In last blog post, we discussed about the mandatory requirement of Know Your Customer (KYC), which all trust and company secretary service providers are required to follow. In this article, we will talk about TCSP License.
When was the licensing requirement launched?
To allow government regulates and monitors these providers, with effective from the 1st March, 2018, any services provider wishes to engage to relevant business, the company is required to apply for a TCSP license and comply with the relevant requirements of the AMLO [Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap.615]
This is the license of CatcherBiz, granted on 8 May, 2018:-
Why you need a TCSP license to setup and maintain your company?
In the past, because there are too many companies being setup in Hong Kong, there might be difficulties for the Registrar to check all the companies record and to ensure the company’s record are keeping in good order. But since the launch of the licensing requirement, many of the licenses (registered agent) received letter from the Companies Registry requesting on site inspection of records(1), such that during the inspection, not just one specific company to be inspected, but all other companies maintained under the same agent would be selected and inspected by random check. So, it is important for the licenses comply with ongoing obligations of a TCSP licensee, including the statutory requirements relating to customer due diligence and record-keeping.
Consequent of failure to fulfill with law requirement
Failure to comply with the law, the agent will be disqualified by Companies Registry, where the company being inspected will be prosecuted as well, highlights of prosecution cases can be search on website of Companies Registry(2).
Further that, upon the agent being disqualified, it will be forced to resign as Company Secretary and to cease the Registered Office address of its other customers as well, which the consequence is disastrous. The agent of “SBC CORPORATE SERVICES LIMITED”, convicted in 2015 because of failure to display continuously the company name at the registered office, and as at today, 14 October, 2018, although is a live company, unable to obtain the TCSP license for at this moment.
Such that, even the structure of your company is very simple and straight forward, such as same person to act as the Sole Director and Sole Shareholder, as soon as your agent is not reliable and unable perform the KYC check due diligently, you are already exposed to very high risk, and therefore, we highly recommend you to setup your company with a reliable registered agent.
How I can assure that the agent has obtained license?
Other than asking your agent to show you the TCSP license, you can also check whether the agent has obtained the license by search it from the government website(3).
In case your current agent still pending to obtain the license or has never asked you to provide KYC materials on Significant Controllers or even worse, never receive the RoM (Register of Members) and RoD (Register of Directors), then, you may have to reconsider your business relationship with the agent as a long run.
For further reading, we posted a blog earlier on how to choose a reliable agent:
Any additional information you would like to know, please feel free to drop us an email:- email@example.com. In addition, we dig out below materials in case you need a little more insights.
Documents and Record to be inspected
Highlights of prosecution cases