Hong Kong Money Service Operator (MSO) License
Tetra Consultants assists our international clients to secure Hong Kong Money Service Operator (MSO) license. Our team will provide the full-service package of company registration, corporate bank account opening, hiring of local qualified directors, sourcing local physical office and license application. Tetra Consultants has ample experience in this field and will be able to accurately advise our clients.
The Customs and Excise Department (C&ED) is the authority for regulating money service operators (MSO). Any business operating a money service is required to be licensed with the Commissioner of Customs and Excise (CCE). It is an offence to operate a money service in Hong Kong without a license issued under the provision of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
When do you require Hong Kong MSO license?
Your business will require a Hong Kong Money Service Operators (MSO) license if you wish to conduct money remittance or money changing services.
Money changing service refers to the exchanging of currencies that is operated in Hong Kong as the main business activity. However, money exchanging services incidental to the main business activity (E.g. Receiving foreign currencies for retail businesses).
Similarly, there are three aspects of money remittance services in Hong Kong. A remittance service means a service of one or more of the following that is operated in Hong Kong as a business:
- sending, or arranging for the sending of, money to a place outside Hong Kong;
- receiving, or arranging for the receipt of, money from a place outside Hong Kong;
- arranging for the receipt of money in a place outside Hong Kong.
Additionally, in accordance with the AMLO, the Hong Kong Money Service Operator (MSO) License is not applicable to the following entities:
- An authorized institution;
- a licensed corporation that operates a money service that is ancillary to the corporation’s principal business;
- an authorized insurer that operates a money service that is ancillary to the insurer’s principal business;
- an authorized insurance broker that operates a money service that is ancillary to the broker’s principal business;
- an appointed insurance agent that operates a money service that is ancillary to the agent’s principal business;
- an SVF licensee that operates a money service that is ancillary to the licensee’s principal business; or
- a system operator or settlement institution of a designated retail payment system that operates a money service that is ancillary to its business as a system operator or settlement institution.
As such, business entities who fulfill the requirements as mentioned above will be exempted from MSO licensing requirements.
Mandatory requirements for Hong Kong Money Service Operator (MSO) License
- The application must be submitted by a company or a foreign branch registered in Hong Kong.
- You are required to have a place for storage of books and records in respect of its money service transactions (LPS).
- If your corporate entity decides to carry out money service operations without specific premises, a local management office (LMO) must be provided to maintain a physical presence in Hong Kong. Furthermore, the corresponding address of the LMO must be stated in the application.
- It is mandatory for you to complete a Fit and Proper Test by the C&ED.
- Upon submission of the due diligence documents, the C&ED will schedule for a face-to-face interview. Tetra Consultants will assist you in the preparation of relevant documents necessary prior to your interview.
What is a Local Management Office (LMO)?
- A Local Management Office (LMO) is a physical office that can be contactable in person and reached through telephone by C&ED officers. Additionally, personnel located within the LMO must be the sole proprietor, partner, director, ultimate owner, and/or compliance officer (CO) of the licensee.
- Corporate entities will be subjected to license revocation if the LMO fails to serve its purpose as a point of contact. As such, checks will be conducted by C&ED Officers to ensure the suitability of chosen premises.
What is a Local Place for Storage of books and records?
- The Local Place for Storage (LPS) is a physical premise for the storage and depository of books and records related to money service transactions. Additionally, the LPS should be under the responsibility and control of the licensee to facilitate the C&ED officer’s accessibility to the relevant documents and records.
Timelines to secure Hong Kong MSO license
- The processing time for Hong Kong Money Service Operator (MSO) License may vary and depend on various factors including the time taken in collecting requisite documents from the applicant, on‐site inspection at the business premises, and the time required in obtaining records from other authorities to perform a fit and proper person test. From our experience, this process typically takes around 3 to 5 months.
- The validity period of a license granted will be 2 years. Virtual resources, such as cryptocurrency, are not considered as legal tender or currency in Hong Kong, and the trade-in such virtual goods is beyond the scope of the MSO regulatory regime and is not directly regulated by law.
How to apply?
