MSB (Money Service Business) from Canada

MSB

An MSB is a business organization that is not part of the banking system but can perform certain types of financial transactions within Canada including, but not limited to:

  • Money transfer services
  • Digital currency trading
  • Payment systems
  • Financial agents
  • Currency dealers
  • Issuance and sale of remittances

With this license, companies are allowed to conduct transactions in Canadian dollars or foreign currency, both within Canada and in other countries. In addition, MSB companies can work with individuals and legal entities, including international companies, which opens up opportunities for expanding business and increasing the customer base.


*MSBs in Canada are supervised under the Anti-Money Laundering and Counter-Terrorist Financing Act and regulated by the Financial Transactions and Reports Analysis and Analysis Centre (FINTRAC).

MSB Requirements

  • Must open a physical office in Canada.
  • Must be registered within FINTRAC.
  • Must comply and adhere to AML/CTF policies, risk control, and monitoring rules, and must have a compliance officer responsible for developing and complying with AML/CTF.
  • Must comply with client identification, record keeping, and reporting rules.
  • All founders, shareholders, and employees must be in good standing. Companies need to provide the regulator with certificates of non criminal record in his/her country of citizenship.
  • Must monitor suspicious transactions and report information to the appropriate government agencies.
  • At least one director with economic experience must be appointed to the company.

Canadian Payment Service Providers: RPAA Registration Requirements


Most Canadian companies offering payment services are required to register under the Retail Payments Activities Act (RPAA), with a few exceptions. Common business models that typically require registration include:


Payment Service Providers

Account Providers (e.g., holding client funds)

Remittance Companies

Multi-Currency Account Providers

Payment Gateway Providers

Merchant Account Providers

If your business model falls into any of these categories, compliance with the RPAA is mandatory.


MSBs Exempt from Bank of Canada Registration

Certain Money Services Business (MSB) models do not generally require registration with the Bank of Canada, including:


ATM Businesses, including crypto ATMs

Brick-and-Mortar Currency Exchange Services

Non-Custodial Crypto Exchanges

Custodial Crypto Exchanges (these must register with securities regulators instead)



**Understanding these requirements is essential for ensuring your business operates in full compliance with Canadian regulations.**

Our MSB Package:

Ready-Made Company

Approved MSB activities:

Foreign exchange dealing

Money transferring

Dealing in virtual currencies

No previous activity
No required share capital


Mandatory Monthly Fees:
Local director 2.5k / month
MLRO no need to be local (you are able to use your own or current in house MRLO)

Local office is required, current office can be kept on clients request

Time Frame: 2 Weeks

39.000 EUR

PDF

Crypto Regulation in Canada:

  • State fee for application - None
  • Required share capital - No minimum
  • Corporate income tax - 2-12%
  • Annual supervision fee - None
  • Local staff member - Not required, but recommended
  • Physical office - Required
  • Accounting audit - Not required
  • Bank account options - European EMIs and we can easily open CAD account

Tax laws in Canada:

Cryptocurrency has the status of an asset. Therefore virtual currency transactions are subject to the Income Tax Act (ITA).

The rate depends on the annual income: from 15% to 33%.

Cryptocurrency entrepreneurs must consider the tax rates of the province where their company will operate and convert the value of cryptocurrency to CAD for tax purposes to confirm the transaction to the IRS. The province that we recommend is British Columbia.

  • Companies registered in British Columbia pay tax only on income generated within British Columbia, and the rate for income received outside of Canada is 0%.
  • Corporate income tax is 12% for income over 300,000 CAD, which is one of the lowest rates in all of North America.
  • There is an additional tax credit that allows reducing of the tax rate to 2% for income up to 300,000 CAD
  • All companies in Canada are also obligated to remit a federal tax of 15%


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