A Money Service Business (MSB) is a company that provides financial services or activities. Involving the handling of money or monetary instruments. Most governments regulate the MSBs to prevent money laundering, terrorist financing, and other illicit financial activities.
MSBs can include various types of businesses. Such as money transfer operators, currency exchanges, check cashing establishments, prepaid card providers, and virtual currency exchanges. These businesses play a vital role in facilitating financial transactions and providing financial services. Especially for individuals who may not have access to traditional banking services.
In Canada, a Money Services Business is defined under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
According to the PCMLTFA, an MSB is a business or entity that is located in Canada and conducts any of the following activities:
- Foreign exchange dealing. Buying and selling foreign currencies.
- Remitting or transmitting funds. Transferring money domestically or internationally on behalf of others.
- Issuing or redeeming money orders, traveler's checks, or other negotiable instruments.
- Selling or redeeming prepaid access products. That means, providing prepaid access to funds, such as prepaid cards or electronic wallets.
If any of these things define your business, you are classified as an MSB. MSBs are subject to regulatory requirements, including registration, reporting, and compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations. These regulations help ensure that MSBs operate in a manner that prevents illicit financial activities and promotes the integrity of the financial system.
To register a company and start your MSB in Canada, contact us now and we’ll help you with every step of the process.

Benefits of starting your MSB in Canada
Starting an MSB in Canada offers several advantages that make it an attractive choice. They have a stable and well-regulated financial system that promotes investor confidence and safeguards the integrity of the financial sector.
Canada boasts a highly developed and substantial economy, ranking as the world's ninth-largest in terms of gross domestic product (GDP). In 2020, the country's annual GDP reached $1.64 trillion in current USD, based on the most recent data provided by the World Bank. That offers opportunities for business growth and expansion.
The country has a high standard of living, a large consumer market, and a favorable business environment, making it conducive for establishing and operating an MSB. Their diverse and multicultural society has a significant immigrant population. This demographic provides a potential customer base for MSBs for services such as remittances and currency exchange, catering to the financial needs of individuals with international connections.
The country's robust regulatory framework helps protect against money laundering, terrorist financing, and other financial crimes. This framework is so sound, that their financial system, regulatory diligence, and commitment to combating financial crime are trusted globally. So, operating your MSB here can enhance your business's reputation. It will help you build trust among customers, counterparties, and financial institutions alike.
The Canadian government is committed to supporting entrepreneurship and helping small businesses. At the same time, they put a strong emphasis on social responsibility and environmental sustainability. Incorporating responsible business practices into your MSB can align with the values and expectations of customers, regulators, and the broader Canadian society. Various programs and initiatives are available to assist entrepreneurs in launching and growing their ventures. This creates opportunities for leveraging innovative financial technologies (Fintech) in your MSB operations, such as online money transfers, mobile payment solutions, and digital wallets.
How to set up an MSB in Canada?
To start a Money Service Business (MSB) in Canada you need to ensure compliance with the country's financial laws and regulations.
First, you must set up a company in Canada. We can easily help you with that. Then, to provide money services, you need to register with FINTRAC. And it is very important to register with FINTRAC before commencing operations.
To register with them, you need to complete the appropriate registration forms, provide business information, and pay the registration fee. Registering with FINTRAC establishes you as a reporting entity and allows you to fulfill your reporting obligations.
Once you have set up a business, it is important to know that as an MSB you need to be compliant with many different regulations and you are expected to report and keep records on pretty much everything you do.
FINTRAC has the legislative authority to issue administrative monetary penalties (AMPs) to reporting entities that are found to be non-compliant with the PCMLTFA and associated Regulations.
Luckily, we can make sure that your MSB is compliant with all the necessary regulations.
Compliance for MSBs in Canada
Firstly, you need to be compliant with AML and CTF requirements. For this, you’ll need an AML and CTF compliance program.
This program should include policies and procedures to identify and mitigate the risks associated with money laundering and terrorist financing. It should also cover customer due diligence (CDD), record keeping, transaction monitoring, and staff training.
Then, you’ll need to perform a comprehensive risk assessment specific to your business. You must identify and assess the potential risks. These risks include the nature of your services, customer base, geographical reach, and transaction volumes. This assessment will help tailor your compliance program and ensure effective risk mitigation.
You also need to collect information on your customers. You must establish procedures for verifying the identity of your customers and conducting ongoing monitoring of their transactions. That makes sure, that you comply with the KYC requirements.
You are expected to report suspicious transactions to FINTRAC. For that, you need to develop internal controls to identify and report transactions that may be linked to money laundering or terrorist financing activities.
And of course, you must regularly review and update your compliance program to address emerging risks and regulatory changes. And lastly, ensure that you maintain accurate and detailed records of your transactions, customer information, and compliance activities.
While it may seem that there is a lot of hassle in setting up a MSB, our experience assures us that it is worth the effort. To start your own MSB in Canada, contact us now. We have vast experience with setting up and managing MSBs and we are happy to help you make your business a success.