January 10, 2025
ENTITIES REQUIRING A TCSP LICENSE IN HONG KONG: KEY SERVICES AND EXEMPTIONS
A Trust and Company Service Provider (“TCSP”) license is required for businesses engaged in trust and company services, as per the Hong Kong Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance. Here is an overview of the entities that require a TCSP license:
Trustee Services
- Companies that provide trust services, such as managing trusts for individuals, families, or businesses.
- Examples: Estate planning firms, asset management companies, and wealth advisory firms offering trust services.
Nominee Shareholder Services
- Businesses that appoint individuals or entities as nominee shareholders on behalf of beneficial owners. This is often done for privacy, confidentiality, or to comply with local requirements for shareholders.
- Examples: Companies offering nominee shareholder arrangements to protect the identity of the actual beneficial owner.
Nominee Director Services
- Companies that offer nominee directors to fulfill the legal requirement of having directors for companies in Hong Kong. The nominee directors act on behalf of the actual owners and may not participate in the day-to-day management of the company.
- Examples: Firms that provide nominee directors to satisfy the legal governance structure for Hong Kong companies.
Company Formation Services:
- Businesses involved in the incorporation of companies in Hong Kong, which include registering a business, preparing corporate documentation, and ensuring compliance with local laws.
- Examples: Company secretarial services and business consultancy firms specializing in incorporation.
Fiduciary Services:
- Businesses offering fiduciary duties such as managing client assets, investments, or legal responsibilities for a fee.
- Examples: Fiduciary and asset management firms offering services related to corporate governance or wealth management.
Exemptions to the TCSP license regulation
Exceptions to relevant enterprises obtaining a TCSP license in Hong Kong are typically rare and narrowly defined. However, certain entities or individuals may be exempt from licensing obligations under specific circumstances, below are a few exemptions:
- Governmental Bodies: Certain entities authorized under the Anti-money Laundering Ordinance (AMLO).
- Authorized Institutions: Banks and deposit-taking companies licensed by the Hong Kong Monetary Authority (HKMA).
- Licensed Corporations: Entities authorized by the Securities and Futures Commission (SFC) to carry out regulated activities.
- Accounting and Legal Professionals: Certified Public Accountants (CPAs), accounting firms, and legal practitioners such as solicitors.
- Other Prescribed Persons: Individuals or entities specified by regulation.
Please note that whether you are exempted or not, engaging with legal professionals is crucial to staying compliant with the ever-changing landscape.
To wrap up
In summary, businesses offering trust and company services in Hong Kong must obtain a TCSP license to ensure compliance with regulatory requirements. Key services such as trustee, nominee shareholder and director, company formation, and fiduciary services fall under this licensing framework. While there are specific exemptions for certain entities like governmental bodies, banks, and legal professionals, it remains crucial for all businesses to stay informed and seek professional advice to navigate the complex regulatory environment.
Key Contact
Surendra Singh Chandrawat
Managing Partner
