Money Services Business registration in Canada (MSB, FMSB)

Money Services Business registration in Canada (MSB, FMSB)

Money Services Business registration in Canada (MSB, FMSB)

We assist in registration of a Money services business (MSB) and Foreign Money Services Business (FMSB) in Canada

If you are looking to register a Money services business (MSB) or Foreign Money Services Business (FMSB) in Canada, Advapay can offer you its legal, technical and business expertise and consulting support.

01

Application preparation, communication with the regulator, business services

Company registration in Canada

Provision of the registered and records office address in Canada

Registration with FINTRAC before receiving full authorization

02

Preparation of legal, financial and IT documents

Development of the full package of internal documents, including the written compliance policies and procedures, current compliance training program, risk assessment and appointment of the Compliance Officer.

Overview of Money Services business (MSB) and Foreign Money Services business (FMSB)

Money services businesses (MSBs):

1) Offer one or more of the following services to the public:
– Foreign exchange dealing
– Remitting or transmitting funds
– Issuing or redeeming money order or similar negotiable instruments
– Dealing in virtual currency

2) Have a place of business in Canada
– Are incorporated in Canada;
– Have a physical location in Canada; or,
– Have employees, agents or branches in Canada.

Foreign money services businesses (FMSBs):

1) Offer one or more of the following services to the public:
– Foreign exchange dealing
– Remitting or transmitting funds
– Issuing or redeeming money order or similar negotiable instruments
– Dealing in virtual currency

2) DO NOT have a place of business in Canada:
– Are not incorporated in Canada;
– Do not have a physical location in Canada; or,
– Do not have employees, agents or branches in Canada.

3) Direct services at persons or entities in Canada.

4) Provide these services to clients in Canada.

Main services

MSBs and FMSBs can offer any of the following services to the public:

1) Foreign exchange dealing

2) Remitting or transmitting funds

3) Issuing or redeeming money order or similar negotiable instruments

4) Dealing in virtual currency

Regulator and legislation

To condust Money services business, the company must be registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). FMSBs and MSBs must comply with the full requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit (FIU). The Centre assists in the detection, prevention and deterrence of money laundering and the financing of terrorist activities. FINTRAC was established by, and operates within the ambit of, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations. The Centre is one of several domestic partners in Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) regime, which is led by the Department of Finance.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) facilitates combatting the laundering of proceeds of crime and combatting the financing of terrorist activities, establishes the Financial Transactions and Reports Analysis Centre of Canada and amends and repeals certain Acts in consequence.

Main requirements

Personnel
At the registration stage, at least one director should be appointed – the individual with experience in the financial sector.

Name of the company
The name of the business should contain at least two words, one of which must describe the company’s main business, ex. “payments”, “money transfers”, etc. The abbreviations are not accepted.

Beneficiaries
Information about beneficiaries of the business – citizenship information, non-criminal certificates, source of wealth or other requirements.‎

Initial Capital
FINTRAC has not set a minimum initial capital. It is advisable to deposit and pay a certain amount of the authorised capital to show the seriousness of intention for business planning and development.

Office
For MSBs, the company should rent an office and show the lease contract in force, as well as the photo of its premises at the stage of obtaining a license. You can choose any province to set up a company. For non-residents, British Columbia is the most suitable option.

Safeguarding account
The minimum capital is not determined by the supervisory authority, but it is advisable to deposit and pay a certain amount of the authorized capital in order to show the regulator the seriousness of intentions for business planning and development.

Application and authorisation process

Fees
There are no fees associated to the registration process with the Financial Transactions and Re-ports Analysis Centre of Canada (“FINTRAC”).

Application registration process
The registration can be completed online.

Registration timeframe
Pre-registration process: 20 business days.
Registration Process: 14 days, unless a clarification request was sent to the applicant following the submission.
Note: there may be some delays as a result of the COVID-19 Pandemic.

The procedure of obtaining a permission to perform Money services

Step 1 – Company registration in Canada

Step 2 – Preliminary registration with FINTRAC and an interview with a FINTRAC representative.

Step 3 – Registration in FINTRAC

Documents and information submitted

1) Name of the company that is going to obtain the license;

2) Legal (actual) address of the company;

3) Contact details of the company representative;

4) Description of the services and activities the company plans to provide.

5) Information about the company’s bank account;

6) Information about your Compliance Officer;

7) Staff headcount;

8) Registration information (if your business is a corporation);

9) Information about the owners of your MSB and senior management – for example, their name and date of birth (about the company directors and each person who owns or controls 20% or more);

10) Estimate of the expected total amount of transactions per year for each MSB ser-vice you provide;

11) Detailed information about each branch;

12) Details about each MSB agent.

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