Canada is a vast country with a stable economy that is slowly but surely growing in the shadow of big brother USA. Today, a considerable number of crypto enthusiasts live here, who not only want to invest in digital currencies but also strive to do everything that develops this industry. Many startups that use crypto technologies (including blockchain) regularly appear here, and many companies have already begun to accept crypto as a payment method. It leads to the fact that more and more companies are striving to obtain a Canada MSB license because this makes it possible to legally work on the territory of this country and actively develop.
What is the difference between MSB and FMSB?
At first glance, Canada has relatively complex legislation regulating the activities of financial institutions. Still, it becomes clear that everything is much simpler than it seems at first glance. There are 2 main types of non-banking financial institutions -MSB and FMSB. Each of them has its fundamental features:
- MSBs are financial institutions that serve clients within the country;
- FMSBs are financial institutions that serve clients from different countries and use foreign currencies.
As a general rule, most organizations that seek permission to operate in this country obtain MSB status and desire to work in the domestic market, serving crypto enthusiasts from Canada. However, if you belong to the FMSB, you can also quickly get a crypto license, but you will have different requirements.
According to the laws, all legal entities and individuals that provide bill payment services or process payments for goods or services can use virtual currencies, including cryptocurrencies, in their work.
To make it easier for you to understand the difference between MSB and FMSB, we have compiled a small table for you:
| Characteristics | MSB | FMSB |
| Currency type | Works with Canadian currency | Works foreign currencies |
| State bodies regulating activities | FINTRAC | FINTRAC |
| Having a local address | Yes | No |
| Availability of local staff | Yes | No |
| Branches in the country | Yes | No |
| Examples | Western Union, MoneyGram | PayPal, Stripe |
However, if you are an agent of a registered MSB and FMSB and provide one or more services, you do not need to register additionally and will not be subject to the definition of MSB and FMSB.
If you find it difficult to understand these issues, you can visit online AML courses. Here experts will provide you with more information and answer questions you may encounter.
What is the process for obtaining a license?
Getting a work permit in this country takes only 8 – 10 weeks; after that, you will need another 2 – 3 weeks to start your company’s work. By comparison, the UK licensing period is approximately 6 months or more.
So, to get a work permit, you need to go through several necessary steps:
- Collection of documents (approximately 2 weeks). At this stage, you can only do this with a qualified lawyer who will tell you what package of papers you need to collect, help you do it as quickly as possible, and check the correctness of filling.
- Registration of a company in Canada (for MSB) or in any other jurisdiction (for FMSB) (average 4 – 6 weeks). So, you need to choose a name (it must be unique), rent an office, decide on the authorized capital, and find employees who meet the jurisdiction’s requirements.
- Opening a bank account (4 – 5 weeks). Local banks consider the crypto business risky, so not all institutions are ready to open an account for crypto organizations. That is why you need to prepare documents that can convince bank representatives that the project is viable for you. After opening an account, you must put the entire authorized capital in full.
- Application for licensing and registration with FINTRAC (up to 6 weeks). You can apply for a license and roll with the government regulator when the preparatory phase is completed. If the officers have no questions, you will receive a work permit within a few weeks. If the documents need to be filled out correctly, or the specialists have questions about your organization’s work, they can send an official request, and in this case, the terms for obtaining a license will be much longer.
Each of the above stages is of great importance. At each of them, you can only do this with the help of lawyers who must check the correctness of filling out the papers and how your organization complies with the requirements of the state regulator. Gofaizen Sherle specialists have extensive experience in this industry. They are well aware of the specifics of licensing in this jurisdiction, and they can do all the work on a turnkey basis and represent your interests in government agencies
