Companies that are active in the financial sector or wish to provide services relating to financial instruments, lending business or payment services are subject to supervision by the German Federal Financial Supervisory Authority (BaFin) for the protection of investors and the market. One of the most important instruments for the supervision of an institution is the obligation to obtain a permit from BaFin before carrying out its activities.
German and European law recognizes a large number of such licensing requirements, first and foremost for the conduct of banking business and financial services, for the provision of securities and payment services. Anyone who carries out an activity requiring a license without the necessary permit may run into serious problems with the financial supervisory authority, which may then prohibit further business activity and impose further sanctions or criminal proceedings.