A New Licensing Regime for Trust or Company Service Providers
With effect from 1 March 2018,
The new licensing regime is introduced under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Chapter 615(“AMLO”).
Under the new licensing regime, trust or company service providers(“TCSPs”) are required to apply for a licence from the Registrar of Companies(“the Registrar”) and satisfy a “fit & proper” test before they can provide trust or company services as a business in Hong Kong.
Any person who carries on a trust or company service business in Hong Kong without a licence commits an offence and is liable on conviction to a fine up to $100,000 and imprisonment up to six months.
The Registrar is empowered to grant, refuse to grant, renew, suspend or revoke a licence, and impose or vary any conditions in relation to a licence. A TCSP licence, once granted, will generally be valid for three years. TCSP licensees are required to obtain prior approval from the Registrar before any person becomes an ultimate owner, a partner or a director of a licensee.
They should also give notifications to the Registrar of any changes in particulars previously provided in connection with an application for the grant or renewal of a licence within one month of the change. A TCSP licensee who intends to cease to carry on the trust or company service business is also required to, before the intended date of cessation, notify the Registrar of that intention and the intended date of cessation.
With effect from 1 March 2018, a person will be deemed to have been granted a licence to carry on a trust or company service business in Hong Kong if immediately before 1 March 2018 (“commencement date” of the new licensing regime), he/she was carrying on a trust or company service business in Hong Kong and for that purpose held a valid business registration certificate.
If the deemed licensee does not apply for a licence during the transitional period of 120 days from the commencement date, the deemed licence will, unless terminated earlier(for example, when the deemed licensee ceases business), cease to have effect on the expiration of the transitional period. If the deemed licensee applies for a licence during the transitional period, the deemed licence will generally cease to have effect when the application is granted, rejected or withdrawn.
Compliance with Anti-Money Laundering / Counter-Terrorist Financing Requirements
TCSP licensees are required to comply with the statutory customer due diligence and record-keeping requirements as set out in Schedule 2 to the AMLO.
To ensure proper compliance of the aforesaid statutory requirements, officers of Companies Registry will conduct on-site inspections, investigate into any incidents of non-compliance and initiate disciplinary actions where appropriate.