- In Hong Kong, under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“Anti-Money Laundering Ordinance”), a person who operates a money-changing service or a remittance service is a money service operator and must be licensed by the Hong Kong Customs and Excise Department.
- In this article, Tetra Consultants’ team of licensing experts has provided an overview of the regulatory framework, looking at key issues such as what constitutes money services, what are regulatory requirements, and what are the steps to apply for Hong Kong money service operators (MSO) license.
- Tetra Consultants has years of experience providing assistance to international clients with the process to register company in Hong Kong, corporate bank account opening services, apply for specified payment license, and other supplementary services. if you would like to know more information about how the Anti-Money Laundering Ordinance of Hong Kong regulates money service operators, please contact us, and our team of experts will revert within the next 24 hours.
What is a Money Service in Hong Kong?
According to the rules of Hong Kong, a Money Service Operation means a money-changing activity and/or money remittance activity.
- The money-changing services include the exchange of currencies that are being operated in Hong Kong as the primary business.
- The money remittance services mean one or more of the following:
- Remitting money to any location outside Hong Kong;
- receiving and/or arranging for the receipt of money from any location outside Hong Kong; and
- Arranging for the receipt of money in any location outside Hong Kong
What are the requirements?
Compliance Officer
- A money service operator must have a compliance officer (“CO”). The CO acts as the focal point within the money service operator for the oversight of all activities relating to the prevention and detection of money laundering/terrorist financing. The CO provides support and guidance to the senior management to ensure that money laundering/terrorist financing risks are adequately identified, understood, and managed.
Money Laundering Reporting Officer
- A money service operator should appoint a money laundering reporting officer (“MLRO”). The MLRO serves as the central reference point for suspicious transaction reporting and as the main point of contact with the Joint Financial Intelligence Unit (“JFIU”) and other law enforcement agencies. The MLRO should play an active role in identifying and reporting suspicious transactions.
Physical office premise
- The premises for the operation of the “money service operator” business must be suitable. Such premises must be registered with the Customs and Excise Department (“C&ED”).
- There must be a local management office (that is a physical office that can be reached in person and through telephone by officers of the C&ED to perform the functions under the Anti-Money Laundering Ordinance, as well as receive documents and correspondence from C&ED such as circulars and notices), a correspondence address, and a local place (that is a physical place for keeping the full set of books and records in respect of its money service transactions).
- The applicants planning to apply for a money service operator license in Hong Kong needs to take note that sharing office premises with others will not be accepted and residential premises or care-of addresses will not be accepted as the registered office address.
MSO License Application Procedures
- An applicant for an MSO license needs to first incorporate a company in Hong Kong and fulfill the prerequisites mentioned above. Further, the applicant needs to file and complete an application form and submit (i) A business plan, and (ii) AML/CFT policies (“AML Policy”) to Hong Kong regulatory authority.
- Once the below-mentioned documents are submitted the regulatory authorities call for an interview with the representatives of company personnel which may include the AML/CFT officer, compliance officer, and other relevant board members as may be authorized.
Business Plan
- The business plan should be a comprehensive overview of the business, which includes but is not limited to such components as the detailed operation mode, organizational structure, payment system, target customer, staffing, and finance of the company. The Money Service Supervision Bureau (“MSSB”) will look into the applicant’s entire business operation from an anti-money laundering and counter-terrorist financing (“AML/CFT”) perspective.
AML Policy
- The AML Policy should set out, a money service operator’s own policies, procedures, and controls in the relevant operational areas with a view to mitigating the money laundering and terrorist financing risks (“ML/TF risks”) to which the money service operator is exposed and fulfilling the relevant statutory and regulatory requirements having regard to the money service operator’s particular business risk profile.
Interview
- After submitting all the required documents, the money service operator must attend an interview and must nominate an eligible person(s), i.e. sole proprietor, partner(s) or director(s) of the applicant to attend a Competence Assessment.
- The Competence Assessment is conducted to ensure that the senior management of the applicant has clear understanding of ML/TF risks to which it is exposed, and is capable of implementing effective AML/CFT systems to adequately manage and mitigate the ML/TF risks identified in order to meet the statutory AML/CFT obligations.
Conclusion
- Engage Tetra Consultants as we make your registration of business in Hong Kong a smooth and hassle-free process. The team provides a comprehensive service package that includes planning and strategizing with our clients to select a suitable business entity, completing the registration and documentation processes, obtaining required offshore financial licenses, opening a corporate bank account, and ensuring compliance with government regulations.
- Contact us to find out more about how to secure a Hong Kong Money Service Operator (MSO) license and our dedicated and experienced team will revert within the next 24 hours.
