FMSB: When a Foreign Business Must Register in Canada

Under Canadian law, a “foreign money services business” (FMSB) refers to a money services business operating from outside Canada that provides financial services to Canadian clients. In practice, this means international fintech or crypto companies offering services like currency exchange, money transfers, or virtual currency trading to people in Canada. If your overseas business serves Canadian customers in these ways, you fall into the FMSB category and must register with Canada’s financial intelligence unit (FINTRAC) before doing business. This requirement is not just bureaucratic – it’s a legal obligation under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), aimed at bringing foreign operators into Canada’s anti-money laundering regime. Importantly, Canadian financial institutions are prohibited from opening or keeping accounts for an unregistered foreign MSB, so failing to register can effectively cut off your banking access in Canada. In short, FMSB registration is crucial for any overseas fintech/crypto firm that intends to serve the Canadian market, ensuring compliance and maintaining the ability to operate legally and access essential services.

MSB vs. FMSB: What’s the Difference?

Both domestic MSBs (Money Services Businesses) and FMSBs (Foreign Money Services Businesses) provide the same types of financial services (currency exchange, remittances, money orders, crypto exchange, etc.), and both must register with FINTRAC. The key difference lies in location and client targeting. A business is considered a domestic MSB if it offers those services and has a place of business in Canada – for example, it’s incorporated in Canada or has a physical presence, employees or agents in Canada. By contrast, a foreign MSB (FMSB) has no physical presence in Canada (not incorporated or located in Canada) but is still actively providing MSB services to clients in Canada. In other words, an FMSB is an overseas company serving Canadian customers. Aside from the location aspect, FMSBs are subject to all the same AML compliance obligations as Canadian MSBs once registered. One notable additional requirement for FMSBs is to appoint a Canadian representative (more on that below), reflecting the need for a local point of contact. But in terms of legal status, Canada treats a foreign crypto exchange or remittance provider targeting Canadians just like a domestic one – it must register and follow the rules. The MSB vs FMSB distinction simply clarifies whether the business is domestic or foreign; either way, serving Canadians with these financial services triggers the registration requirement.

The Legal Test: “Directing Services at Persons in Canada”

How do you know if your foreign business is considered to be “directing services at persons in Canada” (and thus caught by the FMSB rules)? FINTRAC and the PCMLTFA set out a practical test focusing on your marketing and service offerings:

Active Targeting of Canada – You are likely directing services at Canada if you advertise or market to Canadian audiences (for example, running ads in Canada or on Canadian websites). Operating a Canadian “.ca” website or being listed in Canadian business directories are also clear indicators. FINTRAC explains that “directing services” means your services are offered with a Canadian audience in mind – e.g. tailored promotions to Canadians, or outreach intended to attract Canadian customers.
Canadian-Friendly Features – Even beyond obvious advertising, regulators will look at whether you’ve made your service Canada-friendly. Offering prices in Canadian dollars (CAD) or supporting Canadian payment methods, providing customer support for Canadian time zones, or using Canadian partners/affiliates to promote your services are strong signs of directing at Canada. For instance, if you have another business in Canada acting as your agent or affiliate to sign up Canadian clients, that points to active targeting.

Conversely, if your business has no Canadian-specific features and does no targeted outreach, just a global website accessible from anywhere, it may be viewed as “passive” rather than directing at Canada. Simply having a few Canadian customers who found you on their own does not automatically make you an FMSB if you did nothing to pursue the Canadian market. In FINTRAC’s guidance, if none of the direct targeting criteria apply, a combination of other factors is considered to decide if you are directing at Canada. This means the absence of Canadian marketing or localization could weigh against being classified as an FMSB. Example: A UK-based fintech has a generic English-language website and never specifically markets to Canadians – a Canadian might stumble upon it, but the company doesn’t cater to Canada in currency or content. Such “passive” availability alone is generally not considered “directing services at persons in Canada” in the regulatory sense. However, the moment you start actively courting Canadian users – say by adding a *.ca domain or running a Canadian ad campaign – you cross into FMSB territory.

