Open a Bank Account in Germany
When moving to or setting up a business in Germany it becomes necessary to open a bank account. Managing your finances and making the necessary payments is much more convenient compared to carrying out all of the financial transactions via an international bank account.
In order to open an account with a German bank you will be required to provide the following documents: a valid ID (usually passport), a certificate of residency that can be obtained with the local Residence Registration Office (Einwohnermeldeamt), a payment statement, required for some types of accounts and the work permit.
The process is a simple one and most banks have accessible online services to handle this process. However, investors or entrepreneurs who are interested in starting a business may request the help provided by our team of lawyers in Germany in order to open a bank account, as this process will also ask for providing specific corporate documents.
Types of bank accounts in Germany
When you decide to open a bank account in Germany you will need to choose its type.
The most popular type of German bank account is the current account (Girokonto), also known as a checking account. With this type of account, you will be able to make any financial transactions, such as receiving the salary or paying the bills. You can use the Girokonto account for money transfers, to withdraw money by using an EC-card that will usually be issued when opening the bank account; you can set up bill payments by direct debit so the money will be automatically withheld from the bank account at the desired date. You can also access your current account through online banking. Overdrafts are usually issued after the first six months.
The German savings accounts (Sparbuch) are best suited for people looking to put money aside because the interest rate is good for this type of account. Once you have set up your savings account a passbook will be handed to you in order to deposit money.
Other types of German bank accounts are instant access savings accounts (Tagesgeldkonto) and securities accounts (depot).
Opening a bank account in Germany
In order to open a bank account in Germany you will need to follow a number of steps:
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selecting the bank: there are many options to choose from and you can select a German bank or the branch of a large international bank; the choice can depend on their available services and the account maintenance fees;
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prepare the documents: banks have their own rules about the documentation a person must present upon opening the bank account; you will be asked to present your ID, but an employment contract or a payment statement could also be required;
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fill in the application: this is a specific form provided by the bank branch that must be properly filled in and handed over together with the other required documents;
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make the first deposit: in some cases, this can be mandatory, for example when opening a corporate bank account (and the initial minimum capital will be deposited into the newly formed account);
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other requirements: if you want an overdraft you must also present credit history, but if you have just come to Germany it won’t be possible for the first half-year to request an overdraft, as German banks will observe if any money is put into the bank account in the first 6 months.
These are only some of the documents that may be required for those who open a bank account in Germany. It is advisable to verify the list of documents and prepare them accordingly so as to avoid any delays caused by incomplete documentation submissions.
An important document that needs to be provided by ex-pats in Germany is proof of registration with the local authorities. This is a mandatory process and will need to take place every time an individual changes his or her address. Banks will ask for your updated information (such as your place of residence) and it is important to provide accurate data when opening a bank account.
Companies involved in online commerce will also need to open a merchant account in Germany, apart from the main corporate account used for business transactions. The merchant account is the one that will allow them to accept debit and credit card payments, essential for running an online business and offering services to both local and international clients.
Some of the criteria that can be important when choosing the bank branch with which you will open the account can include the general types of services (mobile and online services, for example), the number of ATM units, and their distribution and the account management fees.
Open a bank account online in Germany
When someones wish to open a bank account in Germany online, the procedure begins with accessing the bank’s website and looking for the application form (Privatekunden Girokonto). Once you have filled in the form with all required information you must select the options that will be activated for your bank account, such as overdrafts. After the form has been filled you must print it and go to any post office of Deutsche Post with it, with an ID and the residential registration form (Anmeldebescheinigung) and send the request to the bank. In a few days, you will receive an answer to your application.
Please note that banks reserve the right to verify the identity of their customers and this will take place as needed when you decide to open a bank account using an online service.
Please keep in mind that in some cases it may be recommended to open the bank account directly at a chosen branch, rather than online. When opening a company, our team of attorneys in Germany can assist you during this mandatory step.
The banking system in Germany
If you want to open a bank account in Germany, you should know some basic details about the banking system in this country. Banking activities in Germany are enforced by the German Banking Act (Kreditwesengesetz or KWG) which is constantly changing in order to improve the banking sector. The German banking system is quite unique as it a fragmented one and it consists of:
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Private commercial banks: they make up a large percentage of all the banks in the country;
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Public savings banks: these are the Sparkassen, which are local and the regional ones which are the Landesbanken; they are owned and controlled by the Government;
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Co-operative banks: this is the third essential pillar, alongside the two others mentioned above, and are independent co-operative institutions;
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International banks: a sector comprised of the many foreign banks than have opened branches in Germany;
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Investment banks: these are local banks that operate alongside the large international institutions.
German banks offer a variety of services, apart from the usual debit and credit card options or money transfer services. Some of these include insurance (property, vehicle, and health insurance), mortgage options, pension plans, and others.
According to data from the Deutsche Bundesbank, the market share by total assets in December 2018 was the following:
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16.5%: Sparkassen (the group of regional savings banks that operate across the country);
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15.8%: investment banks, KfW Group, and other state banks;
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14.8%: Deutsche Bank;
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12.1%: regional banks;
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8.4%: foreign banks.
Upon request, our team of lawyers in Germany can provide you with more detailed information about the country’s banking system.
The German Banking Act (Kreditwesengesetz or KWG)
The German Banking Act, simply known as KWG, contains the main regulations that apply to banking and financial institutions. As a member of the European Union, German law encompasses all EU directives referring to banking activities. Some of these directives are the Banking Directive (Directive 2006/48), the Capital Adequacy Directive (Directive 2006/49), the E-Money Directive (Directive 2009/110), and the Directive on Undertakings for Collective Investment in Transferable Securities. If you would like to open a bank account in Germany, you should know that there are several banks you can choose from and our lawyers can handle the entire process for you.
The German Banking Law outlines the requirements and duties of banks and financial institutions and states the capital a company must subscribe to in order to become a financial institution. This law applies to all German and foreign banks and financial institutions. Banks and financial institutions that hold a European Economic Area (EEA) license and banks from EU member states can benefit from the EU passport rule. The EU passport rule states that banks and financial institutions do not require a license issued by BaFin, but they can use the license granted by their home state authorities. The KWG also sets the regulatory frame for the supervising authorities, such as the Federal Financial Supervisory Authority (Bundesanstalt Finanzdienstleistungsaufsicht, or BaFin) and the German Federal Bank (Deutsche Bundesbank).
Our lawyers in Germany can provide legal counseling on the most important issues included in this Act. We also offer legal counsel on other various laws and acts that are of interest to investors, self-employed individuals, or employees in Germany.
If you want to open a business or open a bank account in Germany you can contact our law firm for legal advice. Our team provides complete assistance for company formation that also includes handling banking issues for the new company. Investors who cannot be present in the country during the entire company formation phase can reach out to the experts at our law firm in Germany for more information on how we can provide representation as needed. Our services are diverse and not limited only to banking and company formation issues. Our lawyers can also help you if you need trademark registration services in Germany.
