A business that operates a money changing service or a remittance service in Hong Kong must hold a money service operator (MSO) licence from the Customs and Excise Department, under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Licensed operators must meet fit and proper requirements and comply with strict AML/CTF obligations.
Operating without a licence is a criminal offence. Stored value facilities and virtual asset services are covered by different licensing regimes, regulated by the HKMA and the SFC respectively.
At a glance
- Activities
- Money changing and remittance for others, as a business
- Regulator
- Customs and Excise Department
- Exempt
- For example, banks
- Timing
- Allow several months
Which regime applies?
| Activity | Licence and regulator |
|---|---|
| Money changing | MSO licence: Customs and Excise Department |
| Remittance | MSO licence: Customs and Excise Department |
| Stored value facility (for example, e-wallets) | SVF licence: Hong Kong Monetary Authority |
| Virtual asset trading platform | Licence: Securities and Futures Commission |
| Dealing in precious metals and stones | DPMS registration: Customs and Excise Department |
Licensing requirements in brief
- The operator, its directors and ultimate owners must be fit and proper.
- Premises where the service is operated must be specified.
- AML/CTF systems must be in place: customer due diligence, record-keeping, transaction monitoring and suspicious transaction reporting.
- Licences are granted for a fixed period and must be renewed; changes must be notified.
Ongoing obligations
- Customer due diligence, including identification and verification, and enhanced measures for higher-risk customers.
- Record retention for the period required by the AMLO.
- Screening against sanctions lists.
- Reporting suspicious transactions to the Joint Financial Intelligence Unit, without tipping off.
- Cooperating with inspections.
Questions we are often asked
Do I need an MSO licence to receive payments for my own business?
No. The licence is for providing money changing or remittance services to others as a business. Receiving payments for your own goods or services does not require it.
Is a cryptocurrency exchange an MSO?
Virtual asset trading platforms fall under the SFC's separate licensing regime, and some virtual asset activities are subject to other regimes. Take legal advice.
How long does licensing take?
It depends on the completeness of the application, the fit and proper assessment and premises checks. Allow for several months and plan your launch accordingly.
Self-check: where do you stand?
| Question | What to do |
|---|---|
| Does your business exchange currency or transfer money for others? | If so, check the MSO licence requirement |
| Are your owners and directors fit and proper? | Prepare for the assessment |
| Do you have AML/CTF policies and systems? | If not, implement them before applying |
| Have you considered SVF or virtual asset regimes? | Take legal advice on the right regime |
- Corporate set-up and administration for licensed businesses.
- AML/CTF policies, risk assessments and training.
- Coordinating with specialist licensing lawyers.
In summary
- MSO licence from Customs and Excise for money changing and remittance.
- Other payment activities fall under other regimes.
- Strict AML/CTF obligations apply.
Official references
- Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615), Part 5
- Customs and Excise Department: Money Service Supervision, www.customs.gov.hk