Obtaining a Forex license in Germany - YB Case 2024

Obtaining a Forex license in Germany: advantages, difficulties, opportunities

Obtaining a Forex license in Germany: advantages, difficulties, opportunities

One of the most desirable legal environments in Europe for business, including acquiring a forex license, is Germany. The nation has the biggest economy in all of Europe. It is a good candidate for jurisdiction because of its established infrastructure, highly trained labor force, and stable political environment. Furthermore, as a European Union member, Germany offers businesses access to a market with a population of over 450 million people. If you opt to enroll a forex enterprise, there are numerous opportunities to expand your business.

Forex business in Germany

Doing business in Germany is attractive due to the following advantages:

  • Highly skilled workforce: Germany boasts one of the most skilled workforces in the world.
  • Developed Infrastructure: The country has an excellent infrastructure, including transport network, telecommunications and energy.
  • Germany is a member of the European Union, which gives access to a developed business market.
  • Government support: The German government offers a number of support programs for small and medium-sized businesses.
  • A stable economy that creates favorable conditions for investment.
  • The forex market is regulated by strict requirements, which guarantees reliability and safety for investors.
  • Digital economy: the country is one of the leaders in the development of the digital economy, which opens up new opportunities for companies involved in Internet technologies.


  • High taxes: the country is known for having one of the highest tax systems in the world.
  • Bureaucracy: the process of starting and running a business can be complicated by bureaucratic procedures.
  • Competition: the German market is highly competitive, which means it can be difficult for new firms to break into.
  • Obtaining a forex license is a rather complicated and lengthy process.
  • Forex brokers in Germany must have a large authorized capital.
  • Forex companies undertake to provide the regulator with detailed reporting on their activities.

Germany is an attractive market for forex brokers, but opening and running a business in this country poses a number of challenges.

Requirements for Forex brokers in Germany

There are a number of requirements for forex brokers in the country:

  • Forex brokers must obtain a license issued by BaFin (Federal Financial Supervisory Authority).
  • Forex brokers are demanded to have significant statutory capital: €25,000 for GmbH (Gesellschaft mit beschränkter Haftung, or LLC) and €50,000 for AG (Aktiengesellschaft, or JSC). This requirement aims to ensure that brokers possess adequate financial resources to fulfill their obligations to clients.
  • Brokers seeking licensure must furnish BaFin with an array of documents, encompassing a business plan, financial scheme, particulars regarding company beneficiaries, certifications validating staff qualifications, internal corporate policies and procedures, risk management protocols, AML/CFT control systems (forex brokers are mandated to adhere to legislation combating money laundering and terrorism financing).
  • The personnel must be qualified.
  • Forex brokers are required to have effective risk management systems.
  • Regular reporting to BaFin is required.
  • Companies must protect the interests of their customers and provide them with honest and transparent information.

The requirements for Forex firms are quite high. So, collect as much detailed information as possible about the process of acquiring a forex license and enlist the support of qualified lawyers.

How to start a Forex business in Germany (step-by-step plan)

We present you a step-by-step plan for opening a business in Germany:

  1. Create a legal entity. To do this, you need to select the legal form of your company (GmbH, AG or other) and register it with the relevant authorities.
  2. Open a bank account in the name of your forex company in Germany.
  3. Develop and write a detailed business plan that will describe all your tasks and all your business activities.
  4. Apply for a forex license from BaFin and comply with all requirements.

Advantages and features of purchasing a forex license in Germany

Obtaining a Forex license in Germany is associated with a number of advantages, but also has some features:

  • Reputation and trust: a forex license in Germany is a prestigious mark of quality that allows a company to gain the trust of its clients and partners.
  • Legal activity: this license allows the company to legally carry out forex activities in accordance with German law.
  • Market access: a forex permit grants entry to the German forex market, which ranks among the largest and most liquid globally.
  • Customer protection: Forex brokers are obligated to safeguard the interests of their clients. This entails furnishing clients with fair and transparent information, ensuring equitable and honest trading conditions, safeguarding client funds, and promptly resolving any potential disputes.
  • Financial stability: obtaining this license requires the company to maintain a certain level of capital, ensuring its financial stability.
  • The process of obtaining a forex license in Germany is complex and lengthy.
  • BaFin imposes strict requirements on forex firms in terms of capital, management, reporting, and so on.
  • High costs: obtaining and maintaining a forex license in Germany comes with quite high costs.
  • The Forex company is required to comply with changes in German legislation.
Deciding whether to obtain a forex license in Germany depends on a number of factors:
  • Size and structure of your company
  • Amount of your investment
  • Your business goals
  • Your willingness to bear high costs
  • Your ability to meet stringent requirements

It is important to meticulously analyze all factors before making a decision. We recommend consulting with a lawyer specializing in forex activities to obtain professional advice on this matter. Obtaining a forex license in Germany is a significant step that requires careful preparation and substantial financial investment.

