The first thing we need to understand before digging deep into the Money Service Operation license (MSO) is the general money service in Hong Kong.
In Hong Kong, the system of money service incorporates a money-changing service and remittance service.
The money-changing service creates an exchange of currency systems that run as businesses in Hong Kong.
On the other hand, the remittance service operates by sending money abroad to places outside Hong Kong.
It also arranges for the receiving of money from abroad.
However, to operate this money service, one must obtain an MSO license.
The Customs and Excise Department (C&ED) of Hong Kong normally deals with granting the license.
Any person who has any interest in money service and wishes to operate in money service is required to obtain a license before operating a money service.
The Anti‐Money Laundering and Counter‐Terrorist Financing Ordinance (AMLO) also clarifies bodies exempt from a license.
Other than the government itself, the following bodies are also exempt:
You can find the full list here.
Hong Kong is one of the leading prospective countries for starting and owning/operating a business.
This is why the majority of global businesses have their host firms in Hong Kong.
Several factors make it even more appealing to operate in Hong Kong, which includes:
These are just some of the benefits that come along, making Hong Kong one of the leading centers in Asia.
Money needs to come and go.
Therefore an MSO license makes the operation easier, time-efficient, legal, and convenient.
There are not many requirements for obtaining the license and compared to other countries such as Canada, obtaining it is much easier.
To obtain a license in Canada, at least one director must have a Canadian residency or a work permit, whereas, in Hong Kong, it is not a requirement to have a local director.
According to the AMLO, an MSO license can be granted by the Commissioner of Customs and Excise to any applicant as long as the following conditions are met:
All applicants of the MSO License must complete a Form of Fit and Proper Person Declaration.
The applicants must submit this form along with all other supporting documents to the Customs and Excise Department in Hong Kong.
The key stages of the application process are as follows:
The Application Process for the license will firstly require the completion of the application form, supplementary information sheet, and relevant annexures.
The applicant should also submit an (i) Business Plan; and (ii) AML/CFT (anti‐money laundering and counter‐terrorist financing policies (hereafter referred to as “AML Policy”).
More information regarding a Business Plan and AML Policy can be found here.
Once the applicant has prepared the requisite information, they must submit them with photocopies of the documents to the (C&ED).
The applicant can access the form sheet, annex, and guidelines for submitting the business plan and AML policy from the C&ED’s website here.
If the application is for a new premise to operate a money service, it is important to note that the applicant must attach two or more photographs of the inner and outer part of the office/premise.
If the applicant also has another separate premise used as a local place for storage (LPS), two or more photographs of the area must be attached.
When the applicant has failed to submit the required information or documents, the application will not be processed by the C&ED.
Nevertheless, if it has been successfully processed, the applicant will be asked for an interview through notice.
The applicant will also receive a demand note for the payment of all required fees for the license.
Whilst being interviewed, the payments and original documents will be verified.
The applicant will go through a fit and proper person test, which is relevant in determining whether the applicant is fit to operate the money service business.
The applicant shall then sign the application and will be briefed on statutory licensing and compliance requirements.
It isn’t easy, however, to set a fixed time frame for the application process.
The process may take longer or shorter depending on multiple factors such as the collection of documents, performing the fit and proper test, etc.
In most cases, an MSO license is valid for a period of two years in Hong Kong after which the license has to be renewed.
All applicants who wish to continue operating their money service must apply for a renewal before the expiry date of their existing license.
However, there are certain cases where an MSO license cannot be renewed:
According to Section 29(1) of AMLO, it is a direct offense if an individual, partnership or corporation operates a money service without the appropriate license in Hong Kong.
Anyone who commits such an offense can be imprisoned for up to 6 months and be fined HK$100,000.
The Commissioner of Customs and Excise can refuse to grant an MSO license in the following cases:
You can file an appeal against the Commissioner of Customs and Excise decision to the Anti-Money Laundering and Counter-Terrorist Financing Review Tribunal within 21 days of receiving the notice of rejection following an application for an MSO license.
You should also keep in mind that if your application is rejected, the fees cannot be refunded which is why you need to ensure that your first application is fully completed and that there is no missing information or documents.
Once you receive your license there are certain requirements you must follow set out by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance along with any other guidelines provided by the Commissioner of Customs and Excise.
These requirements include:
Obtaining an MSO License is extremely important for anyone or any entity wishing to operate a money service.
The number one benefit of obtaining an MSO License in Hong Kong is that the country is one of the leading financial hubs in Asia and the rest of the world.
The process is extremely straightforward and quite fast compared to other licensing procedures.
Need help applying for an MSO license?
Reach out to Air Corporate at [email protected] and we’ll help your business get properly licensed asap.
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