Canada regulates money services businesses (MSBs) through registration with FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada. A Canadian MSB registration is a popular route for payment, foreign exchange and crypto-asset businesses, but it is often misunderstood: it is a registration with an anti-money-laundering authority, not a banking or e-money licence, and it comes with a compliance programme that must actually run. This guide explains who must register, what the registration involves, what it costs, how long it lasts, what must be reported afterwards and where projects usually go wrong. Our prices are on the Canada MSB page.
The facts below come from FINTRAC's own guidance on fintrac-canafe.canada.ca, linked in each section. The guide is general information, not legal advice; it is not Canadian legal advice either.
Who is a money services business
FINTRAC treats you as a money services business if you offer at least one MSB service and you have a place of business in Canada (FINTRAC — money services businesses). The services include:
- foreign exchange dealing;
- remitting or transmitting funds by any means;
- issuing or redeeming money orders, traveller's cheques or similar negotiable instruments;
- dealing in virtual currencies;
- crowdfunding platform services;
- transporting currency and negotiable instruments (armoured cars);
- cheque cashing; and
- acquirer services for private automated banking machines.
You have a place of business in Canada if you are incorporated in Canada, have a physical location in Canada, or have employees, agents or branches there. A business that has no place of business in Canada but directs these services at persons in Canada is a foreign money services business and has its own registration obligations.
Registration before you start
MSBs operating in Canada must register with FINTRAC before they begin to operate, and a registration or licence with a province or territory does not replace the FINTRAC registration (FINTRAC — register your money services business). FINTRAC only accepts complete applications: incomplete ones are closed and must be resubmitted. Some persons and entities are not eligible to register at all — FINTRAC publishes the grounds on its page "Who is not eligible to register as a money services business or act as an agent or mandatary", and an ineligible applicant cannot operate an MSB.
FINTRAC does not charge registration fees. The cost of an MSB project is the corporate work, the compliance programme and the people who run it — not a state fee.
How long a registration lasts
A FINTRAC registration is valid for two years and must be renewed before its expiry date (FINTRAC — update, renew or cancel your registration). Failure to renew may result in administrative monetary penalties, criminal charges or other consequences.
What must be reported afterwards
Changes to the registration information must be reported to FINTRAC within 30 days — for example a change of address of the contact person or of the representative for service in Canada. If FINTRAC sends a clarification request, you have 30 days to respond. If the business stops offering MSB services, it must cancel its registration within 30 days (same FINTRAC page). A registration that is out of date is itself a compliance breach.
The compliance programme
Registration is the beginning, not the end. As a reporting entity under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act, an MSB must have a compliance programme consisting of (FINTRAC — compliance program requirements):
- a compliance officer responsible for implementing the programme;
- written, up-to-date policies and procedures;
- a risk assessment of the business's money laundering, terrorist financing and sanctions evasion risks;
- a written, ongoing training programme and plan for employees, agents and others acting on its behalf; and
- a two-year effectiveness review — a documented review of the policies and procedures, risk assessment and training, carried out every two years at a minimum by an internal or external auditor.
On top of the programme come the day-to-day obligations: verifying the identity of clients, keeping records, and reporting transactions to FINTRAC as its guidance requires. The FINTRAC compliance programme, the designated compliance officer and the risk assessment with the two-year effectiveness review are separate add-ons on our Canada MSB page.
What an MSB registration is not
- It is not a bank or e-money licence. It does not allow deposit-taking or the issuing of electronic money in the European Union.
- It is not an EU passport. An MSB registration gives no rights to serve clients in the EU; crypto-asset services there need a MiCA authorisation, and payment services a payment institution or e-money authorisation. See our MiCA CASP guide.
- It is not a bank account. Banks and payment institutions decide independently whether to open an account for an MSB. Our guide to a bank account for a licensed company explains how to prepare for that.
- It is not transferable. The registration belongs to the registrant. Buying an already registered corporation is possible, but the registration stays with that corporation and the changes must be reported — see buying a ready-made Canada MSB.
How we work
- Scoping. You describe the services, clients and countries. We check whether the business is an MSB or a foreign MSB and which services must be registered, and flag provincial requirements that may apply.
- Quote. We send a written quote by email before any work starts.
- Incorporation. We incorporate the Canadian corporation.
- Compliance programme. We prepare the policies and procedures, the risk assessment and the training plan, and support the appointment of the compliance officer.
- Registration. We prepare and file the complete FINTRAC registration and handle clarification requests.
Our fee is our professional fee for the work described. We do not guarantee that FINTRAC will accept or keep a registration and cannot promise timing. Bank and payment accounts are not included and are granted solely at the discretion of the financial institution.
Foreign money services businesses
A business without a place of business in Canada that directs MSB services at persons or entities in Canada and provides those services to its clients in Canada is a foreign money services business (FMSB). FMSBs must register with FINTRAC too, must appoint a representative for service in Canada, and must inform FINTRAC of any change to that representative's name or address within 30 days (FINTRAC). Many non-Canadian businesses that believe they need "a Canadian licence" are in fact FMSBs; others need a Canadian corporation because their bank or partner asks for one. We clarify which route fits in the quote.
Provincial requirements
FINTRAC registration is federal. FINTRAC itself notes that businesses may also be registered or licensed with a province or territory, and that such a provincial status does not replace the FINTRAC registration. Whether a provincial regime applies depends on where the business operates and what it does; we identify it before the incorporation, because it can change where the corporation should be based.
Records and reporting in daily operation
Once operating, the MSB keeps records of the transactions and client identification required by FINTRAC's guidance, and reports to FINTRAC the transactions its guidance requires, such as suspicious transactions. These duties are the day-to-day side of the compliance programme, and the two-year effectiveness review tests whether they work. A registration without working records and reporting will not survive a FINTRAC examination.
Common mistakes
- Registering before the compliance programme exists. The programme must be in place when the business starts operating, not months later.
- Declaring the wrong services. A business that deals in virtual currencies but registers only foreign exchange dealing has an incorrect registration.
- Forgetting the calendar. The 30-day reporting period for changes, the two-year renewal and the two-year effectiveness review all run in parallel.
- A compliance officer in name only. The compliance officer must actually implement the programme and have the authority and resources to do so.
- Treating the registration as market access. It gives no rights outside Canada and no access to banks.
Frequently asked questions
Does FINTRAC charge a fee for MSB registration?
No. FINTRAC states that it does not charge registration fees.
How long is a FINTRAC MSB registration valid?
Two years. It must be renewed before its expiry date.
How quickly must changes be reported?
Within 30 days. The same period applies to answering a FINTRAC clarification request and to cancelling a registration after the business stops offering MSB services.
Does a provincial licence replace FINTRAC registration?
No. FINTRAC states that an MSB registered or licensed with a province or territory must still register with FINTRAC.
Can a Canadian MSB serve clients in the EU?
A FINTRAC registration gives no rights in the EU. Crypto-asset services in the EU need a MiCA authorisation, and payment or e-money services an EU authorisation.