Obtaining MSB license in Canada

March 24, 2021

Where does the Fintech Industry stand now?

It has and still is experiencing massive growth worldwide.

The fintech market and industry have continued to expand, providing access to financial services even through pandemic – with strong growth of financial instruments and services available for society. Access to affordable financial services is critical for poverty reduction and economic development, especially in crises like these. Fintech innovations are providing financial services for the cost that is acceptable and possible for more people without even having face-to-face interactions, which is a huge aspect in the modern day’s world.

Why choose licensing in Canada?

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.

What is MSB (money service business)?

MSB (money service business) is a non-bank financial institution that is regulated by FINTRAC and it allows carrying certain financial activities.

Money services businesses provide currency exchange and conversion services for organizations all over the world. Usually, MSBs provide a variety of cheaper solutions for money converting and transmitting and now the term MSB covers a wide range of organizations.

What does Money Service Business do?

MSBs carries out the following financial activities:

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.

What are the requirements to become MSB in Canada?

FINTRAC (Financial Transactions and Reports Analysis Center of Canada) is the financial intelligence agency, which reviews the documents and decides whether to issue the license.

The requirements for the application are listed below:

Company name – must contain at least two words, one of them should describe the main business activity of the company, for example, “payments”, “remittance” etc. Abbreviations are not accepted.
Registered address – for companies managed and owned by a non-resident of Canada the most convenient province for company formation in British Columbia with a commercial address in Vancouver.
Capital – minimum capital is not determined by the supervising authority, but we advise declaring at least 5 000 CAD.
Management – at least one director private person with experience in the financial sphere has to be appointed at the stage of incorporation, person responsible for AML/CTF should be appointed at the stage of starting operational activity of the company. Directors and AML responsible people do not have to be local.
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.
Ownership – at least one person (legal or private).

Need help with the registration of MSB in Canada?

We can help by navigating you through the process of registration as we have with other 20+ companies with an excellent 100% success rate. If you have any questions regarding this, do not hesitate to contact Fintech Finesse, we will help you to succeed.

If you have clients that would be interested in our help, do not hesitate to become our agent and earn commission on all referrals.