# Money Service Operator (neobank) License in Hong Kong > Money Service Operator (neobank) license in Hong Kong from C&ED for money remittance and currency exchange. Requirements, substance, and suitability for payment businesses. Author: Гордей Болотько — партнёр, Corporate & Commercial (https://wiki.private.law/authors/bolotko) Last modified: 2026-07-19T07:41:00.000Z Canonical: https://wiki.private.law/en/neobank-hk Topics: structures, banking Jurisdictions: hong-kong Product tags: neobank Semantic tags: neobank, neobank --- ## Concept neobank (Money Service Operator) is a license issued by Hong Kong's Customs and Excise Department (C&ED) to companies providing money remittance and currency exchange services without bank status. It is a working alternative to a banking license for fintech companies, OTC exchanges, payment processors, and cross-border remittance services. neobank permits operations with fiat and virtual assets subject to AML/CFT compliance. Regulated by AMLO — Anti-Money Laundering and Counter-Terrorist Financing Ordinance, Cap. 615 of the Laws of Hong Kong (the "(Financial Institutions)" qualifier was dropped from the ordinance's title on 1 March 2018). The license is issued for 2 years with mandatory renewal. The neobank license is issued with two restrictions: the company may not accept deposits like a bank and cannot issue its own financial products. Within these boundaries lies flexible infrastructure: you can hold client funds in segregated accounts, issue cards through a partner issuer, conduct SWIFT operations, and exchange cryptocurrency. > 🍓 Processing time — **6–10 months** from application submission to C&ED. The law does not require share capital, but the regulator will verify "sufficient resources" for operational activities. ## When neobank Is Needed > 🔗 **Related** > [OTC](https://wiki.private.law/en/otc) · [HK Ltd](https://wiki.private.law/en/hong-kong) - **Cross-border money remittance** as a business model (not for own operations) - **Cryptocurrency exchange** or OTC-desk with a public interface - **Payment processing** for e-commerce, marketplaces, SaaS - **Multi-currency wallet** for retail or B2B clients If activities are limited to intra-group settlements or own operations — neobank is not required. A standard HK Ltd with a bank account is sufficient. > 🍓 Operating without neobank where it is required is a criminal offense. Under AMLO: up to **HK$1,000,000 fine + 2 years imprisonment** (indictment) or HK$100,000 + 6 months (summary). ## What neobank Allows You to Do - Open sub-accounts for clients - Conduct international transfers (including SWIFT, SEPA, FPS) - Perform currency conversion - Integrate SaaS payment solutions and APIs - Work with crypto-fiat gateways ## Structural Requirements - **HK Ltd registration** — standard, not offshore. C&ED effectively views the company as a Hong Kong resident. - **Physical office in Hong Kong** — virtual office is not acceptable; a real premises with a registration agreement is required. C&ED conducts on-site inspection. - **AML Officer with relevant experience** — **becomes a director** of the neobank company. Must pass the neobank exam. - **AML/KYC/CTF policies and procedures** — detailed Policy Manual tailored to business specifics. C&ED evaluates according to MSSB content guidelines. - **Client compliance system** — KYC onboarding, transaction monitoring, sanctions screening. - **Fit-and-proper assessment** — for all directors, partners, ultimate beneficial owners, and key personnel. C&ED evaluates: integrity, financial soundness, criminal history, regulatory record (Article 30 AMLO). ## Taxation All neobanks are on the general tax system and, due to having a real office, most often pay taxes as Hong Kong residents. | Type of Income | Rate | | --- | --- | | Profit outside Hong Kong | 0% | | Profit in Hong Kong (up to HKD 2 million) | 8.25% | | Profit over HKD 2 million | 16.5% | | Dividend tax | 0% | | VAT | 0% | ## Reporting and Audit In addition to standard audit and accounting reporting, compliance reporting is maintained for the regulator (C&ED): - **Annual Report** - **Suspicious Transactions Report (STR)** — on suspicious transactions - **Transaction Monitoring Report (TMR)** — on monitoring results > 🍓 Compliance reporting is prepared by the AML Officer and is included in their compensation. ### Audit Rates | Annual Turnover | Number of Transactions | Audit Cost | | --- | --- | --- | | Up to $120K | Up to 100 | $2,900 | | Up to $120K | 100–200 | $3,700 | | Up to $500K | Up to 100 | $4,200 | | Up to $500K | 100–200 | $4,800 | | Up to $1M | Up to 100 | $6,500 | | Over $1M | Over 200 | By agreement | > 📌 Bookkeeping ≈ **$1,250 per month** (upon request). ## Stages and Timeline Full cycle from start to license receipt — **6–10 months**. We can handle each stage separately or assemble a complete package. | # | Stage | Content | Timeline | Cost | | --- | --- | --- | --- | --- | | 1 | **Corporate structure** | HK Ltd incorporation · Office lease · AML Officer appointment (director) · Corporate secretary appointment | 1 month | **€50,000** | | 2 | **License preparation** | Development and implementation of AML/CTF policies · KYC/compliance system integration · neobank exam completion (AML Officer) · Full documentation package assembly for submission | 1–2 months | **€75,000** | | 3 | **C&ED application submission** | Application submission · Regulator communication, responding to queries · Document supplementation | 6–10 months | **€25,000** | | 4 | **Bank account opening** | Applications to two financial institutions · Compliance process support · Virtual sub-account integration | 1–2 months | **€50,000** | | 5 | **Payment infrastructure integration** (optional) | SaaS/API interface integration · Crypto-fiat gateway integration · SWIFT/SEPA/FPS provider integration | 1–3 months | **≈ €50,000** | > 💰 **Total: €250,000 for 4 basic stages** — includes all expenses and company support for 12 months. ## Documents Required from Client to Start - Shareholder's passport - Shareholder's utility bill or bank statement - Shareholder's CV ## Maintenance The license is valid for 2 years, renewal is mandatory. Ongoing expenses: | Item | Cost | | --- | --- | | neobank license renewal | €20,000 every 2 years | | Real office in Hong Kong | €20,000/year | | Director (AML Officer) | €30,000/year | | Audit | €3,000–10,000/year | | Bookkeeper | €15,000/year | | Payment interfaces (external providers) | €5,000–10,000/month | > 🍓 If AML Officer + office are included in our full package — license renewal and compliance reporting are maintained continuously, with no separate charges. ## What neobank Does Not Permit > 🔗 **Related** > [neobank](https://wiki.private.law/en/neobank-hk) - **Deposit-taking activities** — accepting money with an obligation to return it with interest. This requires a banking license (HKMA). - **Issuance of own financial products** — bonds, shares, derivatives. Requires SFC. - **Asset management** for third-party clients on a discretionary basis. Requires SFC Type 9. - **Securities brokerage** — requires SFC Type 1, 2, 3 depending on the instrument. - **Stored Value Facility** — issuing own cards/wallets, direct storage of client funds as electronic money. Requires neobank. If the business requires a combination of neobank with another license — we prepare parallel applications. ## Q/A ### Registration and Licensing ### **How long does it take to obtain neobank in Hong Kong?** Full cycle — 6–10 months from corporate structure setup to license receipt. The C&ED submission stage — typically 3–5 months on the regulator's side, the rest is document preparation on our side and the client's side. ### **What is the minimum capital required?** The law does not require a formal minimum share capital. In practice, C&ED will request confirmation of "sufficient resources" for operational activities — this is documented through the company's financing structure and confirmation of funds in accounts. ### **Is a physical office required?** Yes. Virtual office is not acceptable — a real premises with a registration agreement is required. C&ED conducts on-site inspection at the office during the application review stage. Our package includes a real office in Hong Kong. ### **What is the fit-and-proper test?** A verification procedure for all directors, partners, ultimate beneficial owners, and key personnel under Article 30 AMLO. Evaluated: integrity, financial soundness, absence of criminal history, absence of negative regulatory history. Based on C&ED guidelines. ### Activities ### **Can I obtain neobank for a cryptocurrency exchange?** Yes — for money changing and crypto-fiat settlement, such as OTC desks; this is one of the most common uses of the license. A centralized virtual asset exchange with a public order book falls outside neobank and requires a separate [VASP license](https://wiki.private.law/en/hong-kong-hub) from the SFC, a regime in force since 1 June 2023. ### **Can neobank be used for cross-border transfers to and from Russia?** Legally — yes, neobank permits international transfers. Sanctions compliance is verified separately: each transfer goes through sanctions screening, and transactions with sanctioned persons are impossible. Hong Kong has not joined US/EU sanctions, but correspondent banks may apply their own restrictions. ### **What can't you do with neobank?