Company Registration
2 Weeks
Local Director?
No
Bank Account Opening
4 Weeks
Travel Required?
No
Canada MSB License (Money Services Business) in 2026
- Tetra Consultants can help clients from all over the world obtain the Canada Money Services Business License, which falls under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, as well as the updated regulations from the Financial Transactions and Reports Analysis Centre of Canada, which came into effect in 2025. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) is intended to prevent crime through issues, such as financial failure, via crime.
- The enhancements to the law have provided the ability to monitor money services businesses better than ever before by creating higher standards of registration, reporting, and compliance to combat transnational threats, including money laundering and terrorist financing, while enhancing protection against new risks (i.e., fintech’s and cryptocurrencies).
Introduction to Canada MSB License
- The Canadian MSB Licence allows businesses to provide currency exchanges, money transfers, remittances, and cryptocurrency services across Canada in a licensed manner. Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) oversees the Canada MSB License and is essential for providing access to Canada’s fastest-growing and most valuable FinTech sectors, with billions of dollars in annual transaction activity, while allowing for the maintenance of high anti-money laundering standards to safeguard both the customer’s money and a business’s ability to operate legally and safely.
Timeline to secure Canada MSB License
- Generally, you can expect your Canada MSB license (Money Services Business) application to take minimally 1 month. Each application will be reviewed individually, and they may revert asking for additional supporting documents or information.
- For example, a clarification request may be reverted if the information previously provided is missing, incomplete, or inconsistent. Upon receiving a clarification request, you will have 30 days to make the necessary amendments or to verify the information submitted previously.
New 2025/2026 Bank of Canada (RPAA) Requirements
Mandatory Retail Payment Activities Act (RPAA) registration for Canada MSB license holders
- RPAA refers to Retail Payment Activities Act, which is a Canadian federal law that supervises payment service providers (PSPs). Bank of Canada is the primary regulator responsible for the supervision.
- Canada MSB License holders, acting as PSPs, are mandated to register with the Bank of Canada via the PSP Connect portal by September 7, 2025, for the purpose of compliance in 2026.
- Tetra Consultants is proficient in assisting our clients to attain RPAA registration with Bank of Canada once your Canadian MSB is successfully attained.
Retail Payment Activities Act (RPAA) impacting Canada MSB
- RPAA regulates MSB firms that are providing payment services including fund holding, EFT initiation/authorization, payment account maintenance, and clearing/settlement for Canadian end-users. This is in addition to traditional remittance and forex services.
Application fees and exemptions
- Application fees are non-refundable, and banks and credit unions are exempt from the fees. The registration is a must for MSBs that handle retail payment services.
Risk management and safeguards
- Full risk management systems, end-user fund protection systems, reporting systems for incidents, and operational resilience systems that meet Bank of Canada standards.
RPAA complements FINTRAC MSB rules
- RPAA builds on FINTRAC’s rules for money services businesses, providing a multi-layered solution for money services businesses looking to enter Canada’s payment market.
Seamless MSB + RPAA setup
- Tetra Consultants’ team of lawyers and licensing specialists is happy to assist our international clients with attaining a Canada MSB license from FINTRAC as well as RPAA registration with the Bank of Canada.
PSP Criteria under RPAA Registration:
- The Payment Service Providers are required to register with the Bank of Canada in case they are involved in the provision of payment services such as the collection of funds, transfer, redemption, or storage of funds that exceed an annual volume of CAD 10 million or are involved in cross-border transactions for Canadian clients.
Exclusions under RPAA Registration:
- Banks, foreign banks, insurance companies, credit unions, intermediaries acting on behalf of the registered PSP, incidental payment services with regard to the volume threshold, or technology providers are excluded.
What do you need to know about the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in 2026?
It is essential to understand the needs of the PCMLTFA regulations in Canada, which provide the foundation for the regulations governing MSB companies. The company will operate within the law when it is compliant with this regulation. Thus, here are the following important sections:
Section 11.1:
- Mandatory FINTRAC registration for all forex, remittances, and crypto services, which will be your first step in MSB regulations.
Section 9(1):
- Client verification for CA$3,000+ forex/negotiables, CA$1000+ remittances for KYC is essential.
Section 7:
- Immediately file Suspicious Transaction Reports when money laundering suspicions occur, there will be instant threat detection.
Section 12 and 48:
- LCTR/EFT reporting for transaction CA$10,000+ within 5-15 days, also, record to be kept for 5 years.
Section 73.1 to 73.16:
- AMPs up to CA$20 million for non-compliance and also some serious financial repercussions may occur.
Section 74:
- Criminal Penalties for non-compliance are a CA$2 million fine with a 10 year in prison for wilful offenses.
When will you require a Canada MSB License?
Businesses Providing Financial Services
- In accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, a valid MSB license is needed if a business offers the following financial services:
- Foreign exchange services
- Money transfer services
- Issuing or redeeming money orders or traveller’s cheques
- Virtual currency services, such as buying, selling, or transferring virtual currency
- Payment service provider services
Businesses Targeting Clients in Canada
- In addition, a license is needed if a business offers its services to individuals or entities in Canada, such as:
- Marketing or promotional materials aimed at Canadian clients
- Use of a Canadian domain name
- Listing in Canadian business directories
Businesses Serving Canadian Customers
- In addition, a license is needed if a business offers its services to individuals or entities in Canada, such as:
- Providing services to individuals or entities with Canadian addresses
- Accepting Canadian banking, credit card, or payment processing services
- Verifying identities issued by Canadian provinces or Canadian territories
Transactions Considered Direct Services
- Exchanging foreign currency in transactions exceeding US$1,000 with the same individual or entity is considered providing services directly in Canada.
