Canada is a pro-fintech market with a stable regulatory environment – but it requires certain licenses and registrations before you can launch payment or crypto services. For fintech startups, the most common requirement is registering as a Money Services Business (MSB) with FINTRAC, Canada’s financial intelligence unit. In this guide we’ll explain what that means, who needs to register, and how the process works. We’ll also cover related requirements (like crypto services), timeline and cost expectations, common pitfalls, and how 7BaaS’s licensing and consulting services can help.

What Is an MSB License?

In Canada, there is no separate “EMI license” or “digital wallet license” as in Europe – instead, fintechs offering payments or electronic money services must register as an MSB under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. An MSB registration with FINTRAC is essentially the required regulatory clearance for businesses doing things like foreign exchange, fund transfers, issuing money orders, or virtual currency services. For example, FINTRAC explicitly lists services such as currency exchange, remitting/transferring funds, money order issuance, and dealing in virtual currencies (crypto) as MSB activities.

Obtaining MSB registration gives your startup legal compliance status and helps guard against financial crime.

In short, if your fintech moves money or crypto for others, you need FINTRAC registration – there is no separate “licence number” beyond that registration.

Start building a compliant fintech from day one with the right setup.

7BaaS can guide you through every step, from company formation to MSB registration.

Who Needs an MSB Registration?

Any Canadian or foreign fintech that provides MSB services to Canadians must register. This includes:

• Remittance and Money Transfer Platforms: Businesses that send money domestically or internationally on behalf of customers.

• Foreign Exchange Services: Currency exchange businesses or forex platforms.

• Digital Wallets and Payment Apps: Companies that hold, send or receive money for clients.

• Cryptocurrency Exchanges/Dealers: Any platform or service that buys/sells/transfers crypto or other virtual currencies.

• Other MSB Services: Issuing or redeeming money orders, traveller’s cheques, or similar instruments.

In practice, any startup that advertises or provides these services in Canada (or to customers in Canada) is legally required to register with FINTRAC before starting operations. This applies equally to a Canadian-incorporated MSB or a foreign company directing services at Canadians (called a Foreign MSB, or FMSB). Notably, provincial licenses alone do not exempt you – even if you have a provincial money-service license, you still must register federally with FINTRAC .Failing to register in time is a common and costly mistake.

The Licensing Process in Canada

Getting licensed (registered) in Canada typically involves a few key steps:

1. Incorporate Your Company in Canada. Before applying to FINTRAC, you must have a Canadian legal entity. Choose a jurisdiction (federal or a specific province) and incorporate your fintech. (For help setting up the right corporate structure, see 7BaaS’s Company Formation Services.) Incorporation is relatively fast (often 1–2 weeks) and inexpensive (roughly CAD 200–300 in government fees). You’ll need a Business Number and registered address for your MSB application.

2. Develop a Robust AML/CTF Compliance Program. FINTRAC requires all MSBs to implement a comprehensive anti-money laundering (AML) and counter-terrorist financing (CTF) program before registering elements include:

   • Written Policies & Procedures: Documented AML/KYC rules for customer onboarding, transaction monitoring, and record-keeping.

   • Risk Assessment: A formal analysis of your money-laundering and terrorist-financing risks, tailored to your services and customers.

   • Training Program: Staff training so employees understand compliance duties.

   • Independent Review: Periodic audits/reviews of your program by an