Pawnbroking - apply for a permit

If you want to work as a pawnbroker or pawn broker, you need a permit.

The pawnbroker grants a cash loan against the deposit of a pledge to secure the loan together with interest and costs of business operations.

The pledge broker arranges pawn transactions by granting an advance on pledges handed over to him/her and pledging the pledges in his/her name with a pawnbroker.

Anyone wishing to operate the business of a pawnbroker or a pawn broker requires the permission of the competent authority. The licence may be subject to conditions to the extent necessary for the protection of the general public or the pledgers.

In the case of partnerships (e.g. OHG, KG), the trader is any managing partner. In the case of legal entities (e.g. GmbH, AG), permission is granted to the legal entity.

In Rhineland-Palatinate, the local trade offices are responsible.

Alternatively, you can contact the Single Point of Contact in Rhineland-Palatinate.The Single Point of Contact is a public body through which you can handle all administrative procedures and formalities required for the commencement and exercise of your service activity and for the recognition of a foreign professional qualification. Further information can be found on the website of the Point of Single Contact.

• Identity card or a comparable identification document (copy)
• Non-EU citizens: residence permit (copy)
• Proof of entrepreneurial legal form
  • Company headquarters in Germany:
    • in the case of registered companies: extract from the commercial register and, if applicable, a copy of the articles of association (e.g. in the case of a partnership under civil law (GbR))
  • Registered office abroad: Documents from this country that prove the legal form.
• Proof of personal reliability
  • Residence in Germany:
    • Certificate of good conduct
    • Excerpt from the Central Trade Register for natural and, if applicable, legal persons
  • Residence abroad: Documents from your home country that prove that you have the personal reliability to perform the desired service
  • In individual cases, the authority may request further documents that are suitable for making a statement about your personal reliability as an applicant.
• Proof of funds and collateral required for operation
  • Residence in Germany:
    • Excerpt from the list of debtors
    • Information from the insolvency register
  • Residency abroad: Documents from your home country as proof that you have the necessary funds and collateral
• Social
• Floor plan of the rooms intended for the commercial operation

If you want to work as a pawnbroker, you must provide special collateral and proof.

• You will need to provide evidence of funds or collateral required for the first six months. These can be credit balances or a bank guarantee.
• You must also take out insurance against fire damage, water damage, burglary and robbery and present it when applying. A safe must be provided for jewelry.
• You must secure your premises against burglary with an alarm system.
• In the case of car pawnshops, the question of the possible environmental hazards posed by the parking areas of the vehicles must be clarified.

Permission is denied if:

• Facts justify the assumption that the applicant does not possess the reliability required for the business operation. As a rule, this reliability is not possessed by anyone who has been sentenced to imprisonment for a felony, theft, embezzlement, extortion, fraud, embezzlement, forgery of documents, receiving stolen goods, usury or for an offence against the Unfair Competition Act in the last five years before the application is filed.
• The applicant fails to provide evidence of the funds or collateral required for the business operation.

You must apply to the competent authority for permission to operate a business as a pawnbroker or pawn broker.

After the exam, you will receive either permission or a rejection notice. A permit may be subject to certain conditions.

You must apply for the permit before starting the activity. Only after the permit has been granted are you entitled to practice the trade.

The pawnbroker must notify the competent authority at the beginning of the business operation which rooms he/she uses for the business operation; furthermore, he/she must immediately notify any change of premises used for the business.

The pawnbroker is obliged to keep accounts.