TCSP Licence Hong Kong: Who Needs One and Licensing Requirements Under Cap. 615

TCSP Licence Hong Kong: Who Needs One and Requirements

Any person carrying on a trust or company service business in Hong Kong must hold a licence from the Registrar of Companies, unless a statutory exemption applies. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) created this requirement, which has been in force since 1 March 2018.

The definition of a trust or company service business is broad. It catches forming companies or other legal persons. It also covers acting as, or arranging for another person to act as, a director or secretary of a company, a trustee of an express trust, or a nominee shareholder for a person other than a company whose shares are listed on a recognised stock exchange. Providing a registered office, business address, correspondence address or administrative address for a company is also a regulated activity. Whether a sole practitioner, partnership or body corporate, anyone performing these activities in Hong Kong must hold a valid TCSP licence issued by the Registrar of Companies under Cap. 615.

Hong Kong TCSP Licence Requirements

Cap. 615 and its subsidiary legislation set out the requirements for obtaining and maintaining a TCSP licence. An applicant must satisfy the Registrar of Companies that it is a fit and proper person to hold a licence. The Registrar will consider the applicant's criminal record, financial probity and business conduct.

A licence is valid for three years. The holder must apply for renewal before the licence expires. There is no grace period. Operating after expiry is an offence.

Licensees must comply with ongoing obligations under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance:

• Customer due diligence: Identify and verify the identity of every client. Where the client is a legal person, identify and verify the beneficial owner. Enhanced due diligence is required for clients from high-risk jurisdictions or where the client is a politically exposed person.
• Record-keeping: Keep records of customer due diligence and all transactions for at least five years after the business relationship ends or the transaction is completed.
• Policies and procedures: Maintain written policies, procedures and controls to prevent money laundering and terrorist financing.

The Registrar of Companies maintains a public register of licensees. The register is searchable online and shows the licensee's name, licence number, date of issue and expiry date.

Trust or Company Service Provider Licence Hong Kong

"Trust or company service provider licence Hong Kong" refers to the same TCSP licence. The Ordinance uses the phrase "trust or company service provider" to describe the person who carries on the business. The licence itself is called a TCSP licence.

A trust or company service provider is any person who, in the course of business, provides any of the services listed above. The definition catches both individuals and corporations. A company that provides company secretarial services to its own group companies may be carrying on a trust or company service business and therefore need a licence. The Registrar of Companies has published guidance notes on the application process. The application is made on the prescribed form, which requires details of the applicant, its directors and controllers, and its business activities.

TCSP Licence AMLO Cap 615

The TCSP licence is created by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). Part 5 of the Ordinance deals with trust or company service providers. Section 53A makes it an offence to carry on a trust or company service business in Hong Kong without a licence.

The Ordinance also sets out the customer due diligence and record-keeping requirements that apply to licensed TCSPs. These are found in Schedule 2 to Cap. 615. The requirements mirror those that apply to financial institutions under the same Ordinance.

A licensed TCSP must appoint a compliance officer and a money laundering reporting officer. The compliance officer ensures the firm complies with its AML/CFT obligations. The money laundering reporting officer receives internal reports of suspicious transactions and decides whether to make a disclosure to the Joint Financial Intelligence Unit. The Registrar of Companies has the power to inspect a licensee's records to check compliance. Failure to comply with the customer due diligence or record-keeping requirements is an offence.

Who Needs a TCSP Licence in Hong Kong

Any person who, in the course of business, provides any of the following services in Hong Kong needs a licence:

• Forming companies or other legal persons
• Acting as a director or secretary of a company
• Providing a registered office, business address or administrative address for a company
• Acting as a trustee of an express trust
• Acting as a nominee shareholder

The activity must be carried on in Hong Kong. A person who provides these services from outside Hong Kong to clients in Hong Kong may not need a licence, but the position depends on the facts. The Registrar of Companies has stated that a person carries on business in Hong Kong if the person has a place of business in Hong Kong or solicits business from Hong Kong.

Certain persons are exempt from the licensing requirement:

• Lawyers and accountants: A solicitor or certified public accountant who provides trust or company services in the ordinary course of their professional practice is exempt, provided the services are incidental to the professional practice.
• Licensed money lenders and banks: These are already regulated under other ordinances.
• Employees: An employee of a licensed TCSP who provides services on behalf of the employer does not need a separate licence.
• Group companies: A company that provides trust or company services only to other companies in the same group may be exempt.

The exemption for lawyers and accountants is narrow. It applies only where the trust or company service is provided as part of the professional practice and is incidental to that practice. A solicitor who sets up companies for clients as a standalone business, rather than as part of legal advice, is not exempt.

Penalties for Operating Without a Licence

Carrying on a trust or company service business in Hong Kong without a licence is an offence. The maximum penalty is a fine of HK$100,000 and imprisonment for six months. A person who is convicted may also be ordered to pay the costs of the prosecution. The Registrar of Companies can apply to the court for an injunction to restrain a person from carrying on the business without a licence. The court may also order the person to take steps to remedy the breach.

Register of Licensees

The Registrar of Companies maintains a register of TCSP licensees. The register is public and searchable on the TCSP website (tcsp.cr.gov.hk). The register shows:

• The licensee's name
• The licence number
• The date the licence was issued
• The date the licence expires
• Whether the licence is current or has been suspended or revoked

Search the register to verify that a company secretarial provider holds a valid licence. Using an unlicensed provider exposes the client to risk: the provider may not have proper AML/CFT procedures and may be committing an offence.

Summary of Key Points

• A TCSP licence is required under Cap. 615 for anyone carrying on a trust or company service business in Hong Kong.
• The licence is issued by the Registrar of Companies and is valid for three years.
• Licensees must comply with customer due diligence and record-keeping requirements.
• Operating without a licence is an offence punishable by a fine of up to HK$100,000 and imprisonment for up to six months.
• The register of licensees is public and searchable.
• Exemptions apply to lawyers, accountants, licensed money lenders, banks, employees and group companies, but the exemptions are limited.

For further information, refer to the Companies Registry website (cr.gov.hk) and the TCSP Licensee Register (tcsp.cr.gov.hk).