Time frame for obtaining a forex license in Germany

The time frame for obtaining a forex license in Germany can vary significantly depending on several factors:

  • Application complexity: the more complex the application, the longer it will take BaFin to review it.
  • Quality of the prepared documents: if the documents are incomplete or contain errors, BaFin may return them for revision, which will result in a delay in obtaining a license.
  • BaFin workload: during periods of increased workload, applications may take longer to process.
On average, the process of obtaining a forex license in Germany takes from 6 to 12 months.

Here are some steps in the process that may affect how long it takes:

  • Application submission: the license application is electronically filed via the BaFin website.
  • Application scrutiny: BaFin undertakes a comprehensive examination of the application and its accompanying paperwork.
  • Seeking supplementary details: BaFin might ask for further information or documentation from the applicant.
  • Face-to-face consultations: occasionally, BaFin might arrange in-person discussions with the applicant's representatives.
  • Determining outcome: BaFin reaches a decision regarding whether to grant or deny the license.

The time frame for obtaining a forex license may vary in each specific case. It is recommended that you apply for your license in advance to allow sufficient time to complete all steps of the process.

Choosing a legal form for a forex company in Germany

In order to receive a forex license in Germany, one must carefully prepare, adhere to stringent regulatory criteria, and incur substantial financial fees.

Selecting a legal structure for your German forex company is a crucial choice that will affect taxation, reporting, and administration, among other areas of your company.

Here are several of the most renowned legal structures for forex companies in Germany:


The most commonly utilized legal structure in the country for small and medium-sized businesses is this one. It represents a separate legal entity from its owners. Consequently, in this scenario, investors are only responsible for their own financial input to the firm, and the firm is accountable for its obligations using its resources.

GmbH advantages:
  • Restricted accountability is the primary benefit.
  • The establishment procedure is straightforward.
  • It can be tailored to owners' preferences.
  • Initiating and managing a GmbH is low cost.
Disadvantages of GmbH:
  • Compulsory bookkeeping: GmbHs are required to keep financial records in line with German regulations.
  • Obligatory yearly shareholder assemblies: GmbHs are mandated to conduct annual gatherings of shareholders.
GmbH management:
  • Managers of the GmbH are chosen by their fellow members.
  • The daily activities of the company are within the purview of managers.
  • Every year, members get together to elect executives and approve the annual accounts.

The GmbH structure is recognized as a favorable option for business owners seeking to cap their financial accountability and establish an adaptable operational framework.

Joint stock company (AG):

Its legal structure is more intricate than a GmbH's. AG's investors are not the same legitimate entity as AG itself. In this scenario, shareholders are solely liable for the sum they infused to the company's equity; the entity shoulders liability with its holdings.

Upsides of AG:
  • Ease of raising capital: can raise capital by issuing shares.
  • Higher prestige: considered more prestigious than GmbH.
  • Flexibility of structure: may have a more complex management structure than a GmbH.
  • Possibility of listing on an exchange: AG shares can be listed on an exchange.
Disadvantages of AG:
  • AG has a more complex structure than GmbH.
  • Setting up and running an AG is more expensive than a GmbH.
  • AGs must comply with stricter reporting requirements than GmbHs.
AG Control:
  • A monitoring board and executive boards are in charge of the company.
  • The organization's day-to-day operations are overseen by the executive board.
  • The Executive Board's actions are supervised by the Monitoring Board.
  • Every year, the monitoring board is appointed, and the annual financial statements are approved by the shareholders.

AG is viewed as an advantageous option for substantial enterprises seeking to secure significant capital infusions and maintain intricate governance structures.


This is a simple and inexpensive legal form for doing business in Germany.

Partnerships come in two primary forms:
  • Civil Law Society (GbR, Gesellschaft bürgerlichen Rechts) is the simplest type of partnership.
  • Open trading company (OHG, Offene Handelsgesellschaft) is a more complex type of partnership than GbR.
Benefits of partnership:
  • Forming a partnership is a pretty easy process.
  • Managing a partnership doesn't cost much.
  • Adaptable to the partners' needs might be set up.
Disadvantages of partnership:
  • Unlimited Liability - Some partners may have unlimited liability.
  • Managing a partnership can be complex if there are many partners.
  • Limited opportunities for raising capital.
Partnership Management:
  • The partnership is managed jointly by all partners.
  • Each partner has the right to vote on all matters.
  • Decisions are made by majority vote.

