November 25, 2024
PROCEDURE FOR OBTAINING A MONEY SERVICE OPERATOR LICENSE (“MSO”)
UNDERSTANDING THE MSO LICENSE
If a person operates or wishes to operate a money service, he or she is required to apply for a license. MSO license is issued by the Customs and Excise Department (“C&ED”) which authorizes businesses to provide money services in Hong Kong. It is governed by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (“AMLO”). This license ensures that money service operators adhere to the rules and regulations of AMLO which are designed to prevent illicit financial activities.
ELIGIBILITY TO OBTAIN A LICENCE
Below are the criteria that need to be fulfilled before applying for the MSO license:
Under section 30 (3) of the Anti-Money Laundering and Counter-Terrorist Financing
Ordinance AMLO, the CCE may grant or renew a license to an applicant to operate a money service.
(a) Where the applicant is an individual, the individual and each ultimate owner is a fit and proper person to operate a money service;
(b) Where the applicant is in a partnership, each partner and each ultimate owner in the partnership is a fit and proper person to operate a money service; or
(c) Where the applicant is a corporation, each director and each ultimate owner of the corporation is a fit and proper person to be associated with the business of operating a money service.
An ultimate owner concerning an applicant for a license or a licensee that is a corporation means an individual who –
(a) Owns or controls, directly or indirectly, including through a trust or bearer shareholding, more than 25% of the issued share capital of the corporation;
(b) Directly or indirectly, entitled to exercise or control the exercise of more than 25% of the voting rights at general meetings of the corporation; or
(c) Exercises ultimate control over the management of the corporation.
PROCEDURE FOR APPLYING FOR A LICENSE
An applicant needs to complete an application form (Form 1), supplementary information sheet, relevant annex and submit
a:
- Business Plan; and
- AML/CFT policies (hereafter referred to as “AML Policy”).
For a new application to operate a money service at a particular premise, at least two photographs of size 102×152 mm (i.e. 4R‐size) should be attached to the application form. One photograph should show the inner part such as the counter or office of the particular premises, whereas another photograph should show the outer part such as the signboard of the particular premises. Where an applicant also has separate premises that serve as LPS and/or LMO, at least two photographs should also be attached for each additional LPS and/or LMO. The photograph requirements for LPS and LMO are the same as those applicable to a particular premise.
REQUIREMENTS FOR THE APPLICANT OR HOLDER OF AN MSO LICENSE
- An applicant is required to appoint a competent and a Money Laundering Reporting Officer (“MLRO”) to act respectively as the focal point for the oversight of the applicant’s anti-money laundering and counterterrorist financing (“AML/CFT”) systems and compliance measures and the central reference point for reporting suspicious transactions.
- The sole proprietor, any one of the partners and directors of an applicant or a licensee must pass a Competence Assessment (Assessment) conducted by the C&ED.
- Any person carrying on business in Hong Kong is required to register the business under the Business Registration Ordinance, Cap. 310, Laws of Hong Kong.
SUPPORTING DOCUMENTS OF THE APPLICANT’S PARTICULARS
Sole proprietorship:
- A copy of a valid Business Registration Certificate.
- A copy of the Extract of information on the Business Register.
Partnership:
- A copy of a valid Business Registration Certificate.
- A copy of the Extract of information on the Business Register.
Local company:
- A copy of a valid Business Registration Certificate.
- A copy of the Certificate of Incorporation.
- A copy of the latest Annual Return (Form NAR1) and all documents filed with the Companies Registry after filing of the latest Annual Return.
- A copy of Incorporation Form NNC1 (for a company limited by shares) or Form NNC1G (for a company not limited by shares) for a newly established company.
- Information on group structure and percentage of shareholdings of each group member.
- A copy of the Memorandum and Articles of Association.
SUPPORTING DOCUMENTS OF PARTICULARS OF THE SOLE PROPRIETOR AND EACH PARTNER/DIRECTOR / ULTIMATE OWNER OF THE APPLICANT
Hong Kong resident
- Completed Fit and Proper Person Declaration Form 3A together with Appendices I & II.
- A copy of the Hong Kong Identity Card.
Non Hong Kong resident
- Completed Fit and Proper Person Declaration Form 3A together with Appendices I & II.
- A copy of the Biodata page of the Travel Document.
OTHER REQUISITE DOCUMENTS AS SPECIFIED IN THE LICENSING GUIDE
- Business Plan endorsed by sole proprietor / each partner/director / ultimate owner.
- Anti-money laundering and counterterrorist financing policy endorsed by sole proprietor / each partner/director / ultimate owner.
- A copy of the agreement/contract with each local and/or foreign third party involved in the process of money service.
- A copy of the Hong Kong Identity Card of CO and MLRO.
- A copy of valid employment contracts for CO and MLRO.
- A copy of residential address proof of CO and MLRO, e.g. utility bills, and bank statements, issued within the last three months from the application date.
- Proof of bank account ownership issued by the bank concerned, e.g. a copy of a statement of the bank account held by the applicant for money service business.
- An acknowledgment from the bank that the bank account held by the applicant is used for operating a money service business.
CONCLUSION
For any individual or any business intending to provide a money service in Hong Kong, obtaining an MSO license is crucial. The fact that Hong Kong is one of the major financial cents in Asia. By obtaining and maintaining an MSO license, businesses can not only ensure compliance with the law but also contribute to the integrity of Hong Kong’s financial system, fostering a safe and secure environment for their operations.
HOW WE CAN HELP?
- Our team assists in applying for the application, for renewal of the license including drafting of the documents as per AML/CTF policies.
- We offer expert guidance on complying with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, ensuring the operations align with the latest regulations.
- We also assist in setting up a local or foreign entity along with the office premises, including all operational systems, ensuring to meet all the compliance for attaining the MSO license.
- We assist in choosing the right type of entity as per the needs and requirements of the business.
For more information or queries, please email us at
[email protected]
Key Contact
Surendra Singh Chandrawat
Managing Partner
