Penalties for Acting Without a TCSP Licence in Hong Kong Under Cap. 615

The Offence: Carrying on Business Without a TCSP Licence

The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) requires any person who carries on a trust or company service business in Hong Kong to hold a TCSP licence from the Registrar of Companies. Operating without that licence is a criminal offence. The penalties for acting without a tcsp licence hong kong are set out in section 53G of Cap. 615: a fine of up to HK$100,000 and imprisonment for up to six months. The offence is committed on the first day the unlicensed activity begins, and each day the business continues without a licence is a separate offence.

The Registrar of Companies enforces the licensing regime through the Companies Registry. The Registry maintains a public register of all licensed TCSPs, which allows any person to verify whether a service provider is authorised. A business owner who engages an unlicensed provider is not itself committing an offence, but the provider is.

Hong Kong TCSP Licence Penalty

The maximum penalty for an individual or a body corporate convicted of carrying on a TCSP business without a licence is a fine of HK$100,000 and imprisonment for six months. The court has discretion to impose a lower fine or a shorter term, but the statutory ceiling is fixed. A body corporate is liable to the same fine; the directors or officers who consented to or connived in the offence may also be prosecuted personally under section 53G(4) of Cap. 615.

The penalty applies whether the unlicensed activity is the provider's main business or an incidental service. A person who offers company formation, registered office address, company secretary services, or nominee director services for a fee is carrying on a trust or company service business and must hold a licence. There is no de minimis threshold.

Hong Kong Unlicensed TCSP Consequences

Beyond the criminal penalty, the consequences of operating without a licence include:

• Reputational damage. A conviction is recorded on the public register of the Companies Registry and may be reported to professional bodies.
• Disqualification. A person convicted of an offence under Cap. 615 may be disqualified from acting as a director or company secretary under the Companies Ordinance (Cap. 622).
• Business disruption. The Registrar may apply to the court for an injunction to stop the unlicensed business. Clients may withdraw instructions once they learn the provider is unlicensed.
• Loss of client trust. A company that uses an unlicensed TCSP may itself face scrutiny from its bankers, auditors, or regulators, particularly in relation to anti-money laundering compliance.

The Registrar of Companies has published guidance stating that it will take enforcement action against any person it suspects of carrying on a TCSP business without a licence. The Registry conducts inspections and may request information from any person it believes is providing TCSP services.

Hong Kong Trust and Company Service Provider Offence and Penalties for Acting Without a TCSP Licence

The offence is defined in section 53G of Cap. 615. A person commits an offence if they carry on a trust or company service business in Hong Kong without a licence. The term "trust or company service business" is defined in Schedule 1 to Cap. 615 and includes:

• Forming companies or other legal arrangements
• Acting as a company secretary or a director for a company
• Providing a registered office or business address for a company
• Acting as a trustee or nominee shareholder for a trust or company
• Arranging for another person to act in any of these capacities

The offence applies to both natural persons and bodies corporate. A sole practitioner who provides company secretary services to a handful of clients is as liable as a large corporate services firm.

Exemptions: Solicitors and Accountants

Not every person who provides company services needs a TCSP licence. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance exempts certain regulated professionals who are already supervised under other anti-money laundering regimes.

A solicitor who provides trust or company services as part of a legal practice is exempt from the TCSP licensing requirement, provided the solicitor is regulated by the Law Society of Hong Kong under the Legal Practitioners Ordinance (Cap. 159). Similarly, an accountant who is a certified public accountant registered with the Hong Kong Institute of Certified Public Accountants and who provides company services in the ordinary course of an accountancy practice is exempt.

The exemption applies only when the service is provided by the professional in the course of their regulated practice. A solicitor who sets up a separate company to provide company secretary services to non-legal clients is not exempt and must hold a TCSP licence.

How to Verify a TCSP Licence

The Companies Registry maintains a public register of TCSP licensees at tcsp.cr.gov.hk. The register is searchable by licence number, business name, or individual name. Each entry shows:

• The licensee's name and business address
• The licence number and date of issue
• The licence expiry date
• Any conditions attached to the licence

A person who engages a TCSP should check the register before paying for services. If the provider is not listed, the provider is either unlicensed or exempt. If the provider claims an exemption, the client should ask for evidence of the exemption, such as a practising certificate from the Law Society or the HKICPA.

Customer Due Diligence and Record Keeping

A licensed TCSP must comply with the customer due diligence and record-keeping requirements in Schedule 2 to Cap. 615. These obligations apply when the TCSP establishes a business relationship with a client, carries out an occasional transaction, or suspects money laundering or terrorist financing.

The customer due diligence requirements include identifying and verifying the client's identity, identifying the beneficial owner, and understanding the purpose and intended nature of the business relationship. The TCSP must keep records of the due diligence for at least five years after the business relationship ends.

A TCSP that fails to meet these requirements may have its licence suspended or revoked by the Registrar. Operating without a licence is a separate and more serious offence.

The Public Register of TCSP Licensees

The register of TCSP licensees is a public register maintained by the Registrar of Companies under section 53E of Cap. 615. The register is available online and is updated regularly. Any person may search the register without charge.

The register serves two purposes. First, it allows clients to verify that their service provider is licensed. Second, it allows the Registrar to monitor the number and identity of licensed TCSPs in Hong Kong. The register does not include exempt persons such as solicitors and accountants.

Practical Steps for Business Owners

A business owner who needs company secretary services should:

1. Confirm that the service provider holds a current TCSP licence by searching the public register at tcsp.cr.gov.hk.
2. Ask the provider for its licence number and verify it against the register.
3. If the provider claims an exemption, ask for evidence of the exemption.
4. Do not engage a provider that cannot demonstrate it is licensed or exempt.

A business owner who suspects that a provider is operating without a licence may report the matter to the Companies Registry. The Registry investigates all complaints and takes enforcement action where appropriate.