Hong Kong TCSP Licensing

Entrepreneurs entering the Trust and Company Services market in Hong Kong must get a Trust and Company Service Provider (TCSP) license to operate legally. Furthermore, it’s critical to remember that the process may be complicated because of the established regulations.

This essay is intended to support you in this critical undertaking by offering a comprehensive road map on the legal environment and the procedures involved in acquiring a TCSP license. Now, read more!

 

What is a TCSP license for Hong Kong?

An official authority is a license from the Companies Registry to operate as a Hong Kong Trust Company Service Provider (TCSP). The holder of this license can offer trust and corporate services and conduct associated business activities, such as company registration and the provision of registered office space, within the jurisdiction.

As per the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), which the Hong Kong government implemented on March 1, 2018, possessing a TCSP license is a mandatory regulation, put simply, businesses in this industry must hold this license to legally conduct business in Hong Kong.

Getting a TCSP license is not just a legal necessity; it also shows that the company has complied with the government’s stringent regulations. These requirements usually include a commitment to honoring AML and CTF commitments, as well as financial soundness, corporate integrity, and legal expertise.

Your business must renew the TCSP license at least 60 days before being able to continue conducting lawful business in Hong Kong, as the license is typically only valid for three years from the date of issuance.

 

Which businesses in Hong Kong are required to have a TCSP license?

In Hong Kong, for example, the TCSP license covers a wide range of businesses engaged in trust and company service operations inside the jurisdiction.

 

Examples of relevant companies

The following are some typical business categories that are subject to Hong Kong’s TCSP licensing requirements:

• Hong Kong trust companies, for example, offer fiduciary and trust services, including asset protection, estate planning, and trust administration, to individuals, families, and businesses.
• Nominee shareholder services include designating a representative to hold shares on the owner’s behalf and giving the beneficial owner privacy and confidentiality.
• They are supplying directors to businesses that provide nominee director services so they can represent the beneficial owner or carry out particular duties inside the company.

To put it plainly, the scope includes any organization (such as businesses, partnerships, or private persons) that:

• Offers services either directly or indirectly as a TCSP
• Publicize or advertise their commercial endeavors or get recommendations from other businesses;
• Intend to make money off of their endeavors and
• They carry out their tasks in a logical or discernible manner.

This indicates that TCSP licensing laws apply to domestic and foreign businesses operating in Hong Kong and within the sector.

 

TCSP license regulation exemptions

In Hong Kong, exceptions to the requirement that relevant firms get a TCSP license are usually few and strictly confined. However, specific organizations or people might not be required to obtain a permit under certain conditions.

• Offices authorized by the Anti-Money Laundering and Counter-Terrorism Financing Ordinance (AMLO) constitute government agencies.
• Establishments lawfully authorized by the Hong Kong Monetary Authority (HKMA) as defined by section 2(1) of the Banking Ordinance, Cap. 155, including banks, restricted license banks, and deposit-taking businesses.
• Licensed corporations hold a Securities and Futures Commission (SFC) license to engage in regulated activities. This includes Hong Kong TCSPs that offer services that complement their main line of business.
• Accounting and law professionals include solicitors, certified public accountants (CPAs), CPA companies, and corporate entities that are compliant with the Accounting and Financial Reporting Council Ordinance.
• Persons specified by regulation: Members of a class designated by the Treasury and the Secretary for Financial Services through specific regulations.

Please be aware that speaking with legal experts is essential to remaining compliant with the constantly evolving legal landscape, regardless of your exemption status.

 

Penalties for unlicensed TCSPs

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance makes it a severe offence to conduct trust or corporate service business activities in Hong Kong without a license.

If someone or anything is discovered engaging in these activities without the necessary TCSP license, they may be judged guilty and subject to harsh punishments. Among these sanctions are:

• Fines: The maximum fine for offenders is HK$100,000 per infraction.
• Imprisonment: Apart from monetary penalties, defendants may face a six-month prison sentence.

