EMI licence in Germany — the BaFin application under the ZAG
BaFin’s e-money authorisation runs under the ZAG — the Zahlungsdiensteaufsichtsgesetz — and it is the most documentation-heavy of the six core EU licensing tracks. German-language file, detailed governance expectations, the strictest stance in the bloc on outsourcing the AML officer, and the Bundesbank sitting alongside BaFin for the prudential-reporting side. This piece walks through the E-Geld-Institut application: legal basis, capital, the file structure, fitness-and-properness, realistic timing and what switches on at grant.
1. Who grants and who supervises
BaFin — the Bundesanstalt für Finanzdienstleistungsaufsicht — is the competent authority for e-money institutions (E-Geld-Institute). The Deutsche Bundesbank participates in ongoing supervision, particularly on the reporting and prudential-data side: returns flow through the Bundesbank’s ExtraNet infrastructure. AML supervision sits with BaFin; suspicious-activity intelligence goes to FIU Germany — see our §43 GwG piece.
2. Legal basis
- Directive 2009/110/EC (EMD2) — the EU framework
- Zahlungsdiensteaufsichtsgesetz (ZAG) — the German act covering both payment services and e-money since the 2018 PSD2 transposition; e-money issuance authorisation sits in the ZAG’s e-money provisions
- Geldwäschegesetz (GwG) — the AML framework, including the §7 Geldwäschebeauftragter requirement
- BaFin guidance notices (Merkblätter) on the authorisation procedure — the operative checklists
- EBA Guidelines on authorisation under PSD2/EMD2 — directly applicable
3. Who can apply
- A German-incorporated company (GmbH or AG are typical) with real substance in Germany
- Initial capital of at least €350,000, fully paid up at grant
- At least two fit-and-proper managing directors (Geschäftsleiter) — the German four-eyes principle applies from day one
- A complete application file in German
4. What goes in the file
- Geschäftsmodell / programme of operations — products, flows, customer journey, geographies
- Business plan — three-year projections with capital planning and stress sensitivity
- Governance — Geschäftsleiter, key function holders, organisational chart, four-eyes evidence
- Internal control — risk management, compliance and internal audit consistent with the MaRisk-style expectations BaFin applies proportionately to ZAG institutions
- ICT and operational resilience — aligned with DORA and BaFin’s ICT supervisory practice
- Safeguarding (Sicherung der Kundengelder) — segregated trust account at a credit institution or insurance solution, evidenced contractually
- AML programme — risk analysis, policies, and the named Geldwäschebeauftragter plus deputy under §7 GwG. BaFin is the strictest of the six core supervisors on outsourcing this role — plan for an internal appointment
- Outsourcing register with DORA Article 30 clauses for ICT arrangements
- Shareholder structure — qualifying-holding notifications with fitness documentation for 10%+ holders
5. Own funds
EMD2’s €350,000 floor applies. Ongoing own funds are the higher of the floor and the Method A/B/D calculation under the EMD2 framework as implemented in the ZAG. BaFin reviews the chosen method against the business plan with worked projections; where the institution also provides payment services unrelated to e-money, the payment-services own-funds calculation runs in parallel.
6. Fitness and properness — the Geschäftsleiter test
- CV evidencing both fachliche Eignung (professional competence — typically at least three years of relevant managerial experience) and Zuverlässigkeit (reliability)
- Führungszeugnis (criminal-record certificate) and equivalents from prior countries of residence
- Declarations on other mandates and conflicts
- BaFin routinely interviews Geschäftsleiter; interviews are in German
7. Realistic timing
The statutory review is three months from a complete application — but German practice turns on when BaFin deems the file complete, and question letters restart the substantive dialogue. Realistic end-to-end for a first-time applicant: nine to eighteen months depending on preparation and the completeness dialogue, including pre-application engagement, file drafting in German and two-plus feedback rounds. Pre-application meetings with BaFin are available and worth taking.
8. What switches on at grant
- Bundesbank-routed reporting via ExtraNet — prudential returns and statistics
- §43 GwG SAR reporting through goAML Germany, plus the §46 three-working-day freeze mechanics
- CESOP once cross-border thresholds are met
- IPR statistical reporting
- Passport notifications to host member states — see branch vs Freedom of Services
9. FAQ
Is the application really in German?
Yes. The file and the supervisory dialogue run in German. Group annexes in English are tolerated case by case, but the core file and the interviews are German-language.
Do I need two managing directors from day one?
Yes — the four-eyes principle requires at least two fit-and-proper Geschäftsleiter at authorisation, both genuinely involved in running the institution from Germany.
Can the Geldwäschebeauftragter be outsourced?
Only exceptionally and with BaFin’s acceptance. Germany is the strictest of the six core jurisdictions on this point — plan for an internal, Germany-based appointment with a deputy.
ZAG or KWG — which law applies to an EMI?
The ZAG. Since the 2018 restructuring, payment institutions and e-money institutions both sit under the ZAG; the KWG governs credit institutions and certain other categories.
How does Germany compare with the other core jurisdictions?
Substantively identical under EMD2. Procedurally: German-language requirement like France/Italy/Spain, the heaviest documentation culture, the hardest AML-officer outsourcing stance, and Bundesbank-grade reporting expectations from day one. See where to base your EMI.
10. What to do, today
- Take a BaFin pre-application meeting before drafting; calibrate the Merkblatt expectations.
- Recruit two Germany-based Geschäftsleiter and an internal Geldwäschebeauftragter early — these are the long-lead items.
- Draft in German from the start; retro-translation is visible and slows the review.
- Design the reporting stack for Bundesbank ExtraNet at build time, not post-grant.
Related: Where to base your EMI · §43 GwG — SARs in Germany · PI licence in Germany
