Money Lender's Licence Hong Kong
- a22162
- Apr 16, 2024
- 8 min read
Updated: Aug 2
Money Lender's Licence Hong Kong
A Money Lender's Licence is required by anyone operating a money lending business in Hong Kong. The licensing of money lenders and money lending transactions are regulated by the Money Lenders Ordinance, Chapter 163 of the Laws of Hong Kong.
The application for a Money Lender's Licence is made to the Companies Registry. The Licensing Court is responsible for the approval of applications. In order to be granted a licence, the applicant must be deemed a "fit and proper person" to carry on the business. The process typically takes 3 to 4 months.
Here are some of the requirements for obtaining a Money Lender's Licence in Hong Kong:
The applicant must be a company registered in Hong Kong or a permanent resident of Hong Kong.
The applicant must have a good business reputation and financial standing.
The applicant must have the necessary knowledge and experience to operate a money lending business.
The applicant's premises must be suitable for the carrying on of the business.
Fit and Proper Person
In Hong Kong, obtaining and maintaining a Money Lender's Licence is subject to strict "fit and proper person" requirements, which are crucial for ensuring the integrity and responsible operation of the money lending business. These requirements are primarily governed by the Money Lenders Ordinance (Cap. 163) and further detailed in the "Guideline on Fit and Proper Criteria for Licensing of Money Lenders" issued by the Registrar of Money Lenders (Companies Registry).
Here's a breakdown of the key aspects of the "fit and proper person" criteria:
Who needs to be "fit and proper"?
The "fit and proper" assessment applies to various individuals and entities involved in the money lending business:
The applicant itself: Whether an individual, firm, or company.
If the applicant is a firm: Every partner.
If the applicant is a company:
Any person who controls the company or in accordance with whose directions or instructions the directors are accustomed to act.
Any director, secretary, or other officer of the company.
Any person responsible for the management of the money-lending business carried on at the licensed premises.
These individuals/entities are expected to remain "fit and proper" throughout the validity of the licence.
Key Criteria for "Fit and Proper Person" Assessment:
The Registrar of Money Lenders (and the Commissioner of Police, who also conducts investigations) will consider a range of factors when assessing whether a person is "fit and proper," including but not limited to:
Compliance Record:
Whether the person has any record of non-compliance with the Money Lenders Ordinance, its subsidiary regulations, licensing conditions, or other relevant laws in Hong Kong (e.g., Companies Ordinance for Hong Kong incorporated companies).
Whether the person has been completely truthful in the information provided to the Registrar in past applications or activities.
Genuineness and Readiness to Carry on Business:
Whether the person has a genuine intention and readiness to carry on the money-lending business as proposed in the application and business plan.
Demonstration of a comprehensive understanding of the money-lending business and the necessary resources to execute the business plan.
Internal Control Systems:
Whether there are adequate and effective policies, procedures, and controls in place to cover:
Anti-money laundering (AML) and counter-terrorist financing (CTF) measures.
Recruitment, training, and supervision of staff to ensure they are and remain "fit and proper."
Risk management effectively.
Avoidance of conflicts of interest.
Proper audit trails.
Financial Status:
Whether the financial position of the person is suitable for carrying on the business of money-lending.
Negative indicators include failure to satisfy judgment debts or having made compromises/arrangements with creditors.
For individuals, not being an undischarged bankrupt. For corporations, not being in the course of winding-up or having a receiver appointed.
Ability to Carry on Money-Lending Business:
Whether the person is equipped with the skills, knowledge, experience, and professionalism necessary to carry on the money-lending business efficiently and effectively. This generally includes an understanding of statutory and regulatory requirements.
Ability to carry out or manage the business competently, honestly, and fairly, and in a manner not detrimental to borrowers or the public interest.
Absence of events or incidents indicating incompetence or negligence (e.g., dismissal for misconduct).
Reliability and Integrity:
Whether the person has been found guilty of fraud, dishonesty, misfeasance, or other misconduct by a court.
Whether the person has been disqualified from being a director.
Absence of a history of complaints made reasonably and in good faith relating to money lending conduct.
Disciplinary Actions:
Whether the person has been restricted from carrying on any business, censured, or disciplined by a professional body, or is subject to any investigation by a professional body.
Application Process Considerations:
Applicants for a new licence are required to submit a business plan demonstrating their understanding and readiness to carry on the money-lending business.
The Companies Registry and the Commissioner of Police conduct investigations and examinations of submitted documents.
Applicants may be required to meet with Police Officers and attend a hearing at the Licensing Court.
The Licensing Court has the discretion to impose additional conditions on the licence.
Importance of "Fit and Proper":
The "fit and proper" criteria are paramount in Hong Kong's money lending regulatory framework. They aim to safeguard public interest, protect borrowers, and maintain the reputation of the financial sector by ensuring that only reputable and competent individuals and entities are granted money lender licences. Any failure to meet these standards can lead to the refusal of a licence application, non-renewal, or even revocation of an existing licence.
For detailed and up-to-date information, it is always advisable to refer to the official guidelines issued by the Companies Registry of Hong Kong and seek independent legal advice if needed.
