Any business located in Canada which engages in foreign exchange, money transfer, virtual currency, and crowdfunding activities as its primary business or as a significant part of its operations, must register with FINTRAC and obtain the MSB license. This regulation aims to ensure that businesses in the financial sector adhere to anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. 

Obtaining the MSB License is vital as it ensures regulatory compliance, establishes business credibility, grants access to legitimate markets, and offers a competitive advantage.

You are a money services business (MSB) if all of the following criteria apply:  

• You offer at least one money services business (MSB) service.
• You have a place of business in Canada.
• You have a place of business in Canada. 
• You offer one or more of the following services:
  • Foreign exchange dealing;
  • Remitting or transmitting funds;
  • Issuing or redeeming money orders, traveller's cheques or anything similar;
  • Dealing in virtual currency. 

You are also considered an MSB if:

• You hold a permit or licence related to any of the above-mentioned services.
• You are registered as someone offering any of the above-mentioned services.
• You advertise (by any means, including newspaper, television, Yellow Pages, internet, any other media, or by an interior or exterior sign) that you engage in any of the above-mentioned services.
• You do not advertise any MSB services, but you:
• offer money transfer services in any amount;
• conduct foreign exchange transactions for more than $1,000 during a single transaction with the same person or entity. For these purposes, a single transaction is defined as two or more transactions related to a foreign exchange transaction of less than $1,000 each that are made within 24 consecutive hours and that total $1,000 or more; or
• issue or redeem money orders, traveller's cheques or other similar negotiable instruments for more than $1,000 during a single transaction with the same person or entity. For these purposes, a single transaction is defined as two or more transactions related to the redemption of money orders, travellers' cheques or other similar negotiable instruments of less than $1,000 each that are made within 24 consecutive hours and that total $1,000 or more.
• You report the income of any of the above-mentioned services as income from a separate business for tax purposes.

Obtaining the MSB License is vital as it ensures regulatory compliance, establishes business credibility, grants access to legitimate markets, and offers a competitive advantage. The MSB license encompasses not just cash and electronic money transactions but also virtual currency transactions. It can be viewed as a viable substitute for European payment service provider licenses.

As Canada's financial intelligence unit, FINTRAC's mandate is to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control. Money services businesses must register with the FINTRAC.

Yes, the registration has an expiration date. The MSB must be renewed every two years as a mandatory requirement.

There is no specific minimum capital requirement but it is highly recommended to deposit and allocate a certain amount of the capital.

it is mandatory to appoint at least one director who is an individual with a financial background. Additionally, a qualified compliance officer must be appointed, and a robust Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) program and compliance system should be established before the company begins its operational activities. It is not required for the directors and AML responsible individuals to be local residents if the company is registered in Ontario or British Columbia.

Yes, the company must have presence in Canada. 

Sure, the MSB company can be owned by both private and legal persons. 

The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax abatement.

After the general tax reduction, the net tax rate is 15%.

For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 9%.