Do I need a TCSP licence in Hong Kong

Do I Need a TCSP Licence

Carrying on a trust or company service business in Hong Kong requires a TCSP licence from the Registrar of Companies under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). Operating without a licence is an offence unless you fall within one of the statutory exemptions.

Hong Kong TCSP Licence Requirement

The TCSP licence requirement applies to anyone who, by way of business, provides any of the following services in Hong Kong:

• Forming a company
• Acting or arranging for another person to act as a director or company secretary of a company
• Providing a registered office or correspondence address for a company
• Acting or arranging for another person to act as a trustee of an express trust
• Acting or arranging for another person to act as a nominee shareholder for a company

The Registrar of Companies issues the licence under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). This requirement has applied since 1 March 2018.

A licence is valid for three years and must be renewed before it expires. The register of licensees is public and searchable on the Registrar's website.

Trust or Company Service Provider Licence

A trust or company service provider licence covers the activities listed above. The key word in the legislation is "by way of business". If you provide these services on a commercial basis, even occasionally, you are likely carrying on a trust or company service business.

Common examples include:

• A corporate service provider that incorporates companies for clients
• A firm that provides company secretarial services to multiple clients
• An individual who acts as a professional company secretary for several companies
• A person who offers nominee director or nominee shareholder services

The licence applies equally whether you operate as a sole practitioner, a partnership, or a limited company.

AMLO Cap. 615 TCSP Licence

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) is the governing legislation. The TCSP regime sits within Part 5 of the Ordinance.

Holding a licence carries ongoing obligations. Licensed TCSPs must:

• Conduct customer due diligence on every client
• Identify and verify the beneficial owner of each client
• Keep records of the due diligence for at least five years after the business relationship ends
• Maintain a written anti-money laundering policy
• Appoint a compliance officer and a money laundering reporting officer

The Registrar has powers to inspect a licensee's records and premises. Non-compliance with the licensing conditions can result in the licence being revoked.

TCSP Licence Exemption Hong Kong

Certain persons and activities are exempt from the licensing requirement. The exemptions include:

• A person who is a lawyer, accountant or estate agent acting in the course of their regulated profession, provided the trust or company service is incidental to the professional service
• An authorised institution under the Banking Ordinance (Cap. 155)
• A licensed corporation under the Securities and Futures Ordinance (Cap. 571)
• A person who only provides services to a group company (wholly owned subsidiaries or fellow subsidiaries)
• An individual who acts as a trustee of a trust for a family member or friend, without remuneration

The exemption does not apply if the person holds themselves out as providing trust or company services to the public. If you are in doubt about whether an exemption applies, seek legal advice.

Offence and Penalty

Carrying on a trust or company service business without a TCSP licence is an offence. On conviction, a person is liable to a fine of up to HK$100,000 and imprisonment for up to six months.

Directors and officers of an unlicensed company that provides the service may also be prosecuted personally.

The Registrar maintains a searchable public register of licensees. You can check whether a provider holds a licence before engaging them. Engaging an unlicensed provider does not itself constitute an offence by the client, but the client's transaction may be delayed if the provider cannot satisfy due diligence requirements from other counterparties.