Important Note for Money Lenders regarding their own fees:
It's critical to distinguish these application-related professional fees from fees that a licensed money lender can or cannot charge its borrowers. The Money Lenders Ordinance in Hong Kong is very strict about what a licensed money lender can charge borrowers. Generally, money lenders are prohibited from charging any fees other than interest from borrowers, especially "brokerage fees" or "handling fees" for procuring loans. The law aims to protect borrowers from unscrupulous practices. The only exceptions typically relate to specific, justifiable charges like solicitors' fees or valuation fees for mortgage loans, and even then, these must be handled transparently and often paid directly by the borrower to the third-party service provider, not to the money lender as their own fee.
If you are considering applying for a Money Lender's Licence in Hong Kong, it is important to consult with a professional to ensure that you meet all of the requirements. You can find more information about the Money Lenders Ordinance on the website of the Companies Registry.
Fees for Obtaining a Money Lender's Licence
When discussing "fees" in the context of a Money Lender's Licence in Hong Kong, it's important to distinguish between the statutory application fees charged by the government and the fees charged by professional service providers who assist with the application process.
1. Statutory Fees (Payable to the Hong Kong Government)
These are the official fees set out in the Money Lenders Regulations (Cap. 163A), payable to the Companies Registry and the Commissioner of Police.
There are two sets of fees associated with obtaining a Money Lender's Licence in Hong Kong:
Application Fee: This fee is paid to the Companies Registry when you submit your application for the licence.
Licence Issuing Fee: This fee is paid to the Licensing Court upon successful approval of your application and issuance of the licence.
These fees are:
Upon making an application for a new licence: HK$1,910
For the issue of a new licence: HK$8,800
There are also smaller fees for endorsements on a licence, such as for additional or substituted premises (HK$95 upon application, HK$770 for endorsement).
These fees are mandatory and are paid directly to the government bodies involved in the licensing process.
Refer to Schedule 1 of the Money Lenders Regulations for the latest and most accurate fee details.
Remember, the application fee is not refundable, so make sure you meet the eligibility criteria and have all the necessary documents before applying.
2. Professional Service Provider Fees
Applying for a Money Lender's Licence in Hong Kong is a complex process that requires careful preparation and adherence to the "fit and proper person" criteria and other regulatory requirements. Many businesses choose to engage Bestar to assist them with the application. Our professional fees can vary widely depending on the scope of services provided and the complexity of the applicant's situation.
Our professional services include:
Professional Advice: Bestar can provide expert advice on the Money Lenders Ordinance, ensure compliance with all legal requirements, draft necessary documents, and represent the applicant in dealings with the Registrar of Money Lenders and the Licensing Court.
Consultancy Services: Bestar can help prepare the comprehensive business plan, internal control manuals (e.g., AML/CTF policies), risk management frameworks, and ensures that the applicant meets the "fit and proper" criteria. We guide the client through the entire application process.
Company Secretarial Services: If a new company needs to be set up in Hong Kong for the purpose of the money lending business, Bestar can handle the incorporation process, ongoing compliance, and filing requirements.
Accounting and Financial Advisory: Bestar can help with preparing financial statements, demonstrating the financial soundness of the applicant, and setting up appropriate accounting systems.
Factors influencing professional fees:
Complexity of the application: A straightforward application from an established entity will likely incur lower fees than a new applicant with complex structures or a challenging "fit and proper" profile.
Scope of services: Engaging Bestar for full-service assistance (from initial consultation to licence issuance) will be more costly than simply seeking advice on specific aspects.
Number of individuals to be assessed: If multiple directors, shareholders, or management personnel need "fit and proper" assessments, this can increase the professional fees.
Need for bespoke policy drafting: Developing detailed AML/CTF policies, risk management frameworks, and operational manuals from scratch will incur higher costs.
Professional fees:
It's difficult to provide an exact figure without knowing the specifics, but our professional fees for assisting with a Money Lender's Licence application in Hong Kong could range from HK$50,000 to HK$300,000, depending on the factors mentioned above. A simple, well-prepared case might cost HK$50,000 - HK$100,000, while more complex or challenging cases could easily exceed HK$200,000 - HK$300,000 or more.
How Bestar HK can Help
Here are some ways Bestar HK is able to help with a Money Lender's Licence in Hong Kong:
Legal and Regulatory Guidance: Money lenders in Hong Kong must comply with the Money Lenders Ordinance. Bestar HK specializes in business licensing and regulations, and we are able to advise on the application process, ensure compliance with the ordinance, and represent you in dealings with the Companies Registry or Licensing Court.
Business Registration and Setup: Bestar HK offers company formation services. We could help establish a Hong Kong company if you don't have one already. This is a requirement for obtaining a Money Lender's Licence.
Financial and Business Planning: A Money Lender's Licence application might require submitting a business plan. Bestar HK assists with creating a business plan that meets regulatory requirements and demonstrates the financial viability of your money lending business.
Liaison with Government Agencies: The application process for a Money Lender's Licence involves the Companies Registry and the Licensing Court. Bestar HK acts as a liaison to facilitate communication and ensure a smooth application process.
To find out more about how Bestar HK can specifically help with a Money Lender's Licence in Hong Kong, contact us.
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