Applying for Exemption from the Money Lenders Ordinance with Form 11

Money Lenders Exemption Form 11: Application for Ordinance Exemption

The Money Lenders Ordinance (Cap. 163) requires any person carrying on a business of money lending in Hong Kong to hold a licence from the Commissioner for Labour. The Ordinance also provides for certain exemptions. Applicants claim these exemptions using the money lenders exemption form 11, a statutory document submitted to the Commissioner for Labour to establish that the applicant falls outside the licensing requirement.

Who Qualifies for Exemption From the Money Lenders Ordinance

Not every lending activity requires a licence. The Money Lenders Ordinance exempts specific lenders by their nature, regulatory status, or the loan's purpose. The principal categories of exempted persons and companies are:

• Banks - Licensed banks under the Banking Ordinance (Cap. 155) are exempt from the Money Lenders Ordinance.
• Credit unions - Registered credit unions under the Credit Unions Ordinance (Cap. 119) are exempt.
• Insurance companies - Insurers authorised under the Insurance Ordinance (Cap. 41) that lend as incidental to their insurance business.
• Pawnbrokers - Persons licensed under the Pawnbrokers Ordinance (Cap. 166) in respect of pawnbroking transactions.
• Employers to employees - Loans made by an employer to an employee, provided the loan is not part of a moneylending business.
• Family loans - Loans between individuals connected by blood, marriage, or adoption, where the lender is not in the business of money lending.
• Specified purposes - Loans made for a specific purpose prescribed by the Chief Executive in Council, such as loans by a registered money service operator under the Anti‑Money Laundering and Counter‑Terrorist Financing Ordinance (Cap. 615).

If the applicant does not fit within an automatic statutory exemption, they may still qualify for an individual exemption order from the Commissioner for Labour under section 23 of the Ordinance. That is when Form 11 is used.

How to Apply for a Money Lender Exemption

The application process begins with completing Form 11. The form requires the applicant to:

1. Identify the applicant (individual or company) and provide its registered address and contact details.
2. State the ground on which the exemption is claimed - either an automatic statutory exemption or a request for a discretionary exemption order.
3. Describe the nature and volume of lending activity, including the total amount of loans advanced in the previous 12 months and the expected amount in the next 12 months.
4. Explain the business reason for the lending, such as intra‑group financing, employee welfare, or trade credit.
5. Provide supporting documents (see below).

Submit the completed Form 11 and its supporting documents to the Licensing Division of the Labour Department. There is no statutory fee for the application, but the Commissioner may impose conditions on any exemption granted.

Exemption Application Grounds

The grounds for exemption cited in Form 11 fall into two broad categories:

• Statutory exemptions - These are automatic and need only to be verified by the Commissioner for Labour. Examples include loans by a bank, a credit union, or an employer to an employee. For these, the form confirms the applicant’s status rather than requesting a new exemption.
• Discretionary exemptions - The Commissioner for Labour may grant an exemption to a person or company that does not fall within a statutory exemption but whose lending activity is incidental to a lawful business, or for a regulated activity that is otherwise licensed or supervised. A securities firm that lends to clients as part of its margin trading business, or a factoring company that advances funds against invoices, may apply for a discretionary exemption.

The applicant must specify exactly which ground applies, and the supporting documents must prove the lending does not amount to a stand‑alone moneylending business.

Supporting Documents Required

The Commissioner for Labour expects comprehensive supporting evidence with every Form 11. The following documents are typically required:

• A copy of the applicant’s Business Registration Certificate and, if a company, its Certificate of Incorporation and Articles of Association.
• Audited financial statements for the last two financial years, or management accounts if the applicant is newly established.
• A detailed description of the lending activity, including sample loan agreements, terms sheets, and records of loans made.
• Copies of any relevant licences or regulatory approvals (e.g., a Securities and Futures Commission licence, an Insurance Authority authorisation, or a money service operator licence) if the applicant is relying on a regulated activity ground.
• A statutory declaration signed by the applicant (or, if a company, by a director or authorised representative) confirming the truth of the information provided.

The Commissioner for Labour may request additional documents after reviewing the application. Processing times vary, but a complete application typically takes four to six weeks.

Form 11 Exemption Conditions

If the Commissioner for Labour grants a discretionary exemption, the exemption order will almost always include conditions. Common conditions include:

• The exempted person or company must not hold itself out as a money lender or use moneylending terminology in its marketing.
• The exempted lending must be ancillary to the applicant’s main business or regulated activity.
• The applicant must notify the Commissioner for Labour immediately of any material change in its circumstances, such as a change of shareholder, a change of business, or the commencement of lending to unconnected third parties.
• The applicant must keep records of all loans made and, upon request, provide them to the Commissioner for Labour.

Breach of a condition can result in the revocation of the exemption and potential prosecution for unlicensed money lending.

Important Distinctions: Form 11 vs Form 2 and Form 3

Form 11 is not an application for a money lender licence. It is an application for an exemption from the licensing requirement. If the applicant cannot satisfy the Commissioner for Labour that the lending is incidental or exempt, the correct route is to apply for a licence using Form 2 (for individuals or partnerships) or Form 3 (for companies). Those forms require a much more detailed disclosure of the applicant’s background, including fit and proper criteria, and involve a public notice and vetting process. Form 11 is reserved for cases where the exemption ground is genuine and clearly documented.

Further Information

The Labour Department’s Licensing Division publishes the current version of Form 11 and the accompanying guidance notes on the GovHK website. The Money Lenders Ordinance (Cap. 163) setting out the statutory exemptions can be accessed at Hong Kong e‑Legislation. For case‑specific advice, business owners should consult a solicitor experienced in Hong Kong financial regulation.