In the industry of monetary services in Hong Kong, there has been exceptional growth in recent years thanks to which Hong Kong has now become the most center on the Asian continent. But in Hong Kong, an agent requires a legitimate business license for the financial services conducted within the country.
These financial business activities consist of asset management, providing automated trading services, securities margin financing, advising on corporate futures, securities, and finance, leveraged exchange trading, futures dealing, and securities dealing. Here Future Perfect Global has shared all the crucial information on obtaining the financial service business license in Hong Kong.
There are different categories of financial services, and the license for the financial services depends entirely on the sort of service that you simply try to get. the kinds of services and the permits related to them are explained briefly below:
A person can choose the precise services that they need to supply in Hong Kong and apply for that specific financial service business license in Hong Kong with the concerned department as mentioned above.
In the new era where everything has become digital, and therefore the world is evolving to become a far better and easier place to live in, Hong Kong has made it easier for those who want to start out a business. And since the required funds are all that somebody needs, the financial industry dominates the Hong Kong market. Hong Kong is additionally a perfect getaway for any international firm endeavoring a path to the Mainland, and even for Mainland enterprises going global.
Famous for the free flow of capital and knowledge, an efficient regulatory regime and advanced financial infrastructure, Hong Kong has always been attracting an expensive pool of monetary expertise and professional talent. Also, Hong Kong features a trusted system, low taxations, and a business-friendly environment that supports its position because of the significant insurance, banking, capital formation, and asset management hub within the world.
In fact, Hong Kong was at the highest of the annual Financial Development Report of the planet Economic Forum that came to the call in October 2012, beating the highest countries just like the UK and the US. And it's been at the highest repeatedly thanks to the high scores within the non-banking financial services like insurance and IPO activity.
Not only is Hong Kong at the highest for the non-banking financial services but also for the banking services within the world, which is why many professionals want to open up businesses in Hong Kong after obtaining a business license for financial services for the corporate.
To obtain the financial service business license in Hong Kong, you'd got to have some specific services that your business would offer. As per the Securities and Futures Commission (SFC), the subsequent services are noted as the regulated activities within the Securities and Futures Ordinance (SFO) of Hong Kong:
If there's any firm that also includes the authorized financial organization which intends to run a business with any of the services mentioned above has got to apply for a business license for the financial services.
This rule is that the same where even an individual who wants to render this service on behalf of any licensed corporation would need to file for the representative’s license in Hong Kong. A benefit about this is often that a licensed representative has the proper to be accredited to one corporation that has the license for the services in Hong Kong.
In addition, a licensed representative doesn’t just need a license to figure for the licensed corporation. That person would also get to be approved as a “responsible officer” for that corporation in order that they will perform the regulated activities.
Details on Temporary Licensing for Financial Services
Any foreign firm or person operating a business outside Hong Kong with an equivalent nature of monetary services can apply for the temporary license to urge permission of operating an equivalent service in Hong Kong also. Also for a corporation rendering financial services, a partnership or sole proprietorship isn't an enjoyable sort of business structure for getting a financial service business license in Hong Kong.
Nonetheless, some specific regulated activities can't be done by the one that features a temporary license like asset management services, securities margin financing, providing automated trading services, and leveraged exchange trading.
Additionally, the person also cannot hold any client’s assets when under the temporary license which is merely granted for 3 months or not for quite six months in total within a twenty-four month period. So, it's better to use the business license for the financial services in Hong Kong to urge the permanent license for those that need lifetime earnings from this business.
For the financial service business license in Hong Kong, the subsequent exemptions are applicable:
Those financial institutions that are authorized don't require registration for providing the services associated with the leveraged foreign exchange trading.
Trust companies, lawyers, and accountants that render services where they provide advice on finance, asset management, futures contracts, or securities, are immune from the licensing requirement. it's only applicable if the recommendation given is said to the person’s professional practice.
Additionally, the exemption is additionally for broadcasters and journalists who provide investment advice to people via television/radio broadcasts or publications.
A person is immune from the need of the business license for the financial services as long as they're rendering the investment advisory services to a different wholly owned subsidiaries of the company, or the company that holds all their issued shares, or their entirely owned subsidiaries.
As per the requirement mentioned in Schedule I of the SFO, an individual doesn't need the financial service business license in Hong Kong for futures or securities dealing activity if they're working as a principal and affect professional investors only.
In case you're an organization or an individual who features a license for dealing in securities, there's no need for a separate license for performing securities margin financing activities for the clients who come to you.
Additionally, authorized financial institutions who won't be registered to conduct the operations for dealing in securities, don't get to register for providing the services of securities margin financing.
For those that have already got a license for one quite financial service, there isn’t needing to register again for performing the activities that are associated with it. As an example, a stockbroker licensed to deal in securities features a business of investment advisory services, there's no “advising on securities” or “advising on finance ” license requirement for offering any securities or corporate finance advice to the clients.
There are a “fit and proper” criteria that have been set by the SFC which the applicant has to satisfy, where the person’s fitness and property would be examined. an equivalent thing takes place for the corporation or institution where all the members of the firm or organization and their property are examined. the subsequent would be considered while an examination is completed by the SFC:
The candidate has to satisfy the SFC Compliance Guidelines and exhibit that they need stable and secure internal compliance systems to get the business license for financial services. Regarding this, it must be ensured that the corporate features a good control system, qualified personnel to handle the business efficiently, and a correct business structure.
The company that applies for the financial service business license in Hong Kong has got to be an organization incorporated in Hong Kong or a far off company that has been registered with the Hong Kong’s Companies Registry. Also, the corporation has got to employ two officers that are liable for the regulated activity that the corporate is endeavoring to be licensed.
The same person is often employed in addition to one corporation proven that the person is “fit and proper” and there aren’t any conflicts within the roles. a minimum of one among the people employed also has got to be the company’s executive, and both of them must have a representative’s license for the services they provide. The proposed officers’ appropriate experience, knowledge, skills, ability to efficiently supervise and manage the corporation’s business of the classified activities.
As per the Securities and Futures Rules for the Financial Resources, the candidate has to have a minimum paid-up liquid capital, and share capital counting on the type of regulated activity. just in case of the many regulated activities, the very best value required amongst the several regulated pursuits that are being applied for.
After deciding to use the financial service business license in Hong Kong, and completing all the wants and applications also, the appliance and therefore the non-refundable fee has got to be submitted face to face or through a post to the SFC.
The successful applicant would get processed during a maximum of two to four months where a written notification of the approval issued by the SFC or the certificate of registration would be sent to the candidate after approval. Additionally, submissions that are incorrect or incomplete would delay the general processing.
The indications on the license or certificate of registration are:
The license has got to get on exhibit within the premises of the office whenever, and for one business, a licensed copy of the license has to be displayed in each office. Each registered or licensed corporation, authorized financial institutions, and individuals need to pay the annual fees for the financial service business license in Hong Kong. This could be done exactly one month after the anniversary date of the registration or license.
If the appliance has failed to follow the terms, it might be rejected, but SFC would offer you an opportunity to elucidate things. And if after this, it's denied again, the filing of an appeal is often made within 21 days of presenting the shape to the Securities and Futures Appeals Tribunal. This process can take many weeks.
To apply for a financial service business license in Hong Kong is simple. Make certain to be prepared and well knowledged within the processes and documentation needed for obtaining the business license for your financial services. With this information in hand, you're already on your thanks to starting your business within the financial field.