The penalties meted out to offenders underscore the necessity of getting the proper TCSP license before engaging in service activities. Compliance is not only necessary in Hong Kong’s highly regulated financial sector but also to uphold businesses’ integrity and reputation.

 

How to apply for a TCSP license for your company in Hong Kong

The Hong Kong Trust Company Service Provider license application process is outlined below.

Step 1: you need to fill out a few necessary application forms. The first set, which costs HK$3,440, consists of:

• Form TCSP1, Application for Trust or Company Service Provider Licensure
• Form TCSP1-SIS: Supplementary Information Sheet about the Purpose of the Business
• Form TCSP1-SIS2A, Supplementary Information Sheet 2A, regarding the target client category and employee count

 

Step 2: Draft an Appropriate and Fit Criteria Statement

In addition to the forms, candidates must send in a Fit and Proper Criteria Statement for every pertinent individual or company. The fit and appropriate criteria are essential standards used to evaluate the suitability, financial soundness, competence, and integrity of people and organizations applying for TCSP licenses.

Based on the type of entity, statements are separated into two categories:

• Individuals (such as applicants, partners, directors, and ultimate owners) should fill out Form TCSP4.
• For companies, use Form TCSP5.

There will be an extra charge of HK$975 for each form. Please be aware that if an entity is exempt from obtaining a TCSP license, this kind of statement is unnecessary.

 

Step 3: Gather any more necessary paperwork.

It’s time to get additional paperwork ready for the licensing process after completing the form sets. Generally speaking, these documents cover:

• A certified copy of the Business Registration Certificate Details the composition of the corporation group and each member’s shareholding percentage.
• Information on the leading players in the company’s management and operations, including compliance officers and money laundering reporting officers
• Individuals who are not required to submit Form TCSP4/TCSP5 with accompanying documentation
• A copy of the Board of Directors’ letter of authorization permitting the director to submit an application

It’s crucial to speak with a reputable Hong Kong firm for situation-specific guidance to ensure that everything is prepared for submission.

 

Step 4: Send the CR the TCSP application

Now is the time to send the application to the Registrar of Companies, together with the supporting documents, the Fit and Proper Criteria Statement, and the form sets.

Additionally, you have the option of sending the file in hardcopy or softcopy:

Online entry

• Just register for an account on the Companies Registry website
• Utilize the Online Services’ Apply for a Trust or Company Service Provider License feature
• Upload all of your supporting documentation and filled-out application forms.
• Use one of the various online payment options to pay the application cost.

Here is a sample video from the CR that will help you through the procedure.

 

By mail or in person

You can send the completed application forms in hard copy and the necessary costs to The Registry for Trust and Company Service Providers.

Their address is One Kowloon, 1 Wang Yuen Street, Unit 1208, 12th Floor, Kowloon Bay, Kowloon, Hong Kong. Additionally, they only receive hardcopy documents on weekdays between 8:30 and 5:30.

The Registrar of Companies will review your application after it has been submitted. Be prepared for any pertinent questions that may come up during this process, which could involve a thorough review of your documents and interviews with necessary staff.

 

Step 5: Obtain your TCSP license

Your address will receive your TCSP license after your application has been approved. Specifically, an electronic version will be granted within 2.5 months.

To download your document from the Registry for Trust and Company Service Providers website, you will receive an email notification.

Now that you have your license, your business can legally and confidently provide various trust-related services throughout Hong Kong!

 

To conclude

In conclusion, anyone or any organization offering trust and company services in Hong Kong must get a Trust or Company Service Provider (TCSP) license. Thanks to our advice in this post, you now have a clear road map to successfully traverse the application procedure.

Essentially, please contact our team as soon as possible for assistance if you intend to open a company in Hong Kong or if you have any questions about doing so. We offer complete services for post-corporate creation, Hong Kong incorporation, and yearly legal compliance.

Please contact us immediately at GERAI LTD with any questions