A partnership can be a good choice for small forex companies that want a simple and inexpensive legal form.

UG (form of LLC) in Germany:

In Germany, a sort of GmbH known as a UG (Unternehmergesellschaft) is distinguished by a lower minimum share capital. It's a relatively new legal structure for companies in Germany. It was first presented in 2008 as a simple and affordable substitute for GmbH.

UG boasts a range of attributes that render it appealing to small forex companies:
  • Minimum share capital: just one euro is needed as a minimum share capital.
  • Ease of creation: it is rather simple to develop UG.
  • Low cost: comparatively cheap to install and keep up.
  • Flexibility: when setting up the UG, the owners' requests may be taken into consideration.
However, UG also has a number of limitations:
  • Profit distribution restriction: the owners may only receive 75% of the company's profits; the remaining 25% must be utilized to raise authorized capital, up to a maximum of 25,000 EUR.
  • Prohibition on alteration of name: company cannot alter its designation throughout the initial 5 years following registration.
UG might be a wise option for little forex firms that:
  • Their goal is to start a business quickly and cheaply.
  • In the initial years, don't anticipate big earnings.
  • The name of the firm will not be changed anytime soon.
It is important to emphasize that a UG is not appropriate for businesses that need a lot of funding, want to pay out earnings to investors in the first few years, or want to rebrand their business soon.

Company form

Minimum authorized capital

Limited liability

Difficulty level




25 EUR



  • Limited liability of participants
  • Easy to create and manage
  • Access to finance
  • Ideal for businesses that have several members
  • Registration in the commercial registry is required.
  • Accounting
  • Limited ability to pay dividends in the early years





  • Smallest required starting capital
  • Easy to create and manage
  • Limited liability of participants
  • Less attractive to investors than GmbH
  • The need for reserve capital
  • Restrictions on dividend payments


50 EUR



  • Limited liability of shareholders
  • Access to capital through share issue
  • Ideal for big businesses
  • Complex management framework
  • Exorbitant creation and enrollment costs
  • Stringent guidelines for transparency

The organization in charge of awarding forex licenses is BaFin.

Fiscal treatment of foreign exchange brokerages in Germany

The matter of taxes in the nation is intricate and has many facets.

Both trade tax and income tax apply to the company's earnings.

  1. Income tax
    • The tariff is 15% + 5.5% solidarity surcharge (total: 15.825%).
    • Object of taxation: company profit received during the reporting period.
    • Tax advantages: there are a number of perks and deductions available, including those for charitable contributions, energy conservation, and R&D investments.
  2. Trade tax
    • 3.5% interest rate + the local bonus (Hebesatz) is the current rate. Depending on the region, the local supplement might range from 8.75% to 20.3%.
    • The corporation's adjusted profits is the taxable entity. Change: 25% of all costs above €200,000 (rent, leasing, and royalties) are already included in the tax base.

List of documents required to obtain a forex license in Germany

The list of paperwork needed to apply for a license might change.

It is recommended to check the current list of documents with BaFin.

However, the following list of documents is usually required to apply for a forex license:

  1. Application:
    • The application needs to be completed in German and signed by all company executives.
    • The application must include details about the company, its executives, shareholders, operations, and financial standing.
  2. Business plan:
    • A business plan should describe the company's business model, its goals, strategies and development forecasts.
  3. Financial information:
    • Annual financial statements for the last three years.
    • Cash flow forecast.
    • Financing plan.
  4. Information about qualifications and experience:
    • Resumes of all managers and key employees of the company.
    • Documents on education and professional qualifications of managers and key employees.
  5. Information about internal control:
    • Description of the company's internal control system.
    • Risk management rules and procedures.
  6. Additional documents:
    • Copies of the company's constituent documents.
    • Company registration certificates.
    • Information about the company's shareholders.
    • Letters from business partners and clients (recommended, but not required).

In addition to the listed documents, BaFin may request additional information.

The process of obtaining a forex license in Germany can take several months.

Thoroughly organizing the requisite paperwork and data greatly improves your prospects of effectively maneuvering through the licensing process. Seeking guidance from experienced legal professionals can substantially increase your chances of securing the sought-after license.