How to obtain a Canada MSB License?
Step 1: Register a Canadian company
- To begin with, we will proceed with company registration in Canada with the Canadian federal or provincial authorities. Tetra Consultants offers you a vital local registered address, local nominee director, and company secretarial services. This initial step is usually achieved speedily within 2 weeks.
Step 2: Corporate bank account opening
- Next, we will proceed with a corporate bank account opening with reputable local Canadian banks or reliable international financial institutions. Immediately after the successful incorporation of your company, you can expect your account to be completely operational and prepared for MSB transactions within 4 weeks.
Step 3: Initiate pre-registration via FINTRAC online portal
- Further, we will provide you with access to the FINTRAC online portal for the vital pre-registration step of the process. You should then submit vital initial KYC requirements such as your official business number, authorized email address, and essential company identification information for rapid pre-registration approval.
Step 4: Submit comprehensive MSB registration application
- Subsequently, the detailed full MSB registration form is submitted, including essential bank account information, compliance officer information, employee counts, incorporation documents, as well as the mandatory police record checks for foreign businesses. Moreover, Tetra Consultants skilfully translates the documents into English if required for the successful processing of the application.
Step 5: Strategically appoint a Canadian representative
- Further, the selection of an efficient Canadian representative who will accept all official communications from the government is critical. Tetra Consultants quickly appoints a local representative who is considered ‘fit and proper’ for the successful processing of the registration application.
Step 6: Develop robust business plan and compliance program
- Consequently, the creation of an efficient business plan, including an AML/CTF compliance program that meets the exacting standards of the FINTRAC regulations and PCMLTFA, has been developed. In this respect, Tetra Consultants carefully crafts the compliance documents for the successful processing of the registration application.
Step 7: Appoint expert compliance officer
- Moreover, we will appoint a highly experienced compliance officer with expertise in PCMLTFA regulations and knowledge of the industry. We offer Canada compliance officer services to facilitate your knowledge in sustaining MSB compliance.
Step 8: Finalize and continuously enhance compliance policies
- Before FINTRAC verification, you need to document effectiveness reviews, employee training programs, and detailed risk assessments. Tetra Consultants offers strategic guidance to update and improve your compliance policies to effectively prevent money laundering risks.
Step 9: Secure official MSB license approval
- Finally, after FINTRAC verification, you will receive your official MSB License registration number in Canada.
Step 10: RPAA registration
- Once we are successful in procuring the Canada Money Services Business (MSB) License, we will then determine if the activities conducted by the client are included under the Retail Payment Activities Act, which is regulated by the Bank of Canada. If so, we will further assist the client in registration under the Retail Payment Activities Act.
FINTRAC reporting thresholds in 2026
Large Cash Transaction Reporting (LCTR):
- Submit a report to FINTRAC within 15 calendar days for transactions above CA$10,000. It should include the transaction date, amount, parties involved, type of transaction, and business details of the MSB. Records should be maintained for 5 years to comply with Canada’s MSB License.
Suspicious Transaction Reporting (STR):
- Submit a Suspicious Transaction Report to FINTRAC ASAP if you suspect any money laundering or financing of terrorism in accordance with PCMLTFA. It should include details of the client, transaction details, amount, etc.
Terrorist Property Reporting:
- Submit a report to RCMP ASAP if you suspect any terrorist-owned properties. It should include details of properties and suspect details. It is critical for Canada’s MSB License holders in 2026.
Cross-Border Currency Reporting:
- Submit a declaration form E677 to CBSA for transactions above CA$10,000. It includes reporting of currency and/or monetary instruments. Failure to comply may result in seizure and fines for MSBs.
Large Virtual Currency Transaction Reports:
- MSBs for virtual currencies shall file reports for transactions involving CA$10,000+ in crypto currencies to FINTRAC within 5 business days. Information to include is date, amount, exchange rate, originator/recipient details. Record retention for 5 years in accordance with PCMLTFA updates issued in 2020 and later.
Electronic Funds Transfer (EFT) Reports:
- EFTs involving CA$10,000+ shall be filed to FINTRAC within 5 days. Information to include is sender/receiver details, accounts, and references. Record retention for 5 years for Canada MSB.
Travel Rule for Wire Transfers:
- MSBs shall include originator/beneficiary name, address, and account details for wire transactions involving CA$1,000+. Mandatory record retention for 5 years in accordance with PCMLTFA for MSBs.
Looking to obtain Canada MSB License
- Tetra Consultants works as your advisor and trusted partner in your business expansion and payment license application. With our own team of lawyers, licensing specialists, compliance team, and accountants, we tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients.
- In addition, Tetra Consultants can also assist with attaining other offshore financial licenses depending on your long-term business goals. Also, our local team in Canada is more than happy to assist with your engagement
- Contact us to find out more about how to secure a Canada MSB License to conduct Money Services Businesses. Our team of experts will revert within the next 24 hours.
FAQs
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