MSB Licensing in Canada

A Money Services Business (MSB) in Canada provides regulated financial services such as money transfers, foreign exchange, payment processing, and related activities. These services operate within Canada’s regulated financial framework and are subject to anti-money-laundering and counter-terrorist financing requirements.

MSB registration is required when a business falls within FINTRAC’s regulatory scope. This generally applies if a business:

- Operates in Canada and provides MSB services to Canadian clients, or
- Is based outside Canada but offers MSB services to persons or entities in Canada (Foreign MSB).
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In both cases, registration with FINTRAC is mandatory and must be completed before any MSB services are offered or transactions are processed.

FINTRAC is Canada’s financial intelligence unit and the authority responsible for supervising Money Services Businesses for anti-money-laundering and counter-terrorist financing purposes under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

For MSBs, FINTRAC’s role focuses on maintaining the MSB registration registry, overseeing compliance with AML and reporting requirements, and reviewing whether businesses operate within their declared scope. 

It is important to note that FINTRAC registration is not a commercial licence or an approval of a business model. Registration confirms that a business is subject to regulatory oversight and ongoing compliance obligations.

Registration with FINTRAC

‍All MSBs are required to register with FINTRAC and obtain a valid MSB registration number before commencing any regulated activities. Registration must be kept current and renewed every two years to remain compliant.

‍Anti-Money Laundering (AML) and Know-Your-Customer (KYC)

‍A risk-based AML and KYC framework is required and should reflect the nature and scale of the business. This includes:

- Customer identification procedures
- Ongoing transaction monitoring
- Reporting suspicious transactions
- Record keeping for large cash and virtual currency transactions

‍Record-Keeping and Regulatory Reporting

‍Accurate record-keeping and timely submission of mandatory reports to FINTRAC are required in accordance with regulatory thresholds and timelines. These obligations apply to both cash and virtual currency activities and form a core element of ongoing supervisory oversight.

Step 1. Establishing a Canadian Business Presence

‍Before MSB registration, the business must be incorporated in Canada and have a basic operational structure in place. This establishes the legal and organisational foundation required for regulatory registration.

This stage typically involves selecting a jurisdiction, registering a compliant company name, maintaining a Canadian registered address, allocating share capital, and appointing at least one director with a relevant professional background.

‍Step 2. Defining the Business Model for FINTRAC

‍As part of the registration process, FINTRAC may request preliminary information to understand the business model and the scope of planned activities.

This information generally includes the company’s legal details, contact information, and a high-level description of the services offered and expected transaction flows. The purpose of this stage is to confirm whether the activities fall within MSB or Foreign MSB regulation.

‍Step 3. Completing MSB Registration

‍Formal MSB registration requires disclosure of key information about the business, including ownership and management structure, banking arrangements, compliance roles, and expected transaction volumes.

Once registration is completed, the business is listed in FINTRAC’s public MSB registry and becomes subject to ongoing compliance, reporting, and supervisory oversight.

MSB registration with FINTRAC is not a one-time requirement. After registration, businesses must maintain their compliance framework, keep registration information up to date, and continue meeting reporting and record-keeping obligations.

As the business evolves, changes in ownership, transaction volumes, service scope, or geographic reach may require updates to compliance controls and registration details. AML and KYC procedures should remain aligned with actual operations, not only with the initial business description.

FINTRAC may request clarification or additional information over time, making ongoing compliance a regular operational responsibility rather than an occasional administrative step.

Our team provides professional services supporting MSB registration and ongoing compliance in Canada. This includes regulatory assessment, FINTRAC registration support, and post-registration compliance alignment. These services are designed to help businesses apply the regulatory principles outlined above in practice as their operations develop.

‍View MSB Registration & Compliance Services