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Become a Money Service Operator in Hong Kong – Part 1

Posted by: Christian Reeves
Category: Hong Kong

Hong Kong exists in a very unique position in the banking world. Hong Kong is right next to the huge Chinese market, but it still enjoys some political freedom and western tendencies that make it a great country to do business with.

It will come as no surprise to anyone reading this article that Hong Kong is the place to be if you wish to enter the Asian Market. Still, its harsh competitive nature and its expensive deals make it a hard place to survive in.

For this reason, innovation is key. While the huge Chinese market will only be growing and expanding in the next decades Hong Kong’s financial security will always be an attractive option for said Chinese individuals and Corporations.

Becoming a Money Service Operator in Hong Kong is a fantastic way to get ahead of the curve and position yourself as a prime option for potential investors. Just like all the other countries around the world, it takes a little bit of time, money, and due diligence to obtain a license to start operating in the Asian powerhouse.

The department in charge of granting or revoking license applications is called the Customs and Excise Department. This department oversees the guidelines on how to operate as a money service operator for both corporations and individuals.

Included in the guidelines for the Customs and Excise Department are the Anti Money Laundering laws and the Counter-Terrorist Financing Ordinance. As you can imagine there is a lot of due diligence and compliance associated with making this government institution happy.

A money service operator is not the same as an offshore bank or an international financial entity. A money service means a money-changing service or a remittance service with the purpose of exchanging currencies.

A remittance service is a financial action that arranges or sends money to any place outside of Hong Kong. The same goes for receiving money from outside the country. Money must not be sent from within the country.

The good news is that your application does not need to limit to one local business, you can put inside the application the amount of premises that you wish to open in the country. Of course, if one is revoked all of them are revoked.

Fees involving this type of license may vary depending on your proposed activity. You have to consider the fact that you are obtaining this license from Hong Kong, an expensive country in all matters involving financial activities.

Once your license is granted your validity period lasts two years. You will have to renew your license every two years once it is granted. It is important to start the process of renewing your license before it expires.

As I mentioned it is a long and difficult process to obtain a money service operator license in Hong Kong. Before you begin your application it is recommended to see if you are exempt from obtaining a license, such as:

– An authorized institution;
– A licensed corporation that operates a money service that is ancillary to the corporation’s principal business;
– An authorized insurer that operates a money service that is ancillary to the insurer’s principal business;
– An authorized insurance broker that operates a money service that is ancillary to the broker’s principal business;
– An appointed insurance agent that operates a money service that is ancillary to the agent’s principal business;
– An SVF licensee that operates a money service that is ancillary to the Licensee’s principal business; or
– A system operator or settlement institution of a designated retail payment
– A system that operates a money service that is ancillary to its business as a
– System operator or settlement institution.

Also, it is important to highlight and to make clear who can obtain a money service operator license:

– Where the applicant is an individual, the individual, and each ultimate owner is a fit and proper person to operate a money service;
– Where the applicant is a partnership, each partner and each ultimate owner in the partnership is a fit and proper person to operate a money service; or
– 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
– The business of operating a money service.

I hope you’ve found this article on becoming a Money Service Operator in Hong Kong. For more information, or for assistance in starting a bank in Hong Kong contact us at info@banklicense.pro