Obtaining Licenses for Crypto and Fintech Companies in Hong Kong
Hong Kong is one of the most attractive global centers for the development of crypto and fintech businesses. It combines political stability, favorable tax legislation, strategic location in Asia, and a transparent regulatory environment. Companies such as Crypto.com, HashKey, The Sandbox, OKX, Animoca Brands, and dozens of other international crypto and fintech platforms are registered in Hong Kong.
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Why are companies increasingly choosing Hong Kong to develop crypto and fintech businesses?
Clear and modern regulation
Hong Kong's legal system is highly regarded internationally for its transparency and efficient enforcement, providing companies with confidence and protection.
The main regulator, the Hong Kong Securities and Futures Commission (SFC), provides clear guidelines for companies in the virtual asset sector.
Support from the state
In 2023, the government launched a Web3 and Digital Assets Working Group to develop the sector.
Innovative ecosystem
Hong Kong has a vibrant innovation ecosystem, with incubators, accelerators and research centres supporting startups and their development. This environment is conducive to the introduction of new technologies and business models.
Favorable tax policy
Competitive tax rates and a well-thought-out tax system provide financial advantages to companies that focus on a lean business model. Hong Kong's tax policy is aimed at stimulating investment and innovation.
Bilingual Jurisdiction in Asia
English and Chinese are the official languages in Hong Kong, making it easier for businesses to navigate legal and regulatory requirements and conduct their operations. All laws and regulations are available in both languages.
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Who is Hong Kong suitable for?
Unlike Singapore, which is heavily regulated, and mainland China, where administrative barriers can be a major obstacle to overseas business, Hong Kong offers a unique combination of flexibility, transparency and legal stability. Hong Kong is a harmonious blend of Eastern and Western business practices.
Regulatory authorities and their competencies
“In the context of multi-layered regulation of the cryptocurrency and fintech industry, key functions are clearly distributed between three main bodies: the SFC, the HKMA and the Insurance Authority. This approach allows us to cover both traditional financial instruments and innovative digital assets, providing businesses with a high level of legal certainty and legal protection." Alina Davletshina. Head of Digital Practice
Securities and Futures Commission (SFC)
The main regulator authorized to license and supervise activities related to securities and virtual assets.
Hong Kong Monetary Authority (HKMA)
Supervises the banking sector and payment systems.
Insurance Authority
Regulates insurance and fintech companies operating in related industries.
Types of licenses and regulatory regimes
Virtual Asset Service Provider (VASP) License from SFC
- Applicable to companies providing services with virtual assets that are not securities (e.g. utility tokens).
- Requirements for compliance with AML/CTF procedures, including:
- implementation of customer identification systems (KYC),
- transaction monitoring,
- appointment of persons responsible for compliance and internal control
- AMLO Regulation - Anti-Money Laundering and Combating Terrorist Financing Act
License Type 1 – Securities Trading
- Applicable to companies whose activities are related to virtual assets recognized as securities (security tokens).
- SFO Regulation - Securities and Futures Act
License Type 7 – Provision of automated trading services
“From June 1, 2023, crypto companies providing services with virtual assets (not security tokens) are required to obtain a VASP (Virtual Asset Service Provider) license. The SFC recommends that companies obtain licenses under both the AMLO and SFO regimes to avoid disruptions to operations when reclassifying tokens." Valeria Gziryan. Юрист
Activities subject to licensing
Crypto and fintech companies are required to obtain licenses when carrying out the following operations:
- asset management in virtual assets
- servicing centralized trading platforms
- digital asset storage (custody services)
- investment consulting regarding virtual assets
- conducting ICO/IEO
- Providing algorithmic trading systems and automated solutions
“Moreover, the regulation applies not only to legal entities registered in Hong Kong, but also to companies providing services to Hong Kong citizens and residents abroad." Alexey Kononov. Юрист
The process of obtaining a license
Obtaining a license to operate a crypto or fintech business in Hong Kong involves several key steps.
Stage 1
Consultations
We offer expert advice to help you navigate the legal and regulatory landscape of the Hong Kong virtual asset market.
Stage 2
Analysis of the business model and applicable regulatory regime
We analyze your business model, determine the legal nature of the tokens (security / utility) and assess the applicable regulatory regime. It is also important to conduct a risk assessment to ensure that future activities comply with regulatory requirements.
Stage 3
Preparation of documents
Our team helps to collect and prepare all the necessary documentation to obtain a license in Hong Kong, including:
- Business plan, description of technical infrastructure.
- AML/CTF policies, risk management mechanisms.
- Information on the ownership structure and key persons.
Stage 4
Submission of application and documents
The application is submitted to the Securities and Futures Commission (SFC) along with a full set of supporting documents and payment of the required fees. The application must contain a detailed description of the operating activities, risk management policies and cyber security measures.
Stage 5
Initial review
The SFC reviews the application for completeness and may request additional information or clarification.
We manage interactions with regulators, ensuring seamless communication and compliance with all regulatory requirements.
Stage 6
Due Diligence
A comprehensive check of the company and key persons is carried out, including compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) legislation.
Stage 7
Registration and issuance of a license
If the decision is positive, the regulator enters the company into the public register of VASP or SFO and issues the corresponding license.
Typically, the licensing procedure takes from 4 to 6 months from the date of submission of the full package of documents. The duration may vary depending on:
- the complexity of the corporate structure of the applicant company,
- participation of foreign beneficiaries,
- volume of clarifications from the regulator.
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Why do more than 100 clients contact us every year?
Full support
From collecting documents and visiting government agencies to obtaining a resident visa for founders and employees
Exactly according to the client's task
We open a company in a suitable jurisdiction and with the required form of registration, minimizing risks
We continue to help businesses
We not only open a company, but also provide expert legal, tax and accounting support for business
Team of experts
The team consists of 150+ experts who have successfully implemented more than 1000 projects in the UAE, USA, EU, Asia, other countries and regions.
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Our other services in UAE
Company Registration in Hong Kong
Company Registration in Hong Kong
Support for crypto and fintech companies in Hong Kong
Support for crypto and fintech companies in Hong Kong
About Versus
Versus is a leading consulting group providing legal and accounting services in key foreign markets.
Over the years of working in the UAE and other MENA countries, we have acquired a deep knowledge of local legislation, which, combined with knowledge of international standards, allows us to offer solutions tailored to the unique needs of each client.
20+
Experts in offices in Dubai and Abu Dhabi
250+
Successfully completed projects on the law of the UAE and other countries of the MENA region
