Formation of a Bank, Bank License, Asset management company, Offshore Bank License, Bank License Cayman Islands, Offshore Bank Belize, Offshore Bank License St. Vincent, Bank License Germany, Bank Liechtenstein, Bank License Germany

Bank License Germany

• Tax planning via a network of international tax advisers and attorneys
• Why form a company in a foreign country with a tax accountant specialized in international tax law?
• Download all Company Information
• Basic Considerations regarding the Formation of a Bank (Deposit Bank)
• Asset Management Company Belize
• Banking Charter/License in Belize
• Bank License Cayman Islands – Bank License Nevis
• Formation of an Asset Management in Liechtenstein
• Online Banking Software – SWIFT/BIC

Setting Up a Bank in Germany -Bank License Germany

Our legal office supports clients when setting up a German bank (financial institution taking deposits as defined by § 1 Para 31 of the German Banking Law) and, consequently, when setting up a securities trading bank, an investment bank or institutions operating a business trading in E-money.

The legal fees depend on the time and effort involved. We will gladly send you a fee calculation.

As a rule, a German PLC is set up as  a “company of the bank”. The government charges (registration fees) come to between 5,000 and 30,000 euros.

In addition to the fees solely associated with setting up the bank and registration the following costs/services may also be relevant:

• banking contract law : drawing up of the terms and conditions of the business (General Terms and Conditions), agreements between customers and the bank, loan agreements
• online banking system and electronic interfaces
• SWIFT Code, IBAN: apppointment with SWIFT
• establishing links with credit card providers, Visa, MasterCard etc..
• participation in the deposit protection fund
• establishing a link with a recognised firm of auditors (statutory regulation, e.g. Moodys)
• search for suitable managers for the German bank (personal and professional suitability in accordance with the Banking Act)
• suitable business premises for the bank in Germany

A German bank is subject to the Basel II rules, in future Basel III. We support the client when it comes to the selection of a registered ratings agency. The annual fees payable to the ratings agency come to approx. 38,000.00 euros.

In addition, we support clients in arriving at the ideal configuration from the point of view of tax law, e.g. the setting up of an intermediate holding company.

Preconditions for the Issue of a Licence

As a result of § 33 Para 1 Clause 1 of the German Banking Law that governs the compulsory refusal of a licence, the Federal Institute may only issue a licence if the following preconditions are fulfilled:

• The necessary funds for the operation of the business must be available within the country. In particular, there must be sufficient start-up capital.
• In the case of financial institutions taking deposits, that is companies that intend to accept deposits or other repayable monies from the public and to operate a loan business, as well as in the case of central counterparties as defined by § 1 Para 31 of the German Banking Law, start-up capital of at least 5 million euros is required (§ 33 Para 1 Clause 1 No. 1d of the German Banking Law).
• In the case of securities trading banks the start-up capital is at least 730 000 euros (§ 33 Para 1 Clause 1c in conjunction with § 1 Para 3d Clause 3 of the German Banking Law.
• In the case of companies that only operate a business trading in E-money the start-up capital is at least 1 million euros (§ 33 Para 1 Clause 1 No. 1e of the German Banking Law).
• The start-up capital of an investment trust company must be at least 730,000 euros in accordance with § 11 Para 1 No. 1 of the InvG (Investment Act); in the case of the provision of certain ancillary services or the administration of special property assets this sum increases to at least 2.5 million euros.

In addition to these minimum statutory requirements the following special requirements made of the start-up capital have developed out of the administrative practice of the Federal Institute:for the issuing of a licence to operate a mortgage bank start-up capital of at least  25 million euros is normally requiredfor the setting up of a savings bank start-up capital of at least 15 million euros is normally required.

• for the issuing of a licence that is restricted to the operation of a guarantee business start-up capital of at least 1.5 million euros is required. If the guarantee business is operated exclusively through counter-securities from the public purse, liability capital amounting to at least 500 000 euros is required.

The requirements that are to be made of sufficient start-up capital are assessed in accordance with § 33 Para 1 Clause 1 of the German Banking Law in conjunction with § 10 Para 2a Clause 1 Nos. 1 to 6 of the German Banking Law. According to this, the start-up capital must consist of core capital composed of several equity capital components which are variously defined according to the specific nature of the financial institution under company law. A crucial characteristic in relation to the core capital is that it is freely availaible without limit of time and does not come from borrowing.

The Federal Institute reserves the right  to decide, on a case by case basis, whether the start-up capital in the amount of the above-mentioned sums is also actually sufficient and meets the actual situation of the new institution.

