Getting a Money Services Business (MSB) license in Canada requires strict compliance with rules from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
To get one, you must meet specific requirements and go through some procedures. We have prepared an inclusive guide on the requirements, procedures, and benefits of acquiring a Canada MSB license.
Criteria for Being an MSB in Canada
To be recognized as an MSB in Canada, your business must carry out any of the following:
- Currency transactions over CAD $10,000 per transaction.
- Foreign currency exchange.
- Funds transfer (including electronic fund transfers).
- Issuance or redemption of money orders, traveler’s checks, or other negotiable instruments.
- Trading virtual currency such as cryptocurrency exchange services.
- Financial services related to bill payments or processing payments for goods and services.
Requirements for MSB License in Canada
Physical Presence and Registration
- Establishment Of A Physical Office: It is mandatory to open and maintain a physical office within Canada.
- Registration With FINTRAC: All the MSBs are required to register under FINTRAC, which is a Canadian financial intelligence unit responsible for combating money laundering and terrorist financing activities.
AML/CTF Compliance
- Anti-Money Laundering (AML) And Counter-Terrorist Financing Policies: Develop and put into effect strong policies on AML/CTF risk control measures as well as monitoring strategies.
- Customer Identification: Enforce stringent client identification procedures while keeping records that relate to reporting suspicious transactions to FINTRAC.
Corporate Governance
- Director Requirements: At least one director should have economic capability enough for appointment.
- Compliance Officer: Appoint a person responsible for compliance with AML/CTF guidelines.
Documentation and Reporting
- Documentation: Provide certificates of good standing for all founders, shareholders, and employees.
- Reporting: Continuous monitoring of transactions done, maintenance of transaction records, as well as submitting reports to FINTRAC when necessary.
Procedure for Obtaining an MSB License in Canada
Initial Document Collection
Collect required documents such as founders’ passports, proofs of address, and criminal record certificates.
Preliminary Project Analysis
Preliminary analysis of the business scope, preparation of KYC documentation, and drafting of AML/CTF policies.
Business Registration
Under an approved name, register a company, select a legal address, determine share capital, and prepare corporate documents notarized by a Canadian notary.
Bank Account Opening
Open a corporate bank account meeting regulatory requirements, including discussions with payment institutions and the deposit of share capital.
Pre-Application Preparation
Customize documents for mining-specific AML/CTF compliance, recruit and train staff members, and then submit your license application to FINTRAC.
Registration Process
Submit all necessary papers to FINTRAC, respond to any clarification requests, and negotiate with FINTRAC representatives so as to ensure adherence.
License Issuance
Upon the successful completion of review by FINTRAC, an MSB license is issued and it appears in the registry of licensed MSBs.
If it seems too complicated to cope with all alone, we recommend consulting professionals: they will help you get any license (be it a crypto license or any other option) and cope with any problems.
Advantages of Registering Your MSB in Canada
- Tax Advantages: The environment for taxation is competitive in Canada’s MSBs.
- Legal Compliance: Do your business with credibility and within reasonable bounds or customer trust.
- Access To Financial Services: Establishing a licensed MSB enables easier banking access and payment processing services.
- Market Expansion: A Canadian MSB license provides a means for expansion into one of the world’s most developed financial systems.
Wrapping Up
By following these guidelines and meeting all requirements stipulated herein, entrepreneurs can smoothly go through with the process of registering an existing money services business (MSB) in Canada while ensuring compliance with regulatory standards, thus positioning their businesses for growth and success in the financial service sector.
