Registering a Money Services Business under FINTRAC in Canada in 2025

1. Why register a Money Services Business under FINTRAC?

Canada has emerged as one of the most dynamic fintech ecosystems globally, hosting numerous innovation hubs that provide cutting-edge solutions in payments and money services. The country’s business-friendly regulatory environment, self-assessment-based taxation system, and extensive bilateral agreements—particularly with the United States and the European Union—offer strategic advantages for financial services businesses.

Key benefits of registering an MSB under FINTRAC include:

• No registration fees and a relatively quick approval process for launching operations.
• No minimum capital requirements or physical office requirements at the registration stage.
• The ability to provide services in both fiat and crypto assets, with the flexibility to onboard international clients (without actively marketing to them in their jurisdictions).

However, operating an unregistered MSB in Canada constitutes a serious regulatory offence under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), now subject to increased penalties under recent regulatory changes.

2. Which are the MSB services?

A Money Services Business license is required for individuals or entities with a place of business in Canada that provide any of the following services:

• Foreign exchange dealing – Exchanging one currency for another.
• Remitting or transmitting funds – Sending funds via any method, including electronic transfers and credit/debit card transactions where the recipient has an agreement with the service provider.
• Issuing or redeeming money orders, traveller’s cheques, or similar negotiable instruments (except cheques payable to a named person or entity).
• Dealing in virtual currencies, including:
  • Virtual currency exchange services.
  • Virtual currency transfer services (sending or receiving crypto on behalf of a client).
• Crowdfunding platform services – Providing and maintaining a platform for individuals or businesses to raise funds in fiat or virtual currencies.

A business model that resembles what the Bank of Canada (BoC) would qualify as Payment Service Provider (PSP) would also require a subsequent registration with the BoC under their RPAA (Retail Payment Activities Act).

If you are interested in registering an MSB or FMSB under FINTRAC in Canada, reach out to our Payment Services Licensing team at info@salvusfunds.com. We are ready to assist you in achieving regulatory compliance.

3. MSB vs. FMSB

The distinction between an MSB (Money Services Business) and an FMSB (Foreign Money Services Business) under FINTRAC depends on the company’s physical presence in Canada:

• An entity must register as an MSB if it offers money services to the public and has a place of business in Canada. This includes businesses that:
  • Are incorporated in Canada.
  • Have a physical office in Canada.
  • Employ agents or maintain branches in Canada.
• Conversely, an entity must register as an FMSB if it offers MSB services to Canadian clients but does not have a business presence in Canada.

4. What are the main registration requirements?

To register as an MSB, businesses must meet specific obligations under the PCMLTFA, which include the following:

• Beneficiary disclosures – Information on company beneficiaries, including their citizenship, criminal records (if any), and source of wealth.
• Appointment of a Compliance Officer – A qualified individual responsible for overseeing regulatory compliance, preferably with financial sector experience.
• Company name requirements – The company name must include at least two words, one of which should reflect the business activity.
• Physical office requirements – A physical office is not required at the registration stage, but a legal address is necessary.
• Initial capital – There is no minimum capital requirement, but an applicant’s declared authorized capital signals financial preparedness to FINTRAC.
• AML/CFT procedures – Businesses must establish rigorous Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) policies, including enhanced Know Your Customer (KYC) and Customer Due Diligence (CDD) processes.
• Expanded Due Diligence Obligations – Recent regulatory updates have broadened the list of sanctioned entities and individuals, requiring MSBs to implement stricter client screening measures.

5. How SALVUS can support your MSB registration

The SALVUS Payment Services Licensing team comprises experienced professionals who can guide you through every step of the MSB registration process with FINTRAC. Given the multi-faceted nature of the registration, our team employs a strategic project management approach, ensuring:

• A well-designed money services portfolio aligned with your business goals.
• The preparation of a comprehensive and compliant application package.
• Regulatory engagement on your behalf, facilitating interactions with FINTRAC.
• Recruitment support to help onboard key personnel, including compliance officers.
• Ensuring compliance with newly introduced regulatory obligations, such as the enhanced information-sharing provisions and expanded compliance expectations.

Leveraging our deep expertise in Canadian financial regulations, we provide end-to-end regulatory support, making us a trusted partner for businesses seeking FINTRAC registration.

If you are interested in registering an MSB or FMSB under FINTRAC in Canada, reach out to our Payment Services Licensing team at info@salvusfunds.com . We are ready to assist you in achieving regulatory compliance.

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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.