• There must be a least two professionally suitable and reliable managers available that are not just available to the institution in an honorary capacity (cf. §§ 32 Para 1, 33 Para 1 Clause 1 Nos. 2, 4 and 5 of the German Banking Law). At the same time, there must be no facts, as a result of which there are doubts as to the personal reliability of the applicant or a manager (cf. § 33 Para 1 Clause 1 No. 2 of the German Banking Law). Facts that may give rise to such doubts are, for example, the commission of criminal offences involving assets and/or property (such as disloyalty, deceit), the breaching of statutory regulatory provisions, in particular from the field of commercial, industrial, competition or tax law, or if the applicant has shown in his private or business conduct that sound business management cannot be expected of him.

The professional suitability of the managers requires, in accordance with § 33 Para 2 Clause 1 of the German Banking Law, that they have a sufficient degree of theoretical and practical knowledge of the banking operations concerned as well as experience of management. Professional suitability to manage a financial institution can normally be assumed where there is evidence of three years’ working in a managerial capacity for a financial institution of comparable size and type of business (§ 33 Para 2 Clause 2 of the German Banking Law). Anyone who was employed as part of the management of a financial institution or at least in a responsible position directly below managerial level must be regarded as having worked as a manager in this connection. However, meeting the assumed rules is neither a necessary precondition for a licence nor evidence of professional suitability, i.e. it can also be achieved in other ways. Therefore, professional suitability is the subject of an individual examination that takes in all the circumstances of each individual case and that takes into account all the special characteristics of the financial institution in question.

• The owner or the legal representative or partner with personal liability of a company that holds a significant stake in the financial institution (§ 1 Para 9 of the German Banking Law) must satisfy the demands made in the interests of the sound and prudent management of the financial institution. This requires, in particular, that the owner of the significant stake is reliable (§ 33 Para 1 Clause 1 No. 3 of the German Banking Law). Unreliability must also be assumed, in the case of doubt, if facts justify the assumption that he has come up with the funds raised by him for the acquisition of the significant stake through a transaction that objectively satisfies the facts constituting a criminal offence  (§ 33 Para 1 Clause 1 No. 3 in conjunction with § 2c Para 1a Clause 1 No. 1 partial clause 2 of the German Banking Law).
• The head office of the financial institution must be in the country (§ 33 Para 1 Clause1 No. 6 of the German Banking Law).
• The institution must be prepared to or in a position to make the necessary organisational arrangements for the orderly operation of the businesses for which the licence has been applied for (§ 33 Para 1 Clause 1 No. 7 of the German Banking Law).

Overview of Third Party Costs within the Context of Setting Up a Bank in Germany

The following costs/fees are incurred, as a rule, within the context of applying for a bank licence. The present overview serves to give general information and guidance.

ETC has been asked for these costs and they have been listed to the best of our knowledge. Nevertheless, ETC assumes no responsibility for the accuracy of the information. The information is given subject to any change over which ETC has no influence.

The amounts in each case are to be paid directly by the client to those third parties involved.

SWIFT- IBAN Code

Typical modules to connect to SWIFT and get a BIC:

1. The Alliance Kits

The Alliance Kits pricing scheme consists of a one-time fee and an annual maintenance fee.

The modules vary by control, integration and solution:

• Control: do you want to use a private or shared infrastructure connectivity model?
• Integration: do you need back-office integration or is manual message entry sufficient?
• Complete solution: do you want to use a messaging interface from SWIFT or from a partner?  

2. Alliance Lite

Alliance Lite is available in two different pricing models:

• Flat fee: 850 EURO all-inclusive fee per month, for up to 4,000 items sent or received per month. Above that, additional items will be charged at 1 EURO per item.
• Pay as you go: 200 EURO fee per month, and 1 EURO per item sent or received.

An item is 1 message, or 1 FileAct file chunk of 100 KB

These fees are all-inclusive and include:

• your own BIC code, and membership of SWIFT
• a set of 10 USB hardware security tokens
• a CD-ROM with the driver for the tokens, and the AutoClient software
• access to Alliance Lite from browser as well as AutoClient
• online Alliance Lite training
• Alliance Lite documentation
• SWIFT User Handbook (UHB), document
• online access to the full SWIFT User Handbook (UHB), including SWIFT Standards Message Reference Guides
• access to the BICPlusIBAN directory
• PKI certificates, certified by SWIFT
• award-winning SWIFT Standard support
• access to future Alliance Lite software updates

All packages require being a member of SWIFT.

