Founding a Blockchain Company in Germany: What You Need to Know

The decision frame – which activity triggers which regime

The technology is never the thing that gets licensed; the activity is. The table below maps common blockchain activities to the law that governs them and to whether a financial licence is needed. Read it as a starting filter, not a verdict: the precise perimeter depends on how your specific token and model are classified, which is fact-specific and warrants advice.

Pure software / non-custodial / dev / consulting = no financial licence

If you write protocol or smart-contract code, build non-custodial tooling, operate nodes, consult, or sell B2B SaaS, you are not providing a financial service. You form an ordinary GmbH or UG and operate without a BaFin licence. This is the unregulated majority of blockchain businesses, and treating it as anything else is the over-claiming we deliberately avoid.

Crypto-asset services = MiCAR CASP

Custody, exchange, trading, advice and portfolio management on crypto-assets are crypto-asset services under MiCA (Reg. (EU) 2023/1114), with BaFin as the competent CASP authority. Firms that already hold a banking or investment licence may notify under Art. 60 MiCAR rather than fully re-license. If this is your model, the depth on services, capital classes and transition lives on our regulated CASP and MiCAR licensing sister page.

Tokenised securities = eWpG + WpIG/KWG

A token that qualifies as a transferable security is governed by MiFID II and the WpIG, the Prospectus Regulation and the WpPG, and the eWpG where it is issued as an electronic or crypto security. This is a different legal world from MiCA, with its own licensing, including a KWG-licensed crypto securities registrar where a crypto securities register is maintained.

Payment / e-money = ZAG; fund management = KAGB; investments = VermAnlG

The remaining regimes follow the same logic. Payment and e-money services fall under the ZAG. Fund management falls under the KAGB. Subordinated loans and profit-participation products may fall under the VermAnlG, depending on structure. In each case it is the financial activity, not the use of a blockchain, that brings the licence.

Classify the token first

Before any of the above, you have to know what your token is. MiCA (Reg. (EU) 2023/1114) governs crypto-assets that are NOT financial instruments: utility tokens, asset-referenced and e-money tokens (ARTs/EMTs, stablecoins), and the CASP services built around them. The eWpG together with MiFID II and the WpIG govern tokens that ARE securities or financial instruments: tokenised bonds, fund units and shares. Crucially, tokenised securities are expressly carved out of MiCA.

MiCA ≠ eWpG. A security token or tokenised bond is an eWpG/WpIG matter, not a MiCA matter. A utility token or a stablecoin service is a MiCA matter. Classifying the token is the first gate, it is fact-specific, and it determines every regime question that follows. Get advice before you build.

For a deeper treatment of the boundary, see MiCA vs eWpG, in depth.

The eWpG – Germany's Electronic Securities Act

The Gesetz über elektronische Wertpapiere (eWpG) has been in force since June 2021. It lets securities be issued in purely electronic form, with no paper certificate, in two forms: central register securities and crypto securities (Kryptowertpapiere) registered on DLT or blockchain.

Two consequences matter for founders. First, maintaining a crypto securities register is itself a financial service supervised by BaFin, and a crypto securities registrar must be licensed under the KWG. Building the rails for tokenised securities is therefore a regulated activity, even though the issuer's situation is separate. Second, an electronic security has the same legal effects as a paper-certificated security; it is treated as movable property under the BGB. Tokenisation under the eWpG is not a legal downgrade, it is legal equivalence.

From bonds to fund units to shares

The eWpG started narrow and expanded in three steps:

• 2021 – debt securities, specifically bearer bonds (Inhaberschuldverschreibungen), could be issued as crypto securities.
• Summer 2022 – fund units (Kryptofondsanteile) were added via the Crypto Fund Units Regulation (KryptoFAV).
• 14 December 2023 – the Zukunftsfinanzierungsgesetz (Future Financing Act, ZuFinG) extended the eWpG to electronic and crypto shares, registered shares only, not bearer shares.

Crypto shares, like the other instruments, require a KWG-licensed crypto securities registrar.

The DLT Pilot Regime and 21X

The EU DLT Pilot Regime (Reg. (EU) 2022/858) lets market infrastructures operate on DLT with tailored regulatory relief, for tokenised financial instruments, across three forms: a DLT multilateral trading facility (DLT MTF), a DLT settlement system (DLT SS) and a DLT trading-and-settlement system (DLT TSS).

In December 2024, the German firm 21X received BaFin authorisation as the first fully-regulated blockchain-based trading-and-settlement system (DLT TSS) under the regime. It was roughly an 18-month process involving BaFin, the Deutsche Bundesbank, ESMA and the ECB, with launch planned for Q1 2025 from Frankfurt, settling on Polygon. The proof point matters: it shows the German and EU framework can authorise genuinely on-chain market infrastructure, not just tolerate it.

Germany's Blockchain Strategy (2019)

Germany's openness here is not accidental. The federal government adopted the Blockchain-Strategie der Bundesregierung on 18 September 2019, under the banner "We are laying the groundwork for the token economy." It set out 44 measures across five action fields, coordinated across ten ministries, and explicitly committed to opening German law to electronic securities, a commitment realised by the eWpG. The strategy is the policy origin of the regime map above.

Which company vehicle – GmbH, UG or AG?

Whatever your regulatory position, you still need a corporate vehicle. The three common forms are:

• GmbH – minimum share capital €25,000 (§5(1) GmbHG), of which €12,500 must be paid in before Handelsregister entry (§7(2) GmbHG). The default for most blockchain firms.
• UG (haftungsbeschränkt) – the "mini-GmbH", from €1, which must retain profits until it reaches €25,000. Suited to cash-light founders.
• AG – minimum share capital €50,000 (§7 AktG). Relevant for token-issuing and institutional setups, and the only form able to issue crypto or electronic shares.

Share capital is distinct from any MiCA own-funds requirement. The two do not offset: capitalising your GmbH does not reduce regulatory own funds where a CASP licence is involved.

For the full comparison of vehicles, see the GmbH/UG/AG vehicle behind any blockchain company and our overview of German company types.

Can a foreign founder set up a blockchain company?

Yes. Nationality and residence are no bar to forming a GmbH, UG or AG in Germany. If your business is regulated, the entity will additionally need genuine substance to obtain BaFin authorisation, but that requirement attaches to the regulated activity, not to your nationality. For the broader founder and startup context, including funding and the UG-to-GmbH path, see our startup guide.

How a blockchain company is taxed

A company is not an individual, and the distinction is where founders most often go wrong. A GmbH, UG or AG is taxed as a company: corporate income tax (~15% plus the 5.5% solidarity surcharge) plus municipal trade tax, roughly 30% combined, varying by municipality.

The §23 EStG ">12 months tax-free" exemption applies to private individuals only. It does not apply to corporate crypto income, which is ordinary business profit. Do not plan around the individual rule when operating through a company.

Verify the exact combined rate, which depends on the municipal trade-tax multiplier, with a Steuerberater. See our corporate crypto tax page for an English-speaking adviser.

How we help (advisory)

Our role is advisory and incorporation, not licensing. We help you classify your model, set up the right GmbH, UG or AG, and make introductions where a regulated path applies. The regulated minority go to our sister CASP page for the MiCAR route; everyone gets a clean incorporation path. We never promise or guarantee a licence: BaFin alone authorises regulated activity.

Building a blockchain company in Germany? Book a consultation and we will classify your activity and set up the right vehicle.