In summary, the legal test is about intent and outreach: if your foreign business intentionally targets or accommodates Canadian clients, you meet the “directing services” criterion. All the examples of “directing” – from using a .ca domain to advertising in Canadian media or working with Canadian affiliates – indicate a deliberate strategy to attract Canadian customers. On the other hand, merely having a service that Canadians could access without any tailored effort on your part is not, by itself, directing at Canada. Keep this test in mind when assessing your activities, because it’s a crucial factor in whether you need to register as an FMSB.

When FMSB Registration Is Required (Who Needs to Register)

If you meet the above criteria – i.e. you’re offering MSB services from abroad and have Canadian clients or are targeting Canada – then you are required to register as an FMSB before doing business in Canada. This rule captures a wide range of modern fintech and crypto businesses. Here are some concrete examples of who would need to register:

Crypto Trading Platforms – A cryptocurrency exchange based overseas (for instance, in Dubai or London) that allows Canadians to open accounts or even accepts Canadian dollar deposits must register as an FMSB. Crypto dealings (buying, selling, or transferring crypto for customers) are explicitly considered MSB activities in Canada, so a foreign crypto exchange with Canadian users qualifies as an FMSB.
Online Remittance or Payment Apps – A money transfer startup operating from the U.S. or Europe, which markets its app to Canadian users or enables sending money in/out of Canada, needs to register. FINTRAC gives an example of “Company A in Australia advertising its online money transfer service to people in Canada”, which clearly constitutes directing services at Canadians and thus requires registration. Similarly, a foreign remittance app or e-wallet that promotes its services in Canada (or partners with Canadian retailers/agents) would be an FMSB.
Foreign Exchange and FX Trading Services – An overseas forex broker or currency exchange website that offers CAD exchange rates, Canadian dollar accounts, or runs promotions to attract Canadian traders is caught by the FMSB rules. Offering foreign exchange dealing or money transfer services to the public is classic MSB activity, so if a UK or Hong Kong-based FX service has Canadian clientele (especially if it advertises to them or provides Canadian-specific options), it must register.
Other MSB Services – Any other business that falls under MSB services and has a foreign base with Canadian outreach must register. This includes issuing or redeeming money orders/travellers’ cheques, prepaid card issuers, certain crowdfunding platforms, or payment processors that handle transfers for Canadian customers. For example, a foreign payment processor that enables Canadian merchants to accept payments (acting as an intermediary in fund transfers) would likely need to register if it’s not already considered a domestic entity.

To put it plainly: registration is required whenever an entity outside Canada is “in the business” of providing these regulated services to people or entities “in Canada.” Even if your company is incorporated abroad and has no branch in Canada, you cannot ignore Canadian registration if you’re serving Canadians. The law was updated in 2019/2020 specifically to bring foreign operators (including crypto exchanges) under Canadian oversight, so regulators are very much watching for unregistered foreign MSBs. Before taking on that first Canadian client or launching a Canada-facing marketing campaign, ensure you have your FINTRAC registration in place.

Registration Process for FMSBs

Registering as a Foreign MSB involves several steps and documentation. The process is a bit more involved than for domestic MSBs because of the additional checks for foreign entities. Below is an overview of how to register an FMSB with FINTRAC:

Pre-registration Submission: Begin by completing FINTRAC’s online “Request to Register a Money Services Business or Foreign MSB” form. This is a preliminary form that notifies FINTRAC of your intent to register. After you submit the request, a FINTRAC compliance officer will contact you (typically by email) and provide the official registration form for your business to fill out.
Complete the MSB Registration Form: Fill out the detailed registration form with all required information about your business. This includes basic details (legal name, principal business address, etc.) and specifics such as:

Business activities: Identify which MSB services you offer (e.g. dealing in virtual currency, money transfer, FX trading).
Corporate details: Provide incorporation information (jurisdiction, date, etc. if you are a company) and the number of employees.
Ownership and management: List all owners and senior managers, with their names, dates of birth, and titles. You’ll need to disclose anyone who owns or controls 20% or more of the business (directly or indirectly).
Compliance officer: Designate a compliance officer and include their name and contact info. (Every MSB/FMSB must appoint an internal compliance officer responsible for AML compliance).
Canadian representative: Provide the name and contact details of your representative for service in Canada (a person residing in Canada who can accept official notices on the company’s behalf).
Expected business volumes: FINTRAC asks for an estimate of the expected annual transaction volumes (in dollars) for each service you plan to offer.

