Money Service Operators Licensing Guide
Updated: Apr 30
Licensing Guide for Money Service Operators (MSOs)
This licensing guide is for individuals and corporations who operate or wish to operate money service in Hong Kong. It sets out notes on the licensing requirements under the AMLO and explains the application procedures in details.
This licensing guide applies to an applicant for grant of an MSO licence (applicant).
Introduction
Hong Kong Customs and Excise Department (C&ED) is the agency that regulates Money Service Operators (MSOs). The relevant powers are set out in Chapter 615 of the Anti-Money Laundering and Counter‐Terrorist Financing Ordinance (AMLO).
License Application
Who needs to apply for a license
If a person operates or wishes to operate a money service, he or she needs to apply for a license.
What is money service?
A money service means a currency exchange / [money changing] service or remittance service.
What is a currency exchange / [money changing] service?
A currency exchange / [money changing] service means currency exchange service carried on as a business in Hong Kong, but does not include such a service in connection with a principal business, such as a retail business that accepts foreign currency in transactions or a retail business run by a hotel manager, if the service
(a) operate on hotel premises primarily for the convenience of hotel guests; and
(b) only include transactions in which the person purchases non-Hong Kong currency in exchange for Hong Kong dollars.
What is a money transfer / [remittance] service?
Remittance service means one or more of the following services carried on as a business in Hong Kong—
(a) sending or arranging to send money outside Hong Kong;
(b) receiving or arranging to receive money from a place outside Hong Kong;
(c) arranging for payment to be received outside Hong Kong.
Additional premises for operating money services
During the period of application for the grant of a licence, no separate application is required for additional premises operating money services other than the principal premises. The applicant must include in the license application each additional establishment operating a money service.
When do I need to apply for a license?
Anyone must apply for a license from the CCE before operating a money service.
What is the licensing form of MSO?
The MSO's license shall be in the form specified by the CCE and must—
(a) specify—
(i) in the case of a license to operate a money service on specified premises, the address of each premises at which the licensee may operate a money service; or
(ii) in any other case, the licensee's correspondence address;
(b) are subject to conditions imposed or amended under section 30, 31 or 32 of the AMLO; and
(c) specify the period of validity of the licence.
What is the validity period of the license granted?
Normally, licenses are granted for a period of 2 years. If the licensee wishes to continue to operate money services, he must apply for renewal of the license before the license expires.
In any other case, the license is no longer valid -
(a) if the licensee is an individual, on the death of the individual;
(b) if the licensee is a partnership, on dissolution of the partnership; or
(c) if the licensee is a company, at the commencement of winding up of the company.
Exemption
Are there any licensing exemptions?
Yes, according to the AMLO, MSO licensing requirements do not apply to government nor to:
(a) an authorized institution;
(b) a licensed corporation that operates a money service ancillary to the principal business of the corporation;
(c) an authorized insurer who carries on a money service incidental to the insurer's principal business;
(d) an authorized insurance broker that operates money services in connection with the principal business of the broker;
(e) an appointed insurance agent who operates money services incidental to the principal business of the agent;
(f) an SVF licensee who operates a money service that is incidental to the licensee's principal business; or
(g) a system operator or settlement institution of a designated retail payment system that operates money services that are ancillary to its business as a system operator or settlement institution.
CCE will not accept any application to grant a license if the applicant has been exempted from the MSO license requirement.
Eligibility for license
Who is eligible for a license?
Pursuant to section 30(3) of the AMLO, the CCE may issue or renew a license to operate a money service to an applicant only if the CCE is satisfied that—
(a) if the applicant is an individual, the individual and each ultimate owner is a fit and proper person to operate a money service;
(b) if the applicant is a partnership, each partner and each ultimate owner of the partnership is a fit and proper person to operate a money service; or
(c) If the applicant is a corporation, every director and every ultimate owner of the corporation is a fit and proper person in connection with the operation of a money services business.
Who is the ultimate owner?
1. In the case of an applicant for a license or a licensee who is an individual, the ultimate owner means:
(a) another person who ultimately owns or controls the money service business of the first-mentioned individual; or
(b) if the first-mentioned individual is acting on behalf of another person, that other person.
2. The ultimate owner in relation to a license applicant or licensee as a partnership is an individual who:
(b) is directly or indirectly entitled to exercise or control the exercise of more than 25% of the voting rights of the partnership; or
(c) exercises ultimate control over the management of the partnership.
3. The ultimate owner in relation to a license applicant or licensee as a company is an individual who:
(a) owns or controls, directly or indirectly, more than 25% of the company's issued share capital, including through trusts or bearer shares;
(b) is directly or indirectly entitled to exercise or control the exercise of more than 25% of the voting rights at general meetings of the company; or
(c) exercises ultimate control over the management of the company.
Particular premises used to operate a money service
The particular premises that require registration are the venues where you operate currency exchange / [money changing] services and/or remittance services. Here are some examples of particular premises that operate a money services business:
(a) the premises are occupied for the operation of a money service;
(b) the premises are advertised (including display of signs) to meet customers there; and
(c) the premises are normally controlled by the licensee, either as landlord or tenant.
However, a premises is not considered a particular premises operating a money service if you are merely a visitor or customer of a establishment such as a dining establishment or a bank, or simply a visitor or customer of an accountant or law firm which handles accounting or legal documents for your company. .
---
p8
4.5 What if there are no particular business premises? The following examples are not considered as operating a money service at particular premises: (a) operating a money service without any fixed premises, e.g. door‐to‐ door service; (b) meeting customers at a customer office; or (c) conducting transactions with the use of mobile electronic devices. If there are no particular premises for operating your money service, you must provide a local management office, a correspondence address, and a local place for storage of books and records in the application form. 4.6 What particular premises are considered suitable or not suitable to be registered for the operation of a money service? In addition to the relevant statutory requirement stipulated in the AMLO, C&ED will consider the suitability of a particular premises from the perspective of appropriateness and legitimacy of the licensee in operating a money service, e.g. without infringing the consumer’s rights under applicable laws. The following examples are considered suitable to be registered for the operation of a money service: (a) Particular premises should be accessible by C&ED officers for carrying
xxx
Is there a licence application fee?
Yes, there is a fee for application for the grant or renewal of a licence (see Fee schedule at section XIV).
The applicant must pay a fee for each additional business premises in which a money service is operated to be registered (see Fee Schedule at section XIV).
Will an application fee collected for processing of the application for grant or renewal of an MSO licence be refunded if the CCE refuses to grant or renewal a licence?
No refund will be made for application fee collected irrespective of whether the application is subsequently approved or refused.
Connect with Us
Licence applicants and licensees may refer to the Guideline on Criteria for Determining Fitness and Propriety and its Supplementary Guideline issued by the CCE for further details.
https://eservices.customs.gov.hk/MSOS/download/guideline/Licensing_Guide_en.pdf