MSB-license in Canada is a permit provided by Canadian regulative authority for organizations offering financial services, incl. various types of monetary means transfers and e-payments. Monetary services niche in Canada is growing rapidly. Getting appropriate permits is critical for any firm wishing to spread monetary services. Below we’ll look at key legal-basis aspects and regulative parameters applied to getting this type of permit.
Our team is ready to help you consultatively and practically in getting such permits. Before starting cooperation, MSB license cost Canada will be calculated for you individually with maximum optimization of your budget.
Key MSB-license getting peculiarities and nuances in Canada
To function legally, an MSB needs a permit, and business-activities of such an institution need to be exclusively within law-framework of illegal monetary means circulation prevention measures. Types of business-activities with MSB-license are listed below.
- Currencies exchanges (principle of working with exchangers is similar, that’s, USD to EUR and vice versa).
- Monetary means transfers for individuals and organizations.
- Trading virtual currencies.
- Dealing with e-wallets.
- Trade acquiring (payments through terminals).
- Crypto-exchange.
If a firm is registered outside jurisdiction and offers such services, then it needs to get an FMSB-license. There isn’t particular difference between these two categories of permission. But FMSB allows such a firm to operate in Canada with a ready-made active business-structure.
Country has highly-qualified personnel. Its strong economy, reasonable business tax-burden, and geographic accessibility make it a suitable progress location for MSB-licensed firms. The key factors of country’s attractiveness are listed below.
- Reliable legal mechanisms promoting confidence of both local and international investors.
- Country’s financial system is considered one of the most stable globally.
- Highly-set level of personnel education; it’s one of the incentives for launching innovative activities.
- Canada is strategically located next to USA, providing access to large consumer market-spaces.
- Modern infrastructure ensures efficient operation of MSB-companies.
A company that wants to obtain MSB status must do the following.
- Choose a corporate form and register a Canadian company.
- Open an account in Canada for MSB business.
- Prepare legal, financial and IT documents for licensing.
- Apply for a Canadian MSB license with FINTRAC.
- Register with FINTRAC.
- Develop and implement an AML/CTF compliance program.
- Comply with client identification and KYC requirements, record keeping and reporting.
Typical documentation for submitting a licensing application is listed below.
- Business documents (constituent documents, etc.).
- Written AML and KYC policies.
- Identification information about managers.
- Detailed information about IT systems, data security and cybersecurity measures.
As stated earlier, FINTRAC is the body that issues or denies licenses in Canada. To successfully pass verification by this body, you will need to do the following:
- undergo pre-check at the Financial Transactions and Reports Analysis Center of Canada. To do this, you will need to provide the Center with the name of the corporation, its actual address, all the necessary information on the contact person from the company and, of course, the types of services that the company intends to provide;
- start the registration procedure with the Financial Transactions and Reports Analysis Center of Canada. This stage involves submitting information about the company’s bank account, compliance officer and total number of staff. You will also need to provide information about the incorporation of the company along with statements about the director and anyone who owns more than 20% of the shares.
Thus, the stages of registration and licensing of MSB in Canada can be summarized as follows:
- consultation with our specialist who will help determine the most optimal form for the purposes of your business, explain licensing requirements, assess your needs and help prepare the necessary documents;
- registration of a Canadian company;
- opening an account in Canada for MSB. Due to the increased risks of financial fraud, banks are more attentive to such applications and may require additional verification and identification;
- preparation of legal, financial documents, information on technical systems and security procedures;
- sending the application form and documents to the regulator.
FINTRAC will conduct a due diligence review of the company, which will review the company’s legal documentation, financial information, goodwill and compliance with legal requirements. The company must have the following persons on its staff.
- CEO, who is responsible for the overall strategic management of the company, making key business decisions and interacting with regulators.
- COO, who is responsible for operational activities.
- CFO, who is responsible for the financial planning, accounting, analysis and reporting of the company.
- CMO, who is responsible for marketing strategies, promoting the company’s products or services, and interacting with customers.
- CTO, who handles the technical aspects of the business, including the development and support of information systems and technology infrastructure.
Main responsibilities assigned to companies holding an MSB-license are next-mentioned.
- Information about clients who will use the company’s services. If the amount of the transaction carried out by the client is quite significant (10 thousand US dollars), then such a client must be additionally verified.
- If the company’s services are used by persons holding political positions in the country, the company must take measures to obtain information about the origin of such client’s funds.
- Financial records must be maintained and stored properly. Financial transactions with additional customer verification must be kept for five years from the date of such transaction.
Organizations with an MSB-license must appoint compliance managers. These professionals play a key role in monitoring and ensuring a company’s compliance with applicable AML/CTF laws and procedures. By the way, obtaining an MSB-license obliges companies (in addition to standard KYC checks) to conduct customer due diligence (CDD). This is the process of assessing a client’s risk profile to determine whether it is safe to do business with them. In addition to identity verification, CDD includes identifying and verifying the identity of all beneficial owners or companies wishing to open an account.
Our experts will become your reliable allies on the path of your commercial development. We will help you with advice and practical support, based on your personal wishes and priorities.
