Nikita Veremeev
06.08.2025 | 6 min read
Updated: 06.08.2025
In 2025, according to FINTRAC, the transaction volume passing through Money Service Business (MSB) in Canada surpassed CAD 1.6 trillion: and this figure continues to grow at double-digit rates annually. This scale is no coincidence: Canada has established itself as one of the most transparent and technologically advanced financial markets for international business. But behind this growth lies another side: tightening AML/CTF regulations, new requirements for licensing financial services, and constant pressure from regulators on transparency and accountability.
Why are even experienced entrepreneurs and financial directors facing registration refusals for MSB, account blocks, and FINTRAC sanctions today? How to minimize these risks, obtain a financial or crypto-license in Canada, build an effective compliance system, and scale the business without failures?
Let me ask a direct question: are you ready for the new AML Canada standards and transparency requirements that are coming into force this year? If not, this article will help you not only understand the details but also gain a strategic advantage. I’ll explain how the COREDO team implements projects for MSB registration, obtaining a FINTRAC license, implementing KYC/AML procedures, and providing comprehensive legal support to ensure you can confidently build international financial services based out of the Canadian jurisdiction. Read the article to the end – here you will find not only answers but practical tools for real growth.
MSB License in Canada: What It Is and Who Needs It
The Canada MSB license is a permit to conduct activities in the field of money transfers, currency exchange, cryptocurrency transactions, and other financial services, issued by FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). This license has become a standard for companies dealing with cross-border payments, crypto assets, and international transfers.
In recent years, there has been steady growth in the number of applications for a financial license in Canada, along with stricter requirements for applicants. At COREDO, we see the MSB license becoming not just a formality but a critical element for entering the North American market and integrating with global fintech platforms.
Types of Activities under the MSB License
- Money transfers (including cross-border payments)
- Currency and cryptocurrency exchange (crypto-license Canada)
- Issuance and servicing of payment instruments
- Operations with prepaid cards
- Management of MSB branches and agents to expand geography
Implemented case by COREDO: registration of a legal entity under MSB for a large fintech startup from the EU, which, due to the FINTRAC license, was able to legally provide cryptocurrency exchange and international transfer services to clients in 27 countries.
Who Is Required to Obtain an MSB License
In Canada, all companies engaging in at least one type of MSB activity are subject to licensing requirements. Exceptions are minimal, such as companies that only deal with internal settlements and do not accept funds from third parties do not need a license.
At COREDO, special attention is given to due diligence on MSB owners and directors, as well as constructing a transparent MSB corporate governance system: this is critically important for successfully passing compliance procedures and preventing denials from the regulator.
MSB Registration in Canada – FINTRAC Requirements
MSB registration in Canada is a multi-stage process that requires not only document collection but also strategic planning. A FINTRAC license entails comprehensive compliance checks with AML compliance in Canada and international compliance standards.
Documents Required for an MSB License: Requirements
- Founding documents and personal data of the management
- Detailed organizational structure of the MSB
- Business plan for the license with financial forecasts
- AML/CTF policy and description of KYC procedures
- Confirmation of a virtual office or physical address
- References confirming the reliability of owners and directors (due diligence)
The solution developed at COREDO includes preparing the complete set of documents and guidance at all stages of interaction with FINTRAC, minimizing the risk of refusal.
Virtual Office or Physical Address – What to Choose?
A virtual office for MSB is permissible and actively used by international companies. On the other hand, to open a bank account for MSB, confirmation of a real presence is often required. The COREDO team helps find the optimal solution, considering banking requirements and the specifics of interaction with Canadian financial institutions.
Verification of Owners and Directors, Due Diligence
Verification of MSB owners and directors is one of the most challenging stages. FINTRAC evaluates not only the absence of criminal records but also experience in the financial services industry, compliance of the corporate structure with international AML standards, as well as transparency of funding sources. At COREDO, we implement internal audits and appoint a compliance officer at early stages, which significantly speeds up coordination and reduces the likelihood of denial.
AML Policy for MSB in Canada
AML Canada: it’s not just a formality; it’s the foundation of a sustainable business. In 2025, FINTRAC tightened AML requirements/CTF policy for MSB, including mandatory transaction monitoring, KYC and CTF procedures implementation, and regular reporting of suspicious operations.
KYC: Automation and Procedure Implementation
Modern KYC policy in Canada requires not only customer identification but also continual monitoring of their transactions. Implementing AML procedures in MSB, based on COREDO experience, becomes more effective with the use of AML automation technologies: integration with fintech platforms, use of machine learning to detect suspicious transactions, automation of data collection and verification about customers.
Responsibilities and Requirements for an AML Officer
The AML officer (anti-money laundering officer) is a key figure for MSB compliance in Canada. Requirements for the experience of an AML officer include knowledge of local and international legislation, experience in implementing internal policies, conducting internal controls, and audits. At COREDO, we select specialists with relevant certification and experience in international structures, ensuring compliance with the strictest standards.
