Ready-made payment system in Hong Kong

Obtaining an MSO license in Hong Kong is, in essence, a passport to the world of global finance. In the polity, one of the most technologically advanced centers in the world, this license is mandatory for firms working with cross-border remittances, currency conversion, and cryptocurrencies. And although obtaining a Money Service Operator license in Hong Kong attracts a growing number of transnational enrollers, the sequence itself is lengthy and painstaking.

The sale of shelf remittance systems with an MSO warrant in the polity allows the interested party to speed up the sequence of entering the pecuniary trading field of this polity, ceasing the need to go via a lengthy licensing procedure from scratch. During the deal, the acquirer receives a shelf business with an MSO warrant in the polity, including a legal entity enrolled in the Companies Register, bank accounts and technological infrastructure optimized for performing remittance deals and transnational exchange deals.

The polity demonstrates a stable leadership among global pecuniary centers, due not only to a stable and predictable legal setup, but also to a high level of economic freedom, expressed in the absence of strict currency restrictions and a preferential tax policy. The absence of dividend tax, capital gains tax and VAT makes this polity attractive to transnational investors. Increased mandates for abidance with AML/CFT policies imposed by pecuniary overseers assert a high level of protection of the pecuniary setup from unauthorized deals. Together, these factors stimulate demand for the purchase of shelf remittance setups with a polity’s MSO warrant.

Scope of activity

The polity is actively implementing innovative technologies in remittance setups, which contributes to the efficiency and security of pecuniary deals. This polity has close ties with other major pecuniary trading fields of the world, which provides MSO licensees with admittance to global pecuniary resources. Thus, the chance to buy a shelf firm in HK with an MSO warrant attracts more expat enrollers.

The MSO warrant authorizes its holder to undertake a broad scope of pecuniary deals, including, but not constrained to, conversion deals with various types of currencies, both in the traditional format via stationary exchange offices and via innovative digital platforms. Strict adherence to the principles of transparency and reporting, expressed in the mandatory recording of detailed terms of each deal (amount, currency, counterparties), guarantees abidance of the licensee's schemes with the legislative provisions governing the pecuniary trading field of the polity. The implementation of automated data processing setups helps to optimize trade sequences, ensuring a significant increase in the speed and accuracy of currency exchange deals.

Procuring a ready-made remittance system in the polity gives the prerogative to start carrying out automated conversion of significant amounts of money in transnational settlements in a short time. Automated setups sequence applications, undertake settlements using both current and fixed exchange rates, and complete conversion operations without direct human intervention.

The purchase of a Hong Kong payment system with an MSO license opens up admittance to advanced analytical tools designed to forecast the dynamics of currency pairs and comprehensive analysis of market trends. Based on the data received, the setup is able to generate recommendations for hedging currency risks within long-term contracts, optimize the choice of the optimal moment for carrying out currency exchange deals and reduce the linked pecuniary costs. The use of these setups helps improve the quality of pecuniary oversight by minimizing the subjective factor and asserts the legality of deals related to currency risk oversight.

Receiving an MSO license in Hong Kong gives its holder the prerogative to undertake wholesale foreign exchange trading. This warrant allows spot foreign exchange deals, which involve fixing the exchange rate at the time of the deal and its immediate execution. In addition, buying a firm with an MSO warrant in the polity gives the prerogative to use derivative fiscal instruments, namely forward contracts, to fix the currency parity for a future period, in order to reduce the likelihood of negative fiscal consequences linked with the instability of exchange rates.

In addition to the above aids, the purchase provides the prerogative to make remittances between participants in the fiscal aids market. Each remittance deal is recorded in the electronic remittance setup, and the operator is obliged to assert the safety of records about the transfer amount, remittance currency, identification data of the parties to the deal, date and time of execution of the remittance order. Data on remittances made are subject to storage for the period established by law and are provided upon request of authorized bodies.

A shelf remittance setup in the polity opens admittance to transnational remittance setups, warranting conversion deals in various currencies without restrictions on amounts. This trade model is aimed at subjects of transnational commerce that need effective tools for managing cash flows in the context of globalization.

