model require compliances such as AML and CFT along with the mandates of German financial supervisory laws and the legal requirements that these fintech models need to abide by if they are willful of obtaining their fintech license without any delay. Our team of legal experts can assist you with this legal and compliance support because if you are planning on conducting multiple fintech businesses, then you will need to make your industry compliant with various laws, the nature and compliances of which are different and need someone expert to decode and make the organisation move in the right direction.

Passporting Assistance

If you are a foreign fintech business entity willful of conducting your business in Germany and actively targeting the German fintech market, in that case, you need to obtain a European passport which regulates services such as banking business, investment services, payment services, crowdfunding services, you will need assistance from someone like the team of experts at Enterslice who understands the intricacies attached with the passporting dynamics.

Fundraising and Investment Support

The crowdfunding service providers in the European Union have been subject to a single regulatory regime since 2021, as stated in ECSPR, and any fintech startup must acquire funding from a suitable investor. Our team at Enterslice has expertise in ECSPR regulations and has assisted many fintech businesses in attracting decent funding. You connect with us, and let us connect you with genuine investors.

Tax Compliance Protocols Assistance

Taxation is the very basis that decides the longevity of any business. Enterslice has expertise in dealing with taxation-oriented protocols. We will help you understand the taxation dynamics of German regulatory authorities.

Fintech innovation hub protocol assistance

BaFin Germany has an approach to following digital transformation, and such is the initiative of establishing a fintech innovation hub in the territory of Germany to aid German companies, foreign or local. Enterslice will help you get through this fintech innovation hub in Germany to make your business thrive without any hassle in the German region.

The Federal Financial Supervisory Authority (BaFin)

There are no specific regulations for fintech licensing in Germany, and they are included within the framework of the general rules applied to financial companies in Germany. The Federal Financial Supervisory Authority (BaFin) supervises and makes rules and regulations for banks, financial service providers, insurance undertakings, and securities trading. It is an autonomous public-law institution that comes within the supervision of the federal ministry of finance; it is the duty of BaFin to function in a manner that risks to the German financial system could be limited and mitigated at the national and international level. It ensures that the financial centres in Germany are working efficiently.

Federal Banking Supervisory Office

The licensing requirements for a fintech in Germany are per different regulations based on the type of fintech business an entity conducts within the region. A banking business or any other commercial financial service in Germany needs to obtain a written license from the Federal Banking Supervisory Office, which is entitled KWG(Kreditwesengesetz), Act which is the banking regulation of Germany, the regulation for investment and securities-related services within the ambit of Securities Institutions Act (WpIG) implementing Directive (EU) 2019/2034 which issues directives that are needed to be followed by local or foreign fintech industry involved in investment activities such as the finance commission business, issuing business, investment brokerage, investment advice, contract brokerage, operation of a multilateral trading facility, operation of an organised trading facility, placement business, financial portfolio management, and proprietary trading.

Enterslice Licensing Services

necessary paperation Assistance- Our fintech experts offer easy and hassle-free Paper works guidance with checklists and updated formats occasionally.

Compliance Support- establishing a cross-border fintech industry involves multiple compliances, which, when not followed in a proper pattern, cause delays in the licensing process. Our legal team will help you in systematic compliance formulation along with time-to-time compliance support per the regulation changes.

Expert Guidance- We customise fintech strategies per your company's business model. To achieve the same, we assign a dedicated fintech expert who will provide expert guidance and support and help you make the right decisions for your company.

Financial Service Sectors of Germany

German fintech marketplace combines traditional financial services with the new generation technology base. The significant sectors that the fintech Germany ecosystem allows are the capital raising sectors such as crowdfunding, peer-to-peer lending, blockchain, payment services, investment advisory services, and insurance services. 

crowdfunding platform

If you are a fintech company interested in obtaining funding from a German crowdfunding platform, you need to contact the German crowdfunding platform and develop a funding case along with the marketing strategy; once your funding case is designed and advertised, the potential investors provide funding assistance to one or more companies.  The fintech company obtaining investment from a crowdfunding entity needs to be cautious about the legal status of the platform, i.e. the crowdfunding platform must have a payment services license like a payment service provider under the German Payment Services Act (Zahlungsdiensteaufsichtsgesetz).