Laws governing forex brokers in Germany

The activities of Forex brokers in Germany are regulated by a number of laws, regulations and rules:

Securities Law (Wertpapiergesetz - WpHG)

It is the main law regulating the activities of forex brokers in Germany. Establishes general requirements for licensing, activities, reporting and other aspects of the work of forex brokers.

Capital Markets Regulation (Verordnung über die Märkte für Finanzinstrumente und Organisierte Märkte - MiFID II)

This directive originated in the European Union and was incorporated into German law. It lays up more specific specifications for forex brokers, such as capital needs, risk control, openness, and customer safety.

BaFin Rules (Bundesanstalt für Finanzdienstleistungsaufsicht)

BaFin is in charge of overseeing the operations of forex brokers in Germany. It publishes regulations to support MiFID II and WpHG. Aspects like risk management, reporting, auditing, licensing, and dispute resolution are all covered by these regulations.

The laws and rules that control the operations of forex brokers in Germany are ever-changing. It's a good idea to keep an eye out for changes. It is essential to carefully review a forex broker's licensing, terms of operation, and policies before creating an account with them.

Residence permit for entrepreneurs in Germany:

Obtaining a residence permit for entrepreneurs represents a profitable opportunity for those who want to develop business activities in Europe.

There are several options for residence permits for businessmen:

The national start-up visa is a profitable option for those businessmen who intend to create a new business in the country, are able to invest at least 50,000 EUR and are ready to create at least five jobs.


  1. economic or regional interest in the country.
  2. This activity is expected to have a positive impact on the economy.
  3. financing is provided by equity capital or a loan commitment.

This visa provides the right to reside and work in the country for a businessman and his family members.



Be a citizen of a non-EU/EEA country

Business plan

The company strategy must align with Germany's economic objectives, be feasible, and have the ability to create employment.

Provide funding

To carry out your company strategy, you need to have enough money.

Required abilities and credentials

To manage your firm, you need to possess the requisite expertise and abilities.

No criminal record

You must not have any previous convictions for serious crimes.

Speak German

You will need to speak German at level B1 or above.

Opening a bank account

For a forex corporation, creating an account in Germany might be a more involved procedure than it is for an individual.

Here are some additional steps that forex companies need to take:

  1. Choose a bank that works with foreign exchange firms. Not every German bank is ready to provide services to FX firms. Finding a bank that has dealt with this kind of client before and is aware of their unique demands will need some investigation.
  2. Furnish the financial institution with supplementary documentation. In addition to the documentation required from ordinary individuals, foreign exchange corporations will presumptively be required to furnish the financial institution with the following documents:
    • Forex permit: you will need to furnish the bank with a copy of your Forex authorization issued by the pertinent regulatory body.
    • Business proposal: you must furnish the bank with an elaborate business proposal that delineates your enterprise, your intended audience, and your projections for the future.
    • Financial records: including a balance sheet, profit and loss statement, and statement of cash flows, you should also provide the bank with these documents.
    • Recipient information: you must provide the bank with information on your beneficiaries, including their names, addresses, and equity holdings in the business.
  3. CFT and AML legislation. AML/CFT regulations are quite strict for forex firms. It is imperative that you establish appropriate AML/CFT protocols inside your organization and provide the bank with periodic reports detailing your efforts in this domain.

Detailed guide for starting a Forex company in Germany

  1. Select legal form.
  2. A registration number will be given to you after your business is registered in the commercial register.
  3. Open a bank account.
  4. Get your license.

Obtaining a Forex license in Germany using YB CASE:

A consultancy firm called YB CASE focuses on assisting businesses in obtaining German forex licenses. We provide the following services to our clients:

  • Consultations on requirements for obtaining a license.
  • Assistance in preparing documentation.
  • Representation of the client's interests in BaFin.
  • Support at all stages of the license acquisition process.

Working with YB CASE offers the following benefits: seasoned attorneys and consultants, in-depth understanding of laws and regulations, individualized attention for each client, and a high level of confidentiality.

YB CASE undertakes a comprehensive evaluation of the client's operations and their adherence to BaFin regulations. We then facilitate the compilation of all requisite documentation, encompassing the license application, strategic business plan, financial reports, and details pertaining to directors and personnel. Our support extends throughout every stage of the licensing procedure, including liaising with BaFin and rectifying any shortcomings. Upon triumphant culmination of all stages, BaFin grants the client a forex license.

We are in touch at any time, waiting for your requests.

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