Licensed remittance service providers provide integrated software products designed to automate cross-border fiscal deals in the sequence of e-commerce. The solutions assert accelerated remittance processing, automatic currency conversion in accordance with the mandates of AML legislation and other applicable directives. The main consumers of these aids are online stores engaged in cross-border e-commerce.

The warrant authorizes its holder to organize and implement small-volume cross-border remittances between individuals in peer-to-peer (P2P) mode without involving traditional banking setups. This service is characterized by low commission fees, high deal processing speed and the ability to track their status online.

Purchasing a remittance setup with an MSO warrant enables comprehensive oversight of corporate clients' cash flows via automated fiscal instruments. The setup enables settlements with counterparties, including mass remittances of remuneration to staff and dividends to financiers. Integration with ERP setups asserts synchronization of fiscal deals, automating the sequence of generating, sending and monitoring remittance records. As a result, the fiscal schemes of the enterprise are significantly optimized, the risk of errors is lowered and remittance terms are accelerated.

Receiving the MSO warrant grants the entity the prerogatives to perform schemes related to managing correspondent accounts of banking and other fiscal institutions. This activity implies the provision of a range of aids, including, among other things, assistance in carrying out transnational settlements in various currencies, performing multi-stage banking operations, as well as providing innovative fiscal products and aids adapted to the needs of large corporate clients.

Selling a shelf remittance system with the warrant in HK is an effective way to speed up the sequence of entering the fiscal aid market. The buyer gets admittance to a proven technological infrastructure optimized for processing electronic remittances, including complex deal routing schemes. The setup has a high degree of scalability and adaptability to changing trade needs, providing a competitive advantage in the dynamic fiscal technology trading field.

Receiving a shelf remittance system in HK with an MSO warrant allows you to integrate innovative blockchain solutions to lower deal costs and accelerate fiscal flows within the current legal framework. Examples of practical application include the creation of decentralized accounting setups that provide an immutable digital trace of each deal, as well as the use of self-executing contracts to automate contractual obligations.

Expat enrollers prefer to procure a shelf remittance setup in the polity, which has technological platforms that allow it to function effectively in a multi-currency environment. The ability to make cross-border payments 24/7, while taking into account the diversity of currencies and supervisory mandates, makes such firms attractive partners for clients with global pecuniary needs.

legal formalities

A shelf remittance system with an MSO warrant in the polity for sale is a trade setup authorized to undertake currency exchange and transfer funds, enrolled in the form of a Private Limited Company (LTD). Licensing of this type of activity is entrusted to the Customs and Excise Department (CeED). If any alterations are made to the records or setup of a firm with an already enrolled MSO warrant, they should be reported to CeED.

A shelf firm with a remittance setup warrant in HK must have a certain level of pecuniary stability. The presence of pecuniary reserves in such firms is confirmed by audit reports, pecuniary statements and bank statements. In the event of an alteration in the pecuniary criteria or trade model of the received enterprise, the new owner is obliged to assert abidance with the established norms by increasing capital or adjusting the pecuniary strategy.

All firms incorporated in the polity are requisite to have a local legal address. Procuring a shelf remuneration system with an MSO warrant in the polity provides the chance to alter the location of the legal entity. However, such an alteration requires prior approval from CeED at least 14 days before the alterations are made and is linked with the need to abide by a number of supervisory mandates. In particular, it is necessary to assert the creation of specialized storage facilities for archival storage of both paper and electronic media containing records necessary for the implementation of schemes. Admittance to these storage facilities should be provided exclusively to personnel with the appropriate authority, which should be regulated by the internal records of the legal entity.

In addition, the legal entity is obliged to organize workplaces for employees responsible for the implementation of settlement deals, monitoring of pecuniary flows and fulfilling the obligations to provide reports to the supervisory bodies. The legal entity must be prepared to perform inspections and audits undertaken by authorized representatives of CeED. During these inspections, representatives of the supervisory authority have the prerogative to request any records necessary for the supervision of the legal entity's schemes.