Peer-to-peer lending platforms

Peer-to-peer lending platforms are slightly more complicated than crowdfunding platforms because lenders and borrowers are generally the customers. This platform is slightly on the backhand due to better conditions provided by the traditional banks.

payment-related services

The payment-related services are within the ambit of the Payment Services Supervisory Act (Zahlungsdiensteaufsichtsgesetz), known as ZAG. This Act has provisions related to payment services in Germany. This act includes payment platforms in the financial (funds) transfer business, payment initiation services, account information services, and e-money businesses.

Types of Fintech Licenses in Germany

License to Conduct Business

Any entity, local or foreign, that has a business plan, and an intent to carry out banking business or any other commercial financial service in Germany needs to obtain a written license from the federal banking supervisory office entitled under article 32 of the KWG(Kreditwesengesetz), Act which is the banking regulation of Germany.

Under this Act, the license application must be accompanied by the list of evidence of resources required for business operations, with the name of managers, professional qualifications of the management pupil and proprietors, and a business plan viable enough to show the nature, organisational structure, and internal monitoring procedures.

Investment services license

Section 15(1) of the Securities Institutions Act (WpIG) implementing Directive (EU) 2019/2034 introduced directives that are needed to be a licensed entity within Germany fintech businesses involved in investment activities such as the finance commission business, issuing business, investment brokerage, investment advice, contract brokerage, operation of a multilateral trading facility, operation of an organised trading facility, placement business, financial portfolio management and proprietary trading.

Payment services license

The payment services for any financial business in Germany are regulated within the German Payment Services Supervision Act (ZAG), which coordinates the supervision of payment services and e-money businesses in the territory of Germany, section 10(1) of the Act, which has the provision of operational and closely related ancillary services, i.e. execution of the payment transactions, foreign exchange transactions, data storage and data protection oriented services, custodian services involved in fintech businesses.

Capital management company and trading business license

The capital management company license is part of section 20 of the capital investment code (KAGB) of the BaFin, within which the financial supervisory authorities limit and permit the management of investment funds. It includes the entities conducting their business within the territory of Germany and the entities moving their registered office from a foreign territory to Germany. Any person or business establishing its business for the brokerage of loans, insurance contracts, and other financial products needs to obtain a Trading business license under sections 34c, 34d, and 34f of the Industrial Code (GewO).

Payment Services Supervision in Germany

Payment services related to local and foreign businesses are part of the German Payment Services Supervision Act (ZAG), which coordinates the supervision of payment services and e-money businesses in the territory of Germany; this Act has the provisions of operational and closely related ancillary services, i.e., execution of the payment transactions, foreign exchange transactions, data storage and data protection-oriented services, custodian services involved in fintech businesses. The fintech business engaged in the capital management-related fintech business comes within the ambit of the capital investment code (KAGB), within which the financial supervisory authorities limit and permit the management of investment funds. It includes entities conducting business within Germany and moving their registered office from a foreign territory to Germany. Fintech businesses involving brokerage of loans, insurance contracts, and other financial products must obtain a license under the Industrial Code (GewO).

Our commitment to you

Goal-based outcomes

At Enterslice, we value our clients' time and resources; therefore, we derive goal-based strategies to streamline our operations to achieve the same.

Consistency

We have a dedicated team of experts who know how to remain committed and objective and have the skills to settle a business.

Balanced approach

We aim to achieve the right balance for our clients' businesses, especially when it concerns the fintech industry.

Our success story

We have 10+ years of experience in the fintech domain along with licensing, company establishment, and other legal compliances; our journey is full of success stories that we achieved through these years by making the right decisions for a budding or an established fintech business in Australia.

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Hassle-free Fintech license procurement with Enterslice Fintech licensing services

Fintech licensing services must be availed by every fintech entity, especially when establishing it in a foreign country because licensing rules vary worldwide. A potential and strategic fintech licensing plan ensures easy license procurement because, in most nations, rejection of the license results in delay and add-on controls and compliances.

With the help of our consultation and advisory, you can focus on building the core of your fintech business. At the same time, we will ensure the developing license compliance per the regulatory framework.

Why choose us

Vision & core values

We have faith in your trust, and we can do anything to keep your trust intact; we engage the community without staking our core values and vision.

Customer-centric services

We understand that the core of any business is its employees; our team of experts are polite and competitive and responds efficiently to the queries of each customer; our belief is to develop long-term and trustworthy relationships.

Convenient and consistent

We provide our clients with an environment that is convenient and consistent for them. We work without friction and with the ties of trust and credibility.

Reputed & trustworthy

If you go by word of mouth, all our clients give positive feedback for our services, making us a reputed and trustworthy organisation.