Provision of Financial Services – Formation of a Bank – Bank License

We form companies with a bank for our clients – and/or financial services license, i.e. asset management companies, primarily in the following countries:

• Sweden (Swedish Credit Union)
• Panama (Panama AG with Financial Services License)
• Liechtenstein, Asset Management company
• Belize, Asset Management company
• New Zealand Financial Service Company with Bank Services License
• Switzerland and USA: Full Service Bank
• Full Bank Cayman Islands
• Banking Charter/License in Belize
• Germany: Securities Brokerage, Investment Bank,Full Service Bank
• Bank license in the EEC (e.g. Germany, Spain, Luxemburg, Liechtenstein)
• Bank License Germany
•  In addition we offer financial service providers the issuance of their own funds offshore.

Services Bank License- Offshore Bank License:

• Incorporation of the company of the bank
• Apply for admission to hold an A-licence
• Setup of a place of business at the jurisdiction of your bank
• Recruiting of fit & proper personnel for the management of the bank according to international banking law
• Connecting to a rating agency (Rating, Basel II), e.g. Moodys, S&P
• Connection to Society for Worldwide Interbank Financial Telecommunication (SWIFT, appointments at SWIFT), Swift-Code and IBAN
• Connection to deposit guarantee fund
• Banking Law (general terms and conditions of the bank, credit agreements, due diligence, compliance, etc.)
• Representative offices or branches in other countries
• Tax planning and routing of dividends e.g. by setting up a holding

General Information with regard to Bank Licensing, Provision of Financial Services, Asset Management Companies

The licensing prerequisites differ greatly from country to country, in particular with regard to required capital stock of the bank and/or asset management company. The basis is, as a rule, the installation of a stock corporation according the respective laws of the country in which the company is registered, in addition the installation of an ordinary company seat in the country in which the company is registered. This stock corporation applies for a financial service provider and/or bank license. An excellent alternative can be a New Zealand Bank. A New Zealand Online Bank (correct term: New Zealand financial service provider with a banking license) both private persons and companies can offer bank services via the Internet without any restriction on customer numbers, deposit amounts or the number of currencies.

The fees for the foundation of a bank and/or asset management company are based on the country in which the entity is registered and the type of services. To learn more please refer to the individual web pages.

Tax Structure

In addition, in the formation of a bank or asset management company tax structuring plays an important role. We take over tax structuring within the scope of the “affiliated companies”, for example foreign parent company and domestic subsidiary, formation of a foreign holding to collect domestic dividends exempt from taxes and many more.

The Correspondent Bank (Correspondent Bank Account)

We are the only provider in Europe to provide a connection to correspondent banks in Liechtenstein, Switzerland, Singapore or UAE.

Banking Software Online Banking

We offer our clients NexorOne online banking software for example: within the scope of the formation of a New Zealand financial services provider company with a license for banking services, installation of an asset management company and/or Swedish Credit Union. The full version of the software provides complete online banking services, it is however only available in English.

-Bank License USA and Switzerland:

License fees, attorney fees: approx. 150,000.00 Euro/ USD

Capital Stock: approx. 5 Mil USD/CHF, depending on the country in which the company is registered. USA: 10 Mil. USD at the FED.

The formation of a US INC and/or Swiss AG as the bank company with the capital stock of the bank is required.

The directors/general manager must have an education in banking  (for example: banker) and experience in the management of a bank. A nominee director is not possible, accordingly the client would have to move his principal residence to the country in which the company is registered and/or hire a Director who resides in the country in which the company is registered. Further license requirements are similar to those in Germany, this includes among other things a viable business plan, profit and loss calculation for the first three years, General Terms and Conditions of the bank according to the statutory provisions, becoming a member of the investment guarantee funds, required insurances etc.

In addition to the basic foundation and license fees, the following costs can also be relevant:

• Preparation of the General Terms and Conditions (T&Cs), agreements between customers and bank, credit agreements
• Homepage of the bank, Online-Banking-System
• SWIFT Code, IBAN, international payment transactions, electronic communication channels and interfaces
• Connection to credit card providers, Visa-MasterCard etc.

-Securities Brokerage Bank/Investment Bank/ Full Service Bank Germany:

The basis is the German Banking Act Section 32 Article. 1 et seqq. [KWG, German Banking Act]. We accompany our clients from conception to the licensing of the bank (Federal Financial Supervisory Authority, Bafin). The fees are based on the “type of financial services” and the required services we provide. Accordingly we provide the formation of “the company of the bank”, as a rule a German AG [Inc.], the provision of banking software and “tax optimization” measures.