** Accept deposits with interest (HKMA banking license), issue own financial products or electronic money (SFC / neobank), broker securities (SFC Types 1/2/3), manage third-party assets on a discretionary basis (SFC Type 9). ### Maintenance ### **For what term is the license issued?** 2 years. Renewal is mandatory before expiration. Our renewal cost is €20,000. ### **What reporting does neobank maintain?** In addition to standard audit reporting — three compliance reports for C&ED: Annual Report, Suspicious Transactions Report (STR) on suspicious transactions, and Transaction Monitoring Report (TMR) on monitoring results. This reporting is maintained by the AML Officer. ### **What are the consequences of operating without a license?** Under AMLO — criminal liability: up to HK$1,000,000 fine and 2 years imprisonment on indictment, or HK$100,000 and 6 months on summary conviction. ## Sources - [C&ED — Money Service Operators](https://www.customs.gov.hk/en/service-enforcement-information/anti-money-laundering/neobank/index.html) - [AMLO (Cap. 615) — Hong Kong e-Legislation](https://www.elegislation.gov.hk/hk/cap615) ## Related pages > 🔗 **Related** > [Hong Kong company](https://wiki.private.law/en/hong-kong) · [Hong Kong hub](https://wiki.private.law/en/hong-kong-hub) · [Financial licenses map](https://wiki.private.law/en/fintech-license-map) · [neobank license](https://wiki.private.law/en/neobank-hk) 📎 Need the full picture? Request our HK licence map (neobank, neobank, SFC) via the form below — we email it the same day. --- ## FAQ ### How long does it take to obtain neobank in Hong Kong? Full cycle — 6–10 months from corporate structure setup to license receipt. The C&ED submission stage — typically 3–5 months on the regulator's side, the rest is document preparation on our side and the client's side. ### What is the minimum capital required? The law does not require a formal minimum share capital. In practice, C&ED will request confirmation of "sufficient resources" for operational activities — this is documented through the company's financing structure and confirmation of funds in accounts. ### Is a physical office required? Yes. Virtual office is not acceptable — a real premises with a registration agreement is required. C&ED conducts on-site inspection at the office during the application review stage. Our package includes a real office in Hong Kong. ### What is the fit-and-proper test? A verification procedure for all directors, partners, ultimate beneficial owners, and key personnel under Article 30 AMLO. Evaluated: integrity, financial soundness, absence of criminal history, absence of negative regulatory history. Based on C&ED guidelines. Activities ### Can I obtain neobank for a cryptocurrency exchange? Yes — for money changing and crypto-fiat settlement, such as OTC desks; this is one of the most common uses of the license. A centralized virtual asset exchange with a public order book falls outside neobank and requires a separate VASP license from the SFC, a regime in force since 1 June 2023. ### Can neobank be used for cross-border transfers to and from Russia? Legally — yes, neobank permits international transfers. Sanctions compliance is verified separately: each transfer goes through sanctions screening, and transactions with sanctioned persons are impossible. Hong Kong has not joined US/EU sanctions, but correspondent banks may apply their own restrictions. ### What can't you do with neobank? Accept deposits with interest (HKMA banking license), issue own financial products or electronic money (SFC / neobank), broker securities (SFC Types 1/2/3), manage third-party assets on a discretionary basis (SFC Type 9). Maintenance ### For what term is the license issued? 2 years. Renewal is mandatory before expiration. Our renewal cost is €20,000. ### What reporting does neobank maintain? In addition to standard audit reporting — three compliance reports for C&ED: Annual Report, Suspicious Transactions Report (STR) on suspicious transactions, and Transaction Monitoring Report (TMR) on monitoring results. This reporting is maintained by the AML Officer. ### What are the consequences of operating without a license? Under AMLO — criminal liability: up to HK$1,000,000 fine and 2 years imprisonment on indictment, or HK$100,000 and 6 months on summary conviction. --- ## Factual claims - Full cycle from start to license receipt — 6–10 months. - The license is valid for 2 years, renewal is mandatory.