MSB Reporting to FINTRAC: Fines and Sanctions
MSB reporting to FINTRAC includes regular submission of information on suspicious operations, updating branch and agent data, and annual activity reports. The absence of an MSB license or non-compliance with AML/CTF policies entails FINTRAC’s sanction measures: from large fines to full activity blocking.
Thus, careful adherence to all FINTRAC requirements and maintaining a high level of compliance are key aspects for successful MSB work in Canada. Next, let’s look at what constitutes the cost of obtaining an MSB license.
Cost of an MSB License in Canada
The cost of a Canada MSB license comprises direct and indirect expenses, as well as costs for maintaining compliance and implementing AML procedures. Financial forecasts for the MSB license should contemplate not only initial investments but also regular expenses for legal support, virtual office rent, staff salaries, and process automation.
Direct and Indirect Expenses for the License
- Government fees for registering a legal entity under MSB
- Payment for document preparation services for the MSB license
- Cost of virtual office rental and bank account opening for MSB
Indirect costs include expenses for implementing AML/CTF policy, staff training, IT infrastructure maintenance, and regular audits.
Financial Risks and ROI Calculation
Assessing the financial risks of MSB includes analyzing potential fines, compliance costs, and possible delays when interacting with banks. At COREDO, we develop financial forecasts for the MSB license and calculate ROI for MSB considering all variables: from licensing costs to expenses for scaling and integration with fintech platforms.
MSB in Canada: Branches, Agents, Fintech
Scaling MSB in Canada requires a structured system for managing branches and agents, as well as integration with modern fintech solutions to ensure transparency of financial flows and compliance with international AML standards.
Effective interaction between branches and agents becomes a key factor for sustainable growth of MSB and requires special attention to risk management and regulatory compliance.
Managing Branches and Agents – Risks and Requirements
Managing MSB branches and agents involves regularly updating data in FINTRAC, conducting partner due diligence, and implementing reliability assessment criteria. COREDO’s solutions allow centralized control and minimize risks associated with agent activities in foreign markets.
Cross-border Payments and AML Standards
Cross-border payments require particular attention to international AML standards and MSB cybersecurity. COREDO’s experience shows that implementing comprehensive monitoring procedures and transparency of financial flows increases investor and regulator trust, as well as reduces the likelihood of account blocks.
Innovation and Automation for MSB
AML automation technologies are becoming the standard for MSB in 2025. Integration with fintech platforms, automation of AML procedures, and using artificial intelligence for transaction monitoring significantly reduce costs and enhance compliance efficiency. The COREDO team implements innovative solutions that not only meet regulatory requirements but also lead market trends.
Legal Support for MSB: Risks and FINTRAC Audit
Comprehensive legal support for MSB: a key factor for success at all stages, from registration to scaling. Compliance for MSB in Canada requires continuous internal control, regular audits, and prompt preparation for FINTRAC checks.
Corporate Governance and Internal Control
Effective MSB corporate governance is built on a transparent organizational structure, clear delineation of authority, and regular internal audits. At COREDO, we implement best international practices, enabling our clients to successfully pass audits and minimize regulatory sanction risks.
Errors Leading to Sanctions in SEO
Common mistakes in obtaining an MSB license: incomplete document packages, inadequate AML/CTF policy development, absence of a qualified AML officer. Consequences of non-compliance with AML/CTF policies – from license denial to large fines and activity blockages.
COREDO’s practice shows: only a systematic approach and comprehensive legal support can mitigate these risks.
Practical Recommendations for Entrepreneurs
Practical recommendations for entrepreneurs will help navigate the key steps and nuances of doing business in Canada. The following subsections contain specific advice on launching and effectively managing MSB so every entrepreneur can confidently navigate the local business environment.
Launching and Managing MSB in Canada
| Stage | Practical Steps and Recommendations |
|---|---|
| Registration of a Legal Entity | Prepare founding documents, choose MSB structure |
| Business Plan Preparation | Develop financial forecasts, describe the business model |
| document collection for the license | Gather personal data of management, company structure |
| Implementation of AML/CTF Policy | Develop KYC/AML procedures, appoint an AML officer |
| opening a bank account | Select a bank, consider virtual office requirements |
| Implementation of Automation | Integrate AML/KYC platforms, automate monitoring |
| Managing Branches and Agents | Implement due diligence, update data in FINTRAC |
| Preparation for FINTRAC Audit | Conduct internal audit, regularly update policy |
Tips for Choosing a Partner:
- Evaluate the team’s experience in MSB registration and obtaining a FINTRAC license
- Check for expertise in international AML standards and compliance
- Ensure the presence of comprehensive solutions for automation and support
Recommendations for Cost Reduction:
- Use a virtual office for MSB if acceptable by the bank
- Implement KYC/AML automation to reduce personnel costs
- Regularly update business processes in accordance with new FINTRAC requirements
Adhering to these steps and strategies, as confirmed by COREDO’s practice, allows not only to obtain an MSB license in Canada but also to build a sustainable, scalable, and transparent international financial business.