MSB Licensing in Canada: A Comprehensive Guide

Setting up an enterprise in Canada can be a strategic step because of the country’s rapidly developing fintech industry, appealing to oversea backers. Nevertheless, in order to provide offerings related to finances, organizations are obliged to abide by local rules and get an MSB permit.

This guide will make you comprehend the main features of the topic.

MSB and FMSB: Definition and Difference

MSBs are any entities, other than banks, which offer monetary services like currency conversion, international payment processing, fund transference, issuing and cashing out money orders, trading and transferring online currencies, and providing personal accounts. They offer services locally.

In contrast, FMSBs’ whereabouts are outside the country in question, but they provide offerings to Canadians.

Both of these types of entities are obliged to be enrolled with the local fiscal intelligence agency.

What kinds of MSBs exist?

Types of entities offering monetary services are presented below:

• Currency Conversion: Such entities exchange both conventional and virtual currencies;
• Online Payment Facilitators: These ventures serve as brokers for fiscal transactions, guaranteeing quick and protected methods for transferring of funds;
• Funds Transfer Providers: Such enterprises enable the movement of money between people and enterprises;
• Global Remittance Services: These businesses concentrate on sending money globally, usually for personal purposes.

The Significance of MSB License

Organizations in question guarantee abidance by AML rules, safeguarding the fiscal systems. In Canada, there are severe AML demands regarding MSBs activities. Among them are:

• Staff development;
• Client identification;
• Oversight of transactions;
• Informing about doubtful operations;
• External assessments of AML abidance policies.

These demands are obliged to be satisfied in order to function and offer services in the boundaries of the state lawfully.

When is the permit required?

In case your entity provides any of the specified services in Canada, you are obliged to get an appropriate authorization, no matter where you are located. This encompasses:

• Offering services directly to Canadian clients;
• Maintaining a physical workplace in the country or operating a Canadian website;
• Hiring workers there.

The procedure of getting Canadian MSB License

The two main stages are presented below:

1. Submission of an online request form to FINTRAC, adding data about your entity structure, model, address of website, administration, and legal name. Then, agency will reach out to you within a period of five working days;
2. In case of preliminary approval, you are able to submit a comprehensive enrollment form that includes information such as abidance policies, number of workers, accounts in fiscal establishment, and assessed yearly transactions. The fiscal agency will inspect this form and inform you of the outcome.

The primary papers required for the process are:

• Entity enrollment documentation;
• Records that identify owners and employees;
• Operational blueprint;
• Statements from bank accounts;
• Details about AML officer and expertise;
• Overview of corporate organization and employee information;
• List of offerings provided;
• Contact info.

Providing that all demands are satisfied and papers are collected, the procedure of examination of request will take approximately three weeks. Usually, time for getting the permit can vary from a few weeks to several months.

Conclusion

Eventually, getting a permit that allows provision of monetary offerings demands comprehending a supervisory structure of the state and abiding by rules put forward by the local oversight authorities.

Contact us and we will help to sort out all complicated details and provide you with assistance in the procedure of permit acquisition.