Purchasing a remittance setup in the polity implies transferring to the buyer an already established set of measures of internal legal monitoring. The setup is built on the basis of a risk-oriented approach and includes a set of mechanisms aimed at preventing the use of the remittance setup for money laundering. The setup provides for the use of KYC) and enhanced customer verification (EDD), as well as continuous monitoring of pecuniary deals. The collected information about clients and deals is processed in accordance with the mandates of the law and is used to generate reports, fulfill supervisory mandates and perform internal control.

During the due diligence procedure, the regulator carries out a comprehensive check of the candidate, including an analysis of criminal history both at the national and transnational level. Confirmation of the professional qualifications of the future director involves the provision of relevant diplomas and certificates. In general, the entire sequence of checking the purity of the deal by CeED involves a comprehensive legal examination of the conveyed records, an in-depth analysis of the origin and legality of the sources of financing, and an assessment of the abidance of candidates for the positions of managers and beneficiaries with the criteria established by the regulator.

Sale of ready-made payment systems in HK with MSO permit

Basically, options can be found with the help of specialized intermediaries, for example, brokers who, acting as agents of sellers, form catalogs of ready-made firms warranted to carry out money transfers in the polity. However, in order to perform a comprehensive due diligence of the acquired trade, including a comprehensive assessment of the trade setup, pecuniary and economic schemes, tax obligations and debt burden, it is best to engage a qualified lawyer with experience in supporting the purchase of shelf remittance systems in the polity.

Legal consultants provide comprehensive legal protection of clients' interests by performing legal due diligence. During this procedure, a comprehensive check of the legal purity of the trade is undertaken, including an analysis of licensing records (in particular, MSO warrants), pecuniary statements and the history of trade deals (if any). This allows identifying and minimizing potential legal risks, such as hidden debts, lawsuits and other legal disputes.

Particular attention is paid to verifying the firm's supervisory status, which confirms its legal capacity. To obtain reliable information on licensing, it is advisable to refer to the data contained in the official enrollment of CeED firms. In addition, during the due diligence of a shelf remittance system in the polity, a thorough analysis of the records is undertaken, allowing us to assess the abidance of the firm's schemes with AML/CFT mandates and the absence of any violations in its history.

During the legal audit, a comprehensive check of the firm's abidance with the mandates of transnational FATF norms and national regulations (CeED) is undertaken. Agreements with clients and counterparties are analyzed, a legal examination of the firm's judicial practice is undertaken, including a search for information on legal disputes in open directories. The abidance of the firm's personnel policy with labor legislation and the presence of labor disputes are checked.

Another step that requires a scrupulous approach is checking the IT setups. Also, priorto it is necessary to make sure that the information setups used by firms with an MSO license in Hong Kong have passed mandatory certification and must be configured in such a way as to assert automated monitoring of pecuniary deals in real time. It is necessary to provide for integration with the transnational setup for the transfer of financial messages (SWIFT) and the use of specialized software for the timely submission of suspicious transaction reports (STR). In order to lower the risks linked with cyber threats, information setups must have a high degree of resistance to malicious influences, as well as scalability to adapt to increasing volumes of processed data.

The next stage is to agree on the terms of the deal. Let's start with the fact that the deal price must be agreed upon. The worth of the deal for the trading of shelf firm in HK with an MSO warrant is formed taking into account a comprehensive examination, covering the pecuniary condition of the enterprise, an analysis of legal risks and an assessment of the client base. The analysis includes an assessment of the solvency and liquidity of the firm, as well as an assessment of its client base in terms of stability and diversification, which allows you to determine the real value of the trade and lower the risks for the buyer.

The fee of the shelf remittance system is directly contingent on the functionality of its information setup. The latter, as we said, is subject to a comprehensive assessment in terms of abidance with AML legislation, throughput, cyber resilience and scalability potential.

When acquiring a polity’s MSO-licensed firm via multilateral financing, the acquirer is requisite to submit a detailed deal budget.

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The records package must contain the following:

• A detailed breakdown of the pecuniary investment ratio from each source, expressed as a percentage or share.
• Documentary evidence of funding sources, including but not constrained to bank statements, pecuniary statements and loan agreements that confirm the legality and origin of funds.
• A step-by-step description of the procedure for transferring funds and their intended use within the framework of the deal, including time frames.

