Canada MSB crypto license
What a Canadian MSB license can offer
You are an MSB if you are in business in Canada to offer any of the following services to the public:
Virtual currencies.
Foreign exchange dealing: Exchange one type of currency for another (e.g., USD to EUR).
Money transferring: Transfer funds and execute cross border transfers for individuals and businesses alike.
Dealing in virtual currencies: Offer virtual currency exchange and virtual currency transfer services.
Account issuance: Create personalised e-wallets, allowing your customer to store the funds or deposit them directly to a bank account linked with the customers e-wallet.
Merchant acquiring: Enable your clients to accept card payments via a POS terminal or an online payment gateway page.
No capital requirement, no annual registration fees.
Dealing in virtual currency
This includes both virtual currency exchange and virtual currency transfer services.
Virtual currency exchange services include exchanging:
- funds for virtual currency;
- virtual currency for funds; or
- virtual currency for another virtual currency.
Virtual currency transfer services include:
- transferring virtual currency at the request of a client; or
- receiving a transfer of virtual currency for remittance to a beneficiary.
You are also considered an MSB if:
- You hold a permit or license related to any of the above-mentioned services.
- You are registered as someone offering any of the above-mentioned services.
- You advertise by any means, that you engage in any of the above-mentioned services.
- You do not advertise any MSB services, but you:
- Offer money transfer services in any amount;
- Conduct foreign exchange transactions for more than $1,000 during a single transaction with the same person or entity. For these purposes, a single transaction is defined as two or more transactions related to a foreign exchange transaction of less than $1,000 each that are made within 24 consecutive hours and that total $1,000 or more; or
- Issue or redeem money orders, traveler’s cheques or other similar negotiable instruments for more than $1,000 during a single transaction with the same person or entity. For these purposes, a single transaction is defined as two or more transactions related to the redemption of money orders, travelers’ cheques or other similar negotiable instruments of less than $1,000 each that are made within 24 consecutive hours and that total $1,000 or more.
- You report the income of any of the above-mentioned services as income from a separate business for tax purposes.
Foreign exchange dealing
Conducting transactions where you exchange one type of currency for another (for example, exchanging USD for CAD). However, purchases made with foreign currency are not considered foreign transactions.
Money transferring
Transferring funds from one person or entity to another using an electronic funds transfer network or any other method.
Issuing or redeeming money orders, traveler’s cheques or anything similar
Your business issues or redeems money orders, travelers’ cheques or other similar negotiable instruments. This does not include cashing cheques made out to a particular person or entity.
Please consider:
- Issuing: To offer your own business’s money orders or travelers cheques.
- Redeeming: To repurchase your own business’s money orders or traveler’s cheques by returning the purchase price to the buyer.
- Selling or Cashing: To exclusively sell or cash the money orders or traveler’s cheques of another business that issued the money order or traveler’s cheque, does not make you an MSB.
Register your MSB
Note: On June 1, 2021, regulatory amendments, which changed obligations for all reporting entities (REs) subject to the PCMLTFA and associated Regulations, will come into force. FINTRAC expects that REs will comply with the amended Regulations but will exercise flexibility in assessing and enforcing compliance with certain record keeping and reporting requirements.
Canada as a domicile
Canada is a business-friendly jurisdiction that has a wide array of fintech businesses at all stages of growth, operating throughout the country. As a reputable country, Canada is underpinned by the consistently high standards of financial regulation that allow well-managed risk-taking and innovation. This jurisdiction remains one of the most welcoming and profitable places in the world for international businesses and foreign investors.
Benefits of MSB license in Canada
MSB Canada does not require a cash deposit
Among the requirements for obtaining an MSB license in Canada there are no special amount for Authorized capital. This is a huge benefit compared to EMI licenses in some EU countries where the capital of your company must be 350.000 euros.
Canada’s financial and banking system
Canada’s financial and banking system is considered one of the most reliable in the world and it has one of the best environments for business as itself. Canada now has the 9th largest economy in the world and is considered one of the best places to start a business with an environment and tax system that is in place for healthy and stable business growth and development. The payment systems in Canada, as well as the banks, play an important role in the financial sector. The government of Canada set fairly loyal requirements for the companies intending to provide financial services, thereby attracting not only local citizens but also foreigners in the development of the financial sector. These are the main reasons why you should obtain the MSB (money service business) license in Canada.
Faster than other licenses
The process of obtaining the MSB license in Canada may take from 2 to 5 months. This is quite fast compared to another financial licenses you can get in Europe. For example, the service time for obtaining an EMI-license in some European country is usually from 6 month till 1 year. The time you will spend on bureaucracy, you can use for developing your business instead. This is another compelling reason why you should obtain MSB license in Canada.
Requirements for MSB application purposes
Company name
Registered address
Ownership
Capital
Management
At least one director private person with experience in the financial sphere has to be appointed at the stage of incorporation, and a qualified compliance officer as well as a sound AML/CFT program and compliance system should be appointed and in place at the stage of starting operational activity of the company. Directors and AML responsible people do not have to be local if the company is registered in British Columbia or Ontario.
Compliance reporting
A company registered with FINTRAC has to complete reports about certain types of transactions according to the developed internal compliance program, reports include information about suspicious transactions, electronic fund transfer reaching specific limits, large cash transactions reaching specific limits, terrorist property.
Note: If required, TBA & Associates can provide compliance officer services in order to meet the requirements.
Want to get licensed in Canada as a Money Services Business?
We can assist you with all required services:
- Assessing qualifications for applicants applying for / renewing the Money Services Business (“MSB”) registration
- Forming a Canadian company
- Bank account opening (operational and transactional)
- AML risk assessment
- AML & CFT program
- Compliance officer recruiting
- Resident non-executive director or agent for service
- AML function outsourcing
Legal and project services
Project management
Corporate concierge
Resident non-executive director
Compliance support
Compliance programme
Risk assessment
Clear banking
Compliance officer recruitment
Timeline
TBA will complete your Canada company registration within 1 week after receiving required documents. Our business development team will draft the business plan and AML/CFT policy within 2 weeks.
Thereafter, we will submit the license application to FINTRAC and attain the license within 4 weeks. Once the license is attained, TBA & Associates’ banking team will work on corporate bank account opening immediately. On average, the engagement will be completed within 2 to 3 months.
If you are interested in setting up a Canada MSB business, kindly call or email us. We shall be pleased and ready to guide and assist you, answering all your questions and matters you may need to clarify.
Our company licensing services
— What we do and do not do
Our company is EXCLUSIVELY engaged in assisting worldwide clients, either individuals or corporate entities, to get duly and properly licensed with local Regulators and Financial Authorities to get respective official licenses to legally carry out their cryptocurrency or financial related business activities.
TBA & Associates Tax Business Advisors does not provide or carry out any sort of Cryptocurrency or Financial services!
Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.