Financial Transactions and Report Analysis Centre of Canada (FINTRAC) – MSB
What is FINTRAC and what does it do?
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) acts as an independent government agency and Canada’s financial intelligence unit. FINTRAC is responsible for the detection, prevention and deterrence of money laundering and terrorist financing activities since 2000. FINTRAC’s purpose is to ensure the protection of personal information that falls under its supervision.
Why register a Money Service Business (MSB) in Canada?
A registered MSB situated in Canada benefits from:
- A taxation system that operates on a self-assessment basis and is fortified by multiple income tax treaties.
- Robust bilateral relations with the United States of America, offering the advantage to investors to align with the US economic policies.
- The opportunity to provide services in both fiat and crypto assets and onboard clients from other countries, without actively advertising their services in those countries.
- A short period of time between the registration and the actual launch of operations.
- Heightened awareness of security, privacy, information management and access to information.
Which are the Money Service Business?
| Type of Service | Included Services |
|---|---|
| Dealing in virtual currencies | • Funds for virtual currency exchange • Virtual currency for funds • Virtual currency for another virtual currency • Transferring virtual currency at client’s request • Receiving a virtual currency transfer for remittance to a beneficiary |
| Foreign exchange dealing | • Conducting transactions where you exchange one type of currency for another. |
| Crowdfunding Platform Services | • Providing and maintaining a crowdfunding platform to be used by other persons or entities to raise funds or virtual currency. |
| Remitting or Transmitting Funds | • By any means or through any person, entity or electronic funds transfer network or any other method, including: - remitting or transmitting funds carried out by means of a credit/debit card where the beneficiary has an agreement with the payment service provider that permits payment by that means for the provision of goods and services. |
| Issuance or Redemption of Traveler’s Cheques (CT’s)/Money Orders (MO’s) | • Issuing or redeeming money orders, traveler’s cheques or other similar negotiable instruments except: - cheques payable to a named person or entity. |
Money Service Business and Foreign Money Service Business
A person or entity is required to register as an MSB under FINTRAC, in case it intends to offer one or a combination of MSB services to the public and has a place of business in Canada. Having a place of business in Canada means that the person, legal or physical is incorporated or has a physical location or has employees, agents or branches in Canada.
On the other hand, a person is required to register as a Foreign MSB (FMSB) under FINTRAC, in case it intends to offer one or more MSB services in Canada and does not have a place of business in the jurisdiction.
Main Registration Requirements
To be registered as an MSB, specific obligations are required to be fulfilled as per the Proceeds of Crime Money Laundering and Terrorism Financing Act (PCMLTFA). The main registration requirements concern the following:
- Beneficiaries – information about the beneficiaries of the business shall be disclosed to FINTRAC including their citizenship, non-criminal certificates and source of wealth.
- Personnel – a compliance officer is required to be appointed at the registration stage, preferably with experience in the financial sector.
- Company Name – the name of the company shall be comprised of at least two words, one of which must describe the company’s main business.
- Office – the applicant is not required to maintain a physical office, at the registration stage, rather than a legal address.
- Initial Capital – no minimum initial capital requirement is applicable. Nonetheless, the amount of authorised capital that the applicant chooses to pay, shows to FINTRAC the intention for business planning and development.
- AML/CFT procedures – such as customer identification and record keeping, including Know Your Customer (KYC) and Customer Due Diligence (CDD).
Registration Fees
There are no fees associated with the registration process with FINTRAC.
Registration Timeframe
The completion of the entire application procedure is estimated to be between 1 to 2 months, from the applicant’s pre-registration form until the initiation of operations. This depends on the complexity of the proposed business model and activities, and the applicant’s readiness to fulfill the FINTRAC requirements.
Obtaining an MSB registration with SALVUS
The SALVUS Payment Services Licensing team consists of industry-leading professionals able to support you in every step of your MSB registration with FINTRAC. Our team applies a high standard project management approach, starting from designing an effective portfolio of money services that suit your business plan, objectives, and vision. We work closely with our clients and their teams, to ensure the preparation of a complete and well-supported registration package, leading your interaction with the regulator.
We further assist you in the recruitment process and help you satisfy all regulatory requirements for the successful launch of operations. Leveraging on our profound understanding of Canada’s financial regulations and substantial experience in the field we constitute a prominent choice for companies seeking to achieve regulatory compliance.
Please contact us at info@salvusfunds.com if you are interested in registering an MSB or an FSMB in Canada.