In case of non-abidance of funding sources with the mandates of the legislation on combating the legalization of illegally obtained income, the sale of a shelf remittance setup in the polity with an MSO warrant may be suspended until the identified violations are completely eliminated, or the authorized body has the prerogative to apply administrative measures, including the imposition of pecuniary sanctions and performing an unscheduled inspection of the legal entity's schemes.

By the way, sometimes a situation may arise when buying an existing remittance model with an MSO warrant in HK, burdened with debts or other controversial aspects, turns out to be an economically more advantageous solution due to a significant reduction in the cost of the deal. In such cases, the buyer has the prerogative to insist on the inclusion of warranty conditions in the purchase and sale agreement, providing, in particular, the prerogative to receive pecuniary compensation when previously unknown obligations are identified, as well as the provision of assistance by the seller during the transition period in order to lower the risks linked with the integration of the acquired trade.

The contract of sale of a shelf remittance setup in HK may include provisions for post-sales monitoring. Such a condition will allow the buyer to promptly identify any discrepancies between the information provided by the seller and the actual pecuniary position of the acquired trade and, if necessary, require the seller to provide suitable guarantees and compensation.

As a result of purchasing the shelf remuneration firm in the polity with an MSO warrant, the new beneficial owner initiates the sequence for alterations to the Companies Registry. During this procedure, a corresponding application is conveyed for re-registration of the share capital and/or alteration of the oversight bodies of the legal entity.

To complete the re-registration procedure, the following package of records must be provided:

• A notarized copy of the purchase and sale agreement, which sets out in detail the terms of the deal and indicates the details of the new owner.
• Originals or notarized copies of identity records of new financiers and overseers (passports, identification cards, proof of residence).
• Standard form of notification of alterations provided for by the directives governing the schemes of Companies Registry.
• A document confirming remittance of the state fee.

The terms of re-enrollment to a new owner vary from four to eight weeks and can be adjusted depending on the completeness of the materials provided. The overseer has the prerogative to initiate an additional request for information, which entails an extension of the review period. Upon completion of the deal, it is mandatory to update the information on the composition of financiers (participants) and oversight bodies in the relevant directories. If the location of a legal entity alterations as a result of the deal, it is necessary to undertake state registration of the alterations.

What other aspects are important to consider?

Having decided to procure a shelf firm in the polity, please note that contingent on the outcomes of the preliminary pecuniary examination, the parties undertake to make an advance remittance in the amount of 30% to 50% of the total cost of the deal object. The specified remittance acts as a guarantee of the fulfillment of onuses by the buyer and indicates his intention to procure a warranted remittance setup. The full calculation of the bill is undertaken after the fulfilment of the sequence for the transfer of ownership of the polity remittance system with an MSO warrant and the introduction of appropriate alterations in the state directory. If the remittance is made in transnational currency, the buyer has the prerogative to fix the exchange rate by concluding an appropriate agreement or use pecuniary hedging instruments to lower the risks linked with possible fluctuations in exchange rates.

Legal entities are requisite by law to form reserves sufficient to cover prospective losses and assert continuity of their operations. These reserves, saved in a separate bank account, are subject to targeted use and may be used exclusively to cover operating expenses or compensate for damage to clients in the event of force majeure. The amount of reserves is calculated based on a risk-oriented approach, taking into account the specifics of the legal entity's operations and linked risks. Evidence of the availability of a sufficient reserve fund may be requested by supervisory bodies in the course of supervisory schemes, as well as by potential investors or partners.

In order to assert that the acquired remittance setup complies with legal mandates and optimizes trade sequences, the new owner may begin a comprehensive modernization of internal directives and technological solutions. During this initiative, due attention is usually paid to reviewing and updating policies to combat pecuniary fraud. In particular, the subject of development is the procedures for identifying and verifying clients, monitoring pecuniary deals, and generating reports in accordance with established norms. Particular attention is paid to improving the mechanisms regulating the procedure for actions when identifying suspicious deals or signs of involvement in pecuniary deals of persons posing an increased risk.

