Almost 60% of new fintech companies in Asia experience delays or rejections in licensing due to non-compliance with updated AML and KYC requirements, and the total amount of fines imposed on payment organizations in Singapore and Hong Kong for 2024 exceeded $250 million. These figures are not just statistics but a real challenge for any business aiming to scale in Asian markets. Why do even experienced international players waste time and money during the licensing phase? What will change in 2025, and how can a company prepare for new standards to not only remain competitive but also strengthen its market position?
Financial Licensing Regulation in Singapore: Key Changes and Trends
New Payment Services Act Requirements and MAS Roles in 2025
Singapore continues to strengthen the regulation of financial licenses, focusing on transparency, sustainability, and consumer protection. The Payment Services Act (PSA) remains the primary piece of legislation governing the licensing of financial services, including payment systems, e-money, and cryptocurrency services. The Monetary Authority of Singapore (MAS) in 2025 is introducing new AML/CFT requirements, strengthening KYC standards, and implementing additional audit procedures for all license holders.
Types of Financial Licenses in Singapore: SPI, MPI, Money-Changing, DTSP
In 2025, the structure of financial service licensing in Singapore became even more differentiated. The main types of licenses:
- Standard Payment Institution (SPI): Suitable for startups and small fintech companies with a limited transaction volume (up to 3 million SGD per month). Capital and corporate governance requirements are lower, but transaction limits restrict scaling opportunities.
- Major Payment Institution (MPI): For mid-sized and large players operating without payment volume limits. Requires stricter AML/KYC controls, regular audits, and a robust IT infrastructure.
- Money-Changing License: Required for companies conducting currency exchange. In addition to standard requirements, proof of sound procedures for preventing money laundering is required.
- Digital Token Service Provider (DTSP): A new category introduced to regulate digital token and cryptocurrency operations. In 2025, DTSP requirements include mandatory integration with international payment systems and enhanced due diligence procedures for clients.
Licensing Features for Foreign Companies and International Fintech Groups
Registering a company for a financial license in Singapore requires well-thought-out strategic planning. For foreign companies, compliance with MAS for overseas clients becomes a key factor: it is necessary not only to meet local AML/CFT standards but also to integrate the corporate structure considering international investor and client protection requirements.
New Fines and Penalties for Non-compliance with Regulatory Requirements
From 2025, MAS tightens penalties for non-compliance with regulatory requirements. The amount of fines for violating new AML/CFT standards and suspicious activity reporting has doubled. Special attention is given to risk management in financial services: the absence of effective internal control procedures can lead not only to financial sanctions but also to license revocation.
Financial Licensing Regulation in Hong Kong: Latest Updates and Prospects
Main Types of Financial Licenses: SFC, SVF, MSO
Hong Kong maintains its status as one of Asia’s leading financial centers due to its flexible yet strict licensing system. The following main licenses are available for fintech companies:
- SFC License: Regulates brokerage, management, and advisory activities with financial instruments. Requires stringent corporate governance, AML policy implementation, and regular audits.
- SVF (Stored Value Facility) License: Required for e-money issuers and digital wallets. In 2025, the requirements for IT infrastructure, client protection, and operating limits management have been significantly strengthened.
- MSO (Money Service Operator) License: For companies making money transfers and currency exchanges. Includes mandatory due diligence procedures, KYC, and regular reporting to the regulator.
New AML/CFT and KYC Requirements for Financial Companies
In 2025, Hong Kong introduces updated AML/CFT standards synchronized with international FATF recommendations. New KYC procedures, extended compliance audits, and the implementation of automated systems for monitoring suspicious operations are mandatory for all license holders.
Licensing for Cryptocurrency and Web3 Projects: What’s Changed
In 2025, Hong Kong strengthens the regulation of cryptocurrency exchanges and Web3 projects. To obtain a license for storing digital assets and conducting operations with digital tokens, proving funding sources and implementing multi-layered systems for client and investor protection is now required.
