The financial sector can be an attractive way of starting a company in a European country. The registration procedure for a financial company can differ depending on the country in which the investors will set up their operations, as well as on the business activities developed by the respective company. That’s why it is recommended to ask for legal advice from a team of corporate lawyers, who can provide assistance on the requirements established in a particular jurisdiction.

Top European financial centres

According to the latest edition of the Global Financial Centres Index (GFCI), issued in September 2017, the top European cities for financial activities are the following:

• London, United Kingdom
• Zurich, Switzerland
• Frankfurt, Germany
• Luxembourg
• Geneva, Switzerland.

Businesspeople interested in starting financial activities in one of the above mentioned European centres should know that London is also the top location at a global level, being the most important financial centre, despite the effects of the recent decision to exit the European Union.

Market authorisation for financial companies

Most of the financial companies set up in the UK and elsewhere in Europe will need an authorisation provided by the country’s main financial institutions. For example, in Germany, financial companies will need a written authorisation issued by the Federal Financial Supervisory Authority (BaFin). The document is required for a wide range of financial activities, such as:

• financial services providers
• asset management companies
• insurance companies
• pension funds.

Companies operating in the financial sector, which have already been incorporated in a European country and want to operate in Frankfurt, Germany (the third European financial centre) can be exempted from authorisation, under the regulations of the European Passport. You may ask for legal advice in Germany on the procedures applicable in this case.

Although not included in the latest GFCI report as one of the top financial centres in Europe, the Netherlands offers a strong economy and a solid financial sector, offering the world’s oldest stock exchange market.
Financial companies operating here should also obtain an authorisation and their activity will be monitored by the main financial institution of the country, the Netherlands Authority for the Financial Markets (AFM). Businessmen can set up a large category of financial companies that have different requirements on the company’s capital, investors’ eligibility and taxation schemes. Prior to starting the business activity here, it is highly recommended to calculate taxes in the Netherlands and verify the main conditions for opening a financial business.

Another country where businessmen can set up a financial company, especially in the banking sector, is Estonia. The banking sector in this country is mostly represented by local companies and Scandinavian legal entities. Those interested in how to open a company in Estonia must know that the country offers many investment opportunities.