In order to improve the efficiency of corporate oversight and optimize costs, a comprehensive audit of existing trade sequences is performed. During the audit, duplicate or outdated operations are identified that are subject to automation via the implementation of innovative software solutions. Personnel undergo certification and retraining in order to adapt to new norms, including mastering modernized information technologies. In parallel, trade sequences are reengineered in order to lower time and resource costs. Upon completion of all stages of procedural alterations, the firm begins work under the leadership of a new owner.

Levy planning when procuring MSO licensed firms in HK

It is useful to understand the tax implications of the deal during purchase. All firms are subject to corporate tax if their profits are derived from sources within the polity. The tax rate is differentiated: 8.25% applies to the taxable base of up to HK$2 million, while the rate of 16.5% applies to amounts above this threshold. The tax legislation, based on the territoriality principle, provides tax incentives to trade entities holding an MSO license in Hong Kong, exempting them from paying tax on profits earned outside the borders of this polity.

After the acquisition of the shelf remittance system is done, it is possible to restructure trade sequences in order to move them outside this polity, which will allow for tax optimization. The implementation of this strategy includes holding trade meetings and concluding deals in transnational territories, using bank accounts in transnational banks. Equally, it is compulsory to assert full abidance with IRD mandates, including maintaining detailed records and providing the necessary reporting.

Another effective mechanism for minimizing the tax burden is legitimate oversight of tax losses. Under the current legislation, a taxpayer has the prerogative to include in the expenditures that reduce the taxable base, costs directly related to the implementation of its trade schemes. In order to recognize such expenses as tax deductions, it is compulsory to have properly executed records asserting their validity. Such records include real estate lease agreements, payrolls confirming the accrual and remittance of wages, certificates of work performed (services rendered) related to the modernization of information setups. The zero VAT rate creates favorable conditions for reducing the cost of aids provided by entities with a money transfer warrant in the polity.

Activating cross-border pecuniary deals by purchasing a HK-based shelf payment system authorised as a money services operator (MSO) provides levy optimization opportunities via the polity’s network of double tax treaties (DTAs) with over 40 territories. To get the tax benefits given by the DTA, a trade entity must provide evidence of its tax residency in the polity, aided by a certificate issued by the IRD. Also, it is compulsory to document the receipt of income in a transnational DTA partner country.

Responsibilities of a company with an MSO license

An MSO warrant in the polity grants its holder the status of a pecuniary trading field entity whose schemes are subject to state supervision. Institutional restrictions imposed on participants in remittance deals are an integral element of the legal framework designed to assert pecuniary stability and protect the interests of economic entities involved in the sequence of providing pecuniary aids.

The licensee is obliged to:

• Bear full legal responsibility for abidance with AML procedures, including comprehensive customer identification, in strict accordance with the mandates of applicable law, taking into account the possible legal consequences of non-abidance.
• Assert regular reporting to the regulator of the results of the pecuniary analysis undertaken, in order to prevent and suppress illegal pecuniary schemes.
• Assert the availability of equipped premises, in accordance with supervisory acts, for the storage of accounting records (LPS) on the territory of the state.
• In case of operating a monetary service in the polity without having a fixed place of trade, establish a local oversight office.
• Submit reports to CeED in a timely manner as failure to do so may result in the revocation of the Hong Kong money service operator's licence.
• Maintain the pecuniary stability of the scheme for the timely and fulfillment of onuses to clients and contractors in conformance with the terms of undertakings and established legal norms.

Meanwhile, the term "suitable premises" used in relation to firms with a Money Service Operator license in Hong Kong covers not only production areas, but also real estate objects intended for marketing schemes, negotiations with counterparties, and other property provided to the licensee for possession and use in conformance with the terms of the concluded undertaking. In order to evaluate the abidance to premises with the generated mandates, the CeED must be granted the prerogative of admittance to all of the specified objects. Warehouses intended for storing records and archival materials located outside the polity, educational institutions used for staff development, and other objects not directly linked to the implementation of the authorised plan are exempt from registration as suitable premises.