In addition to the basic foundation and license fees, the following costs can also be relevant:

• Preparation of the General Terms and Conditions (T&Cs), agreements between customers and bank, credit agreements
• Homepage of the bank, Online-Banking-System
• SWIFT Code, IBAN, international payment transactions, electronic communication channels and interfaces
• Connection to credit card providers, Visa-MasterCard etc.

-Financial Service Panama:

We offer you the company form of a Panama S.A. with a license to collect and administer (invest) customer assets.

With this servicewe make it possible for you to offer classic asset management or financial services without banking hours and teller’s windows, with all licenses for trustee management of client moneys.

-Swiss Credit Union:

A Swedish Credit Union can legally offer services in the EU, which can normally only be offered by fully licensed banks, such as accepting deposits, making loans, etc., as long as these services are provided exclusively to members of the Credit Union. A potential customer can become a member automatically, if he/she wants to open an account, applies for a loan or take advantage of any other service provided by the Credit Union. However the legal situation has changed in Sweden due to EU level provisions: Members of a Swedish Credit Union must now belong to one specific profession / group of professions and may only be natural persons.

-New Zealand Financial Service Company with Bank Services License

A New Zealand financial services company with license for bank services can offer services to private persons and companies globally without restrictions on the number of clients, the deposit amounts or the number of currencies. However the laws of countries, in particular the German Banking Act [Kreditwesengesetz (KWG)], must be observed under this constellation.

The New Zealand Bank can provide almost all services, which can be offered by banks with A License, however the word „Bank“ may not be apart of the name. The service activities of a financial company are as follows, but are not restricted to the same:

• Deposits and Loans
• Debit Cards and Credit Cards Services
• Issuance of Financial Guarantees and Financial Instruments
• Service in the Area of Cash Management
• Bank Accounts
• Check Accounts
• Saving Accounts
• Time Deposit Account
• Issuance of CDs
• Bank Transfers
• Payment Processing
• Fund Management
• Investment Marketing

The company is not subject to the provisions regarding the creation of capital reserves. Directors and shareholders can have any nationality their residence can be in any country.

-Offshore-Banks Belize and Cayman Islands

Offshore Bank Cayman Islands

In particular, the Cayman Island is an interesting location for the formation of a bank with an A license. The stock capital is approx CI$400,000. The bank acts as a Universal Bank with its own IBAN, SWIFT Code etc. and may offer all bank services. First a stock corporation is formed on the Cayman Islands as a company of the bank. This stock corporation then applies for a bank license from the government agency. A qualified business operation is required on the Cayman Islands, a fully furnished office with at least one employee. An office building with “Teller Windows” can be opened. It is true that the bank cannot act as a bank in Germany in terms of a German bank (compare German Banking Act [KWG]), however such bank is very attractive for international transactions with natural persons or legal entities from other countries. Clients, that form this type of bank, usually have clients/investors from Middle America, Russia etc. With regard to the management of the bank one person is required, with a recognized banking education and experience in the banking field. A Nominee solution is not possible. The general manager of the bank must be a resident of the Cayman Islands. Such that either the client or a representative moves his/her primary residence to the Cayman Islands or hires a General Manager who resides in the Cayman Islands. The licensing process takes approx. 3 months. The fees are based on the services and are at least 120,000.00 Euro plus state fees. We can create an Internet presence with online banking software for the bank. The banking software costs between 14,000.00 and 65,000.00 Euro, depending on functionality. We will provide a corresponding provider. Office space can be selected in advance; we will provide you with a Cayman Islands real estate agent. Our German attorney can accompany you to the Cayman Islands in exchange for commensurate fees.

Offshore Bank Formation Belize 

We can realize bank formation (A-License) in Belize by means of our cooperation law firm in Belize. Information can be requested from the competent government agencies / central bank:

BELIZE

Central Bank of Belize
http://www.centralbank.org.bz/

Attorney General Ministry
http://www.belizelaw.org/

In this case a stock corporation with a place of business in Belize is formed as the company of the bank. The formation fees are based on the services, they amount to approx. 70,000.00 Euro plus government fees. Upon request we can provide full services in collaboration with the cooperation law firm located in the country in which the company is registered:

•  Formation of the company, entry into the commercial registry, domiciliation, opening of a bank account
• Bank license application, submission of all applications to the competent authorities, direct communication with the competent government agencies
• Homepage of the Bank
• Online Banking Software
• Pre-selection of suitable offices space
• Visa application, residence permit
  • Tax planning via a network of international tax advisers and attorneys
  • Offshore Company Formation: Tax haven rankings