Canada is a reputable jurisdiction with a highly developed economy and a favorable environment for doing business. Thanks to its well-developed banking infrastructure and flexible sector-specific regulation, Canada is particularly well suited for establishing a payment business, which can operate under a Money Services Business (MSB) registration. We invite you to take a closer look at the opportunities offered by the Canadian MSB framework and the process of obtaining registration.
An MSB is a non-bank financial institution authorized to provide a range of payment and financial services. Within the scope of its activities, an MSB may provide the following services:
MSBs are registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The regulatory framework provides for two categories — MSB and FMSB (Foreign Money Services Business). Both categories cover broadly similar activities; the main distinction is that MSB registration applies to businesses operating in Canada, while FMSB registration applies to foreign businesses providing relevant services to clients in Canada.
The basic requirements for applicants include:
The requirements applicable to applicants differ depending on whether the business is registered as an MSB or an FMSB. For an MSB operating in Canada, the applicant may be required to demonstrate an appropriate local presence, including local management and operational arrangements. By contrast, an FMSB may operate without establishing a full local corporate structure in Canada, subject to compliance with the applicable regulatory requirements.
To obtain MSB/FMSB registration, the applicant must submit the required information and documentation to FINTRAC, including:
The registration process generally takes several months, depending on the applicant's structure, activities, and the completeness of the information provided. Once the registration process has been successfully completed, FINTRAC enters the applicant in the MSB/FMSB registry and assigns it a registration number. The company may then provide the relevant services subject to the scope of its activities and applicable Canadian regulatory requirements.
The Canadian MSB framework offers a number of advantages, including:
To summarize, the Canadian MSB framework is a versatile solution for businesses seeking to provide international payment and financial services. MSB or FMSB registration can provide an effective entry point for a new payment business or complement the regulatory structure of an existing business.
If you are considering MSB or FMSB registration in Canada and have questions about the process, please contact the specialists at Solex Group — we will be glad to assist you throughout the registration process.
Keywords: payment system, payment services, Canada, MSB, FMSB, MSB registration, FINTRAC, EMI, PSP.
An MSB is a non-bank financial institution authorized to provide a range of payment and financial services. Within the scope of its activities, an MSB may provide the following services:
- foreign exchange services;
- B2B/B2C money transfers;
- virtual currency services (exchange and transfer of cryptocurrencies);
- holding of funds (e-wallet services);
- merchant acquiring services (processing of bank card payments);
- operation of crowdfunding platforms.
MSBs are registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The regulatory framework provides for two categories — MSB and FMSB (Foreign Money Services Business). Both categories cover broadly similar activities; the main distinction is that MSB registration applies to businesses operating in Canada, while FMSB registration applies to foreign businesses providing relevant services to clients in Canada.
The basic requirements for applicants include:
- the company's business activities must include the provision of financial or payment services;
- the company must establish an AML compliance program and appoint a compliance officer responsible for AML matters;
- there is no minimum share capital requirement;
- the company's beneficial owners must satisfy applicable suitability and integrity requirements.
The requirements applicable to applicants differ depending on whether the business is registered as an MSB or an FMSB. For an MSB operating in Canada, the applicant may be required to demonstrate an appropriate local presence, including local management and operational arrangements. By contrast, an FMSB may operate without establishing a full local corporate structure in Canada, subject to compliance with the applicable regulatory requirements.
To obtain MSB/FMSB registration, the applicant must submit the required information and documentation to FINTRAC, including:
- the company's corporate information and supporting documents;
- information on the company's structure, including details of its directors and management, compliance officer, and employees;
- identification information relating to the beneficial owners;
- information on the company's business activities and operating model;
- the company's banking details, where applicable;
- the registration application and other information required by FINTRAC.
The registration process generally takes several months, depending on the applicant's structure, activities, and the completeness of the information provided. Once the registration process has been successfully completed, FINTRAC enters the applicant in the MSB/FMSB registry and assigns it a registration number. The company may then provide the relevant services subject to the scope of its activities and applicable Canadian regulatory requirements.
The Canadian MSB framework offers a number of advantages, including:
- A relatively straightforward registration process.
- No minimum share capital requirement.
- A comparatively short registration timeframe.
- The ability of foreign businesses to register without establishing a full local corporate presence in Canada.
- A broad range of financial services that may be provided within the applicable regulatory framework.
To summarize, the Canadian MSB framework is a versatile solution for businesses seeking to provide international payment and financial services. MSB or FMSB registration can provide an effective entry point for a new payment business or complement the regulatory structure of an existing business.
If you are considering MSB or FMSB registration in Canada and have questions about the process, please contact the specialists at Solex Group — we will be glad to assist you throughout the registration process.
Keywords: payment system, payment services, Canada, MSB, FMSB, MSB registration, FINTRAC, EMI, PSP.