Suspension and revocation of the license

A combination of material violations committed by entities operating as money transfer operators (MSOs) may entail serious legal consequences, such as suspension or revocation of the license to undertake such schemes. Such violations include, in particular, ignoring the procedures for proper identification of customers (CDD) and enhanced identification (EDD), systematic failure to comply with the established deadlines for the submission of STR, as well as repeated failure to abide with records security mandates, expressed in non-abidance with established data protection norms. In addition, the basis for suspension of the warrant may be the intentional or negligent failure to abide with the legal mandates of the supervisory authority, such as mandatory audits, software updates and other technical means necessary for the implementation of the authorised scheme.

Initiation of the administrative action procedure by the regulator (CeED) against a pecuniary trading field entity is accompanied by sending the letter a notice of identified violations of licensing mandates. The said notice sets deadlines for ceasing the violations committed, and determines temporary restrictions on the implementation of certain types of operational schemes. In particular, a firm with a remittance setup warrant in the polity may be prohibited from opening new client accounts, performing certain types of remittance deals and other deals.

In case of elimination of the identified violations within the established timeframes, the restrictions on the implementation of operational schemes are subject to cancellation, and the pecuniary trading field entity restores the full scope of its license prerogatives. In case of failure to comply with the order of the supervisory authority within the established timeframes, the financial license of the MSO in Hong Kong may be suspended for a period of thirty to ninety calendar days. For the period of such a measure, the pecuniary trading field entity is obliged to completely cease all types of schemes approved by the license and take measures to eliminate the identified violations. Upon expiration of the license suspension period, the pecuniary trading field entity is obliged to submit to the supervisory authority a report on the results of the work it has undertaken to eliminate the violations of the license mandates.

Repeated establishment of facts of non-fulfillment or improper fulfillment of obligations by the licensee under the AML/CTF policy, expressed in systematic violation of the specified procedures, including non-abidance with the principles of KYC, CDD, EDD, concealment of deals that raise reasonable doubts about their legality, or submission of false data to the regulator, may serve as grounds for a decision to suspend or revoke the license. If gross violations of the mandates of the legislation on the protection of personal data are revealed, resulting in a leak of information or other negative consequences, the Money Service Operator license in Hong Kong can be revoked via the court.

The procedure for cancellation of a license is a multi-stage administrative sequence. First, the licensee is officially notified of the intention of the state body implementing licensing to deprive it of the prerogative to undertake a specific type of activity. The specified notification records in detail the violations of license mandates identified during supervisory schemes, which served as the basis for initiating the cancellation procedure. Second, the licensee is granted the prerogative to administratively appeal the measures taken by the regulator, expressed in the holding of hearings. This procedure is the last opportunity for the licensee to present evidence of the elimination of the identified violations and justify the retention of the license.

In the context of preserving the prerogatives of a firm with a remittance model warrant inHK, the need to eliminate all, even minor, deviations from legal mandates is of particular importance, since the regulator is characterized by a high degree of scrupulousness when performing inspections. Thirdly, based on the results of the hearings, the regulator makes a decision to cancel the license if the evidence presented by the licensee is considered unconvincing or the violations are systemic and persistent.

As a result of the license cancellation, the trade entity loses the prerogative to undertake any operations related to cross-border money transfers and currency exchange deals. The fact of violation of licensing mandates entails the entry of a corresponding entry in the register of pecuniary sanctions, which may entail the bringing of officials to administrative and/or criminal liability.

Conclusion

The polity offers MSO licensees a combination of legal, economic and geographic advantages. Getting a shelf remittance system with an MSO warrant in the polity means acquiring a package of corporate prerogatives that includes not only a technological asset in the form of software and infrastructure, but also a set of pecuniary assets expressed in established trade relationships with counterparties. Such a deal allows the new owner to avoid lengthy and complex licensing procedures, as well as reduce the risks linked with non-abidance with supervisory mandates.

If you are planning to buy a shelf remittance setup in the polity, then our firm's experts can advise on all legal formalities of the sequence, as well as provide full support in the sequence of re-registering a ready-made payment setup in Hong Kong with an MSO warrant.