- Tetra Consultants will assist our international clients to register a company in Hong Kong by providing a local company address, corporate bank account and local company secretary. This process will take approximately 1 week after receiving required due diligence documents. You may refer to this webpage for more information on the Hong Kong incorporation process.
- After we have successfully registered your corporate entity, Tetra Consultants will proceed to open a corporate bank account with a reputable Hong Kong bank. The newly opened bank account will be used to deposit the minimum paid-up capital necessary to procure the Hong Kong Money Service Operator (MSO) License. Within 4 weeks, Tetra Consultants will secure the bank account and internet banking token for our international clients.
- Simultaneously, Tetra Consultants will assist our international clients in the preparation of a comprehensive business plan and AML policy essential for the license application. This is to ensure that the company adheres to the compliance, technology risk and audit requirements regulated by the Money Service Supervision Bureau, C&ED.
- The business plan will include primary information such as Company name, company history, key executives of senior management, location of key management, key business operations, objectives, profitability and financial information. As such, these information will provide the Money Service Supervision Bureau (MSSB) with a comprehensive outlook and understating of your intended money service business and its mode of operation.
- As it is mandatory for MSO licensee to maintain a Local Management Office in Hong Kong, Tetra Consultants will source for a suitable physical office for our international clients. Our legal team will prepare a lease agreement as per local Hong Kong real estate regulations, to be signed by all parties. Thereafter, our international clients are required to pay monthly rent directly to the landlord.
- Once the above is completed, Tetra Consultants will submit the license application to the Customs and Excise Department for approval. Accounting for the time necessary for the completion of on-site inspections and performance of the fit and proper person test, it would take on average 3 to 5 months to secure the MSO license. In the event additional documents are required, Tetra Consultants will immediately prepare the same for submission so as to prevent any engagement delay.
- Tetra Consultants will manage your MSO license application from the start to the end, including the incorporation of a new Hong Kong company, the opening of corporate bank account, drafting the legal documents required and securing the MSO license. Contact us to find out more about how to secure Hong Kong Money Service Operator (MSO) License. Our team of experts will revert within the next 24 hours.
- Tetra Consultants is a one-stop solution for all your business needs. We provide a comprehensive set of services to our clients when obtaining a Payment License in the jurisdiction of their choice. Our team of licensing experts is well aware of the rules and regulations governing such licenses all over the globe to accurately advise you in your business expansion journey.
- In addition, Tetra Consultants is proficient in providing assistance with respect to various offshore financial licenses.
Find out more!
- Contact us to find out more about how to secure Hong Kong Money Service Operator (MSO) License. Our team of experts will revert within the next 24 hours.
What are the guidelines to determine whether a particular premise is suitable for the operation of a money service?
- The following necessary requirements encapsulate the definition of a suitable premise for money service operations:
- Particular premises should be accessible by C&ED officers for carrying out their functions under the MSO regulatory regime; and
- If particular premises are situated in a mixed commercial and residential building, the license applicant must secure the written consent of every occupant of the premises for any authorized personnel of C&ED to enter the premises to conduct an inspection.
Who is required to apply for an MSO license?
- Personnel who wishes to carry out money service operations is required to apply for a license.
Are there any legal consequences if I fail to apply for a license to carry out money service operations?
- Under Section 29(1) of the Anti-Money Laundering and Counter Terrorist Financing Ordinance (AMLO), anyone who operates money services without the necessary license is liable to a fine of HKD100,000 and up to 6 months of imprisonment.
What constitutes as money service operations?
- Money service operations refer to money changing and remittance services.
Is there a fee required for the fit and proper persons test?
- Yes, there is a non-refundable one-time fee applicable for personnel who wishes to undertake the test.
What is a business plan?
- A business plan is a document that provides the Money Service Supervision Bureau (MSSB) with a comprehensive overview of the business. The business plan should include details such as a detailed operation mode, organizational structure, payment system, financial information of the company, etc.
What is an AML policy?
- The AML policy lays out the applicant’s company policies, procedures and controls in the relevant operational areas. These policies should focus on the mitigation of money laundering risks to which the applicant is exposed to. Furthermore, the AML policy should fulfill the necessary statutory and regulatory requirements.