Comparison of Hong Kong and Singapore Requirements for Fintech Companies
| Type of License | Jurisdiction | Main Requirements | Limits/Restrictions | Suitable For |
|---|---|---|---|---|
| SPI (Standard Payment Institution) | Singapore | Capital, KYC, AML, MAS | Up to $3 million/month | Startups, small fintech companies |
| MPI (Major Payment Institution) | Singapore | Stricter Requirements | No limits | Medium and large fintech companies |
| Money-Changing License | Singapore | Currency exchange procedures | Currency exchange only | Exchangers, travel market |
| SFC License | Hong Kong | SFC, AML, Corporate Governance | By service types | Brokers, asset managers |
| SVF License | Hong Kong | AML, IT infrastructure | By stored value | E-money issuers, wallets |
| MSO License | Hong Kong | AML, KYC, due diligence | By transaction volume | Money transfers, currency exchange |
AML Compliance in Asia: New Standards and Business Challenges
How AML/CFT Requirements Have Changed in Singapore and Hong Kong
In 2025, new AML/CFT requirements in Singapore and Hong Kong emphasize proactive risk management and the adoption of technologies for automating KYC and transaction monitoring. Companies are obliged to regularly update internal policies, conduct compliance audits, and provide extensive suspicious activity reports.
Practical Steps for Implementing a Compliance Infrastructure
In practice, implementing an effective compliance infrastructure requires:
- Developing and regularly updating AML policies in line with the latest MAS and SFC recommendations.
- Implementing automated due diligence and client monitoring systems.
- Integrating IT infrastructure for storing, analyzing, and transmitting data on suspicious operations.
- Conducting regular training sessions for employees and management.
Fines and Risks for Business Non-compliance with New Standards
Non-compliance with the new AML/CFT standards results in not only large fines but also strategic business risks: from account blocking to license revocation and loss of trust from partners and investors. To minimize risks, COREDO recommends implementing comprehensive risk management, conducting regular compliance audits, and using modern compliance automation tools.
Practical Recommendations for Entrepreneurs and Fintech Company Executives
How to Choose the Optimal License Type for Your Business
The choice of license depends on the scale of the business, the intended markets, and the specifics of the services. For example:
- SPI: For startups and small companies with limited turnover.
- MPI: For mid-sized and large players focused on scaling.
- Money-Changing License: For companies specializing in currency exchange.
- SVF/MSO: For projects in Hong Kong related to e-money, wallets, and money transfers.
Preparation for Licensing: Documents, Business Plan, Corporate Structure
Key steps:
- Preparing a detailed business plan for licensing that takes into account MAS/SFC requirements.
- Building a transparent corporate structure in line with international standards.
- Conducting due diligence and collecting a full set of documents for registering a company for a financial license.
- Ensuring MAS compliance for overseas clients, including the implementation of KYC/AML procedures.
Scaling the Business and Entering New Markets in Asia
Strategic planning for market entry in Asia requires integration with international payment systems, operating limit management, and understanding regulatory specifics in each jurisdiction. For international fintech operations, it is important to address client and investor protection and tax optimization in advance.
How to Prepare for Audit and Regular Reporting
For successful audit and reporting to MAS and SFC, it is necessary to:
- Implement modern technologies for automating operation monitoring.
- Regularly update internal AML/CFT policies.
- Prepare extensive suspicious activity reports and engage with regulators in real-time.
Key Takeaways and Actionable Recommendations for Business
- Key Changes: In 2025, financial licensing regulation in Singapore and Hong Kong becomes stricter, particularly concerning AML/CFT and KYC.
- Impact on Business: Tightening requirements demand investments in compliance infrastructure, automation, and staff training.
- Practical Steps: Choosing the optimal license, preparing a business plan, building a transparent corporate structure, and implementing modern IT solutions for AML/KYC.
- Risk Minimization: Regular audits, automation of compliance processes, and active interaction with regulators.
- Market Prospects: Companies adapting to new standards gain competitive advantages and access to international markets.
FAQ: Frequently Asked Questions About Financial Licensing Regulation in Singapore and Hong Kong
You need to register the company with a local director, prepare a business plan, undergo due diligence, and submit an application to MAS. It is important to pre-plan the corporate structure and AML/CFT compliance.
New requirements for DTSP have been introduced, KYC standards have been strengthened, reporting has been extended, and additional audit procedures have been implemented for digital token operations.
Founding documents, a business plan, proof of capital sources, AML/KYC procedures, and management information are required.
Implement automated KYC systems, develop internal AML policies, regularly update due diligence procedures, and train staff.
SPI is suitable for startups with limited turnover, while MPI is for companies planning to scale and operate without transaction limits.
It is necessary to ensure the storage and analysis of large data volumes, integration with international databases, and automation of operation monitoring.
A business plan must be prepared, a multi-level client protection system must be implemented, and IT infrastructure audits must be passed, meeting SFC requirements.
Further tightening of AML/CFT standards is expected, along with integration with international monitoring systems and the development of requirements for investor and client protection.