Physical locations (if any): If you have any physical locations or branches (even outside Canada), those need to be detailed. Often for an FMSB this may just be your head office address abroad.
Gather Supporting Documents: Along with the form, you must prepare and submit several documents to prove your business’s legitimacy and ownership structure:

Criminal Record Checks: You must obtain a recent police or criminal background check for key individuals in the business. This typically includes the CEO, president, directors, and any person owning ≥20% of the company. The check must be issued by a competent authority in each person’s country of residence, dated no more than 6 months before your application. If the document is not in English or French, you must provide a certified translation into English or French. (FINTRAC requires a statement from a certified translator attesting to the translation’s accuracy.)
Proof of Existence and Structure: You need to show that your business is legally formed and reveal its ownership structure. If your business is a corporation, this means providing your certificate of incorporation or equivalent business registration document (showing the company’s name, registered address, and directors) and a document outlining the ownership and control structure (for example, an organizational chart or a list of shareholders/ultimate beneficial owners). If your entity is not a corporation (e.g. a partnership or sole proprietorship), you’d provide the partnership agreement or other formation document plus a document describing ownership/control interests.

Other Information: FINTRAC may also require additional documentation like copies of identification for directors or the compliance officer, or AML policy documents, depending on the situation. However, the primary requirements are the criminal checks and the business formation/ownership documents noted above. It’s recommended to scan all these supporting documents into clear PDFs for submission.
Submit via Secure Channel: Once your form is filled and documents are ready, you will submit the package to FINTRAC electronically. For foreign MSB applications, FINTRAC uses a secure messaging system (Canada Post Connect) to exchange the registration form and documents. The FINTRAC officer will invite you to this secure channel where you can upload your completed application. After submission, the registration application enters FINTRAC’s review queue.
FINTRAC Review and Approval: FINTRAC will review your application and may reach out if any clarification or additional information is needed. If everything is in order, FINTRAC will approve the registration and issue you an MSB registration number, and your business will be listed on FINTRAC’s public MSB registry. You are required to wait for approval – you should not provide MSB services to Canadians until the registration is confirmed. Once approved, registration is valid for 2 years, after which you must renew it to remain in compliance (more on renewal in Common Mistakes section).

Throughout this process, be prepared for a bit of back-and-forth. It’s wise to double-check that all forms are complete and documents are clear, to avoid delays. Also, ensure that you have a Canadian address and representative ready as required – FINTRAC will not process a foreign MSB registration without a Canadian rep designated for service. In many cases, FMSBs work with local consultants or law firms (like MapleBiz) who can act as a representative or help arrange one. In sum, the registration process involves paperwork, identity checks, and demonstrating that your foreign business is set up to meet Canadian requirements. Starting the pre-registration early and having all documents prepared (including translated, if needed) will make the process smoother.

Extra Requirements and Challenges for Foreign MSBs

Operating as a foreign MSB in Canada comes with a few extra hurdles to keep in mind. Here are some special requirements and common challenges FMSBs face:

Longer Review Timelines: Foreign MSB registrations can take longer to be approved than domestic ones. While a straightforward Canadian MSB application might be processed in a matter of weeks, foreign applications undergo extra scrutiny. Initial review of your submission could take around 2–5 weeks if all is complete, but it’s not unusual for the overall process (including answering follow-up questions from FINTRAC) to stretch to a few months. Some industry advisors note that complex cases have taken several months (e.g. 4–6 months) to get the green light. The timeline partly depends on how complete your application is and FINTRAC’s workload, so build in extra time before you plan to launch in Canada.
Language and Translation: As mentioned, any official documents you submit that aren’t in English or French will need certified translation. This primarily applies to criminal record checks, but be prepared to translate other documents (like incorporation papers) if they’re in another language. Additionally, your communications with FINTRAC will be in English or French, and your compliance program materials (policies, training) should be in a language that FINTRAC staff can review (English/French). Ensure you have the language capability to correspond promptly – if needed, engage a translator or bilingual compliance consultant to help with the process.
KYC and AML Compliance Readiness: Registering as an MSB means you are committing to follow all of Canada’s anti-money laundering (AML) rules. FINTRAC expects foreign applicants to be just as prepared as local businesses when it comes to compliance. In practice, this means you should have an AML compliance program in place by the time you register. Key elements include appointing that compliance officer, having written AML policies and procedures, customer identification (Know Your Client) processes, record-keeping systems, and the ability to file required reports (such as suspicious transaction reports or large transaction reports) to FINTRAC. For example, after registration you’ll need to implement KYC identity verification for clients, monitor for suspicious activity, and keep detailed records just as a Canadian MSB would. FINTRAC can ask about your compliance program during the registration review or expect you to attest that it’s in place. Bottom line: Don’t treat registration as a checkbox – be ready to actually comply. Make sure your team is trained on Canadian requirements and that you can meet obligations like reporting large transactions or suspicious transactions to FINTRAC on an ongoing basis.
Local Presence Requirements: Although you don’t need a physical office in Canada, you do need to maintain a Canadian representative for service and address (for receiving any official mail). This can be a challenge if you have no prior ties to Canada. Many FMSBs fulfill this by contracting a local service provider or law firm (e.g. MapleBiz or similar firms) to act as their representative and provide a mailing address. Remember that the Canadian rep must be an individual resident in Canada (not just a P.O. box). Selecting a reliable representative is important, as they are the point of contact for FINTRAC inquiries or inspections. Also, note that being registered federally as an MSB does not exempt you from any provincial requirements that might apply. For instance, Quebec has a separate money-services business licensing regime – if you solicit clients in Quebec, you might need a provincial license in addition to FINTRAC registration. Ensure you check for any provincial licensing or extra local rules for your line of business.

In summary, foreign MSBs should budget additional time and resources to meet these extra requirements. The process may feel heavy, but it’s designed to ensure that an overseas business entering Canada’s market is fully compliant and accountable under Canadian law. With proper preparation – gathering documents early, setting up a compliance program, and getting local support – you can overcome these challenges and avoid unwelcome surprises during registration.

Common Mistakes to Avoid

When navigating FMSB registration and compliance, foreign businesses often stumble in similar ways. Here are some common mistakes and pitfalls to avoid:

Assuming “No Canadian Office = No Need to Register.” A critical mistake is thinking that not having a branch or office in Canada means you’re off the hook. In fact, if you’re providing MSB services to Canadians (even entirely online from abroad), you do need to register as an FMSB. Do not wait for a Canadian bank or regulator to flag it – determine early if you meet the FMSB criteria. Even if you hold a license in a Canadian province or another country, that does not replace federal FINTRAC registration.
Incomplete or Inaccurate Application Information. Many registration delays occur because the forms were submitted with missing details or errors. Examples include failing to list all trade names, providing outdated address information, or mistakes in owner/director details. FINTRAC will bounce back applications that are not fully and correctly filled. Double-check that every required field is completed – list all business names you use, all principal addresses, and ensure names and dates of birth for persons are accurate. An incomplete registration form or document package is a sure way to slow down approval.
Missing Key Documents or Steps. Foreign applicants sometimes overlook the extra document requirements. Common errors include not obtaining all the required criminal record checks (or not translating them if needed), forgetting to include the ownership structure chart, or neglecting to designate a Canadian representative before submitting. These are mandatory – FINTRAC will not proceed without the police checks and the rep for service in Canada. Make a checklist of the required attachments and tick them off before you send in your application.
No AML Compliance Program in Place. Some businesses rush to get registered and assume they can figure out compliance later. This is risky. FINTRAC can ask about your compliance arrangements even at the registration stage, and certainly you’re expected to have them once you start operations. Not having an AML program (policies, procedures, training, etc.) or failing to appoint a compliance officer can lead to penalties or even your registration being revoked. To avoid this mistake, have at least a basic compliance framework ready: know your reporting obligations, set up KYC processes, and document your AML policies before you go live.
Failing to Update or Renew Registration. Getting your MSB registration is not a one-and-done deal. You must renew the registration every two years to remain in good standing. Additionally, if any of your registration information changes (address, ownership, new business lines, change of compliance officer, etc.), you are required to update FINTRAC (usually within 30 days of the change). A common mistake is letting the registration lapse or not informing FINTRAC of changes, which can lead to an “Expired” status or compliance violations. Mark your calendar for the renewal deadline and keep information up to date. FINTRAC’s MSB registry is public, and banks will check that your status is active – you don’t want to appear as expired or non-compliant due to an oversight.

Avoiding these pitfalls comes down to thoroughness and staying informed. Treat the registration process with care, ensure all bases are covered, and maintain a proactive compliance mindset afterward. If in doubt, consult experts or legal advisors to review your application and compliance program before submission – a bit of due diligence can save a lot of headache.

Checklist: Do You Need FMSB Registration?

Not sure whether your business needs to register as a Foreign MSB in Canada? Use this quick checklist. If you answer “Yes” to all of the following questions, then you likely must register with FINTRAC as an FMSB:

Do you offer any of the services defined as MSB activities in Canada? (This includes foreign exchange dealing, money transfer/remittance services, issuing or redeeming money orders/travelers’ cheques, dealing in virtual currencies or operating a crypto exchange, payment processing for transfers, etc.)
Are you operating from outside Canada? (Your business is incorporated or based in another country, with no physical place of business in Canada – no Canadian offices or branches).
Do you have clients in Canada or actively target customers in Canada? (For example, you advertise in Canada, support Canadian dollar transactions, have a “.ca” website, or otherwise market your services to Canadians).
Are the services you provide to Canadian clients more than just incidental? (In other words, you knowingly conduct business with Canadians as a part of your customer base, not just as one-off or accidental transactions).

If all four points apply, then your business meets the definition of a foreign money services business. You are required to register with FINTRAC before offering those services in Canada. If you are missing one of the above elements (for instance, you have Canadian clients but truly did zero marketing or targeting toward Canada), you may need a closer analysis – but err on the side of caution. Generally, any overseas fintech/crypto firm that regularly serves Canadians should be registered. When in doubt, consult with a compliance expert or FINTRAC’s guidance to confirm your status.

Expanding your fintech or crypto services into Canada can be a lucrative opportunity, but it comes with critical compliance responsibilities. Canadian regulators have made it clear that foreign MSBs must play by the same rules as domestic ones. Ignoring the FMSB registration requirement is not worth the risk – it can lead to legal penalties, public enforcement action, and loss of access to banking in Canada. On the other hand, achieving proper registration and compliance builds credibility. It signals to Canadian banks, partners, and customers that your business is trustworthy and meets Canadian standards.

Getting it right can be complex, especially if you’re navigating foreign laws and Canadian rules at the same time. This is where expert help is invaluable. MapleBiz specializes in cross-border compliance and helping international businesses enter the Canadian market smoothly. From determining if you need to register, to preparing the FINTRAC application, acting as your Canadian representative, and setting up your AML policies, our team can guide you through every step of the FMSB registration process and beyond. We’ve helped numerous fintech and crypto companies ensure they meet Canadian requirements while focusing on their core business.

If you think your company might need FMSB registration, don’t wait – contact MapleBiz for a consultation. We’ll assess your situation, help you compile the necessary documents, and liaise with FINTRAC on your behalf to make the process as efficient as possible. Beyond registration, we assist with ongoing compliance, so you remain in good standing year after year.

Entering a new regulatory environment can be daunting, but with the right support, you can turn compliance from a hurdle into a stepping stone for growth. MapleBiz is here to help your fintech/crypto business confidently expand into Canada, fully compliant and ready for success. Reach out to us today to ensure your Canadian venture starts off on the right foot – with peace of mind and a solid compliance foundation.