In Canada, an MSB (Money Services Business) license is required for financial activities like money transfers, currency exchange, and selling traveler’s checks.
The license is issued by FINTRAC, the country’s financial intelligence unit. Businesses must register, report large transactions, and follow regulations.
The application process takes months, including a background check and proof of financial resources. Licensed MSBs must submit annual reports and audits, and non-compliance leads to fines and license revocation.
Requirements are set by FINTRAC for obtaining an MSB license in Canada.
Regulating By the Financial Transactions and Reports Analysis Centre (“FINTRAC”)
To obtain an MSB (Money Services Business) license in Canada, businesses must meet certain requirements set forth by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
1. Business registration: The company must be registered in Canada and have a physical presence in the country.
2. Compliance officer: The company must designate a compliance officer who is responsible for ensuring the business complies with FINTRAC regulations.
3. Anti-money laundering (AML) program: The company must have an AML program in place, which includes policies and procedures to identify and report suspicious transactions, as well as ongoing monitoring of transactions.
4. Risk assessment: The company must conduct a risk assessment of its operations to identify and mitigate potential money laundering and terrorist financing risks.
5. Record-keeping: The company must maintain detailed records of transactions and customer information, as well as provide reports to FINTRAC as required.
6. Background checks: The company owners, directors, and officers must undergo a background check to ensure they are not involved in criminal activity.
7. Financial stability: The company must demonstrate adequate financial resources to operate as an MSB.
The specific requirements for obtaining an MSB license may vary depending on the type of services offered by the business.
1. Licensing Process Requirements:
– Business plan;
– Compliance officer (preferably local compliance officer, but can be the same person as director);
2. Minimum Local Presence Requirements:
– Local address;
3. Initial capital requirements:
– No required capital;
4. Requirements for the Directors and Shareholders:
– 1 director, 1 shareholder;
– Passport copy for each person;
– Recent (not older than three months) proof of address for each person;
– – CV for each person;
– Source of funds for UBO(s) (may be requested in case of enhanced due diligence).
– Clear Criminal record;
It is important to note that FINTRAC may also require additional information or documentation as part of the registration and ongoing compliance process. MSBs are also subject to regular audits to ensure compliance with FINTRAC regulations.
1. Licensing Process Requirements:
– Business plan;
– Compliance officer (preferably local compliance officer, but can be the same person as director);
2. Minimum Local Presence Requirements:
– Local address;
3. Initial capital requirements:
– No required capital;
4. Requirements for the Directors and Shareholders:
– 1 director, 1 shareholder;
– Passport copy for each person;
– Recent (not older than three months) proof of address for each person;
– – CV for each person;
– Source of funds for UBO(s) (may be requested in case of enhanced due diligence).
– Clear Criminal record;
It is important to note that FINTRAC may also require additional information or documentation as part of the registration and ongoing compliance process. MSBs are also subject to regular audits to ensure compliance with FINTRAC regulations.
Choosing a name for the business company: The name of the business must be unique and not already in use by another company. The name must also meet the requirements of the relevant provincial or territorial business registration authority.
Registration of the company: The company must be registered with the appropriate provincial or territorial government agency. This involves submitting the necessary forms and paying any registration fees.
Drafting and file articles of incorporation. This document sets out the basic structure and governance of the corporation.
Issuing of shares
Obtaining a business number
To apply for an MSB (Money Services Business) license in Canada, businesses must register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The registration process involves the following steps:
Gathering of required information: The company must gather all necessary information and documentation, such as business registration documents, identification for owners and officers, and information on the business's AML program.
Waiting for the approval: Once the application is submitted, FINTRAC will review it and may request additional information or documentation. The application process can take several months, depending on the complexity of the business and the completeness of the application.
Once the application is approved, the company will receive its MSB license and must comply with ongoing reporting and compliance requirements, including reporting of large cash transactions and suspicious activities. The company must also undergo regular audits to ensure compliance with FINTRAC regulations.
To open a bank account for an MSB, the following steps are typically required:
Gathering Gathering of the required documents
Completing of the application: The company must complete the bank's account application, which typically includes providing detailed information about the business's operations and financial history.
|
|
---|---|
Canadian MSB License The work includes:
|
€ 15, 000 excluding taxes and disbursements |
Payment Account |
€ 3, 000 |
Local Director |
From € 750 per month |
|
|
---|---|
Annual renewal Annual fees to act as registered and records office, including preparing and filing annual reports with corporate registry, preparing annual directors' and shareholders' resolutions, and updating corporate minute book accordingly. This fee is due on the anniversary of the incorporation. |
€ 1, 500 |
Compliance Review for FINTRAC At least once every two years. |
from € 14, 000 |
|
|
---|---|
Mailing address BC corporations are required to have mailing addresses in BC. If you would like our office to act as the mailing address for your MSB company in Canada. |
€ 2, 000 per year excluding taxes and disbursements |
Shareholder Agreement |
from € 14, 000 |
Securities Regulations – Renew and Opinion If you will be dealing with virtual currency in your business, your company could potentially require compliance with securities legislation/regulations. |
€ 3, 500 |
Canadian Trademark Application Trademarks are NOT necessary for a registered MSB in Canada but it’s recommended if you wish to promote, build or protect your brand in Canada. NOT INCLUDED BUT WILL BE CHARGED BY THE AUTHORITIES DIRECTLY: Government filing fees: The first Class of goods/services – CAD 335; For each additional Class of goods/services – CAD 102; |
€ 8 ,500 |
The whole process is expected to take around 4 – 5 months, accounting for delays in the process.
Gain a comprehensive understanding of costs and timelines by downloading our informative PDF.
Find all the essential details and empower yourself to make informed decisions.
Begin your licensing process effortlessly with our user-friendly online application. Or schedule a call to speak directly with our experts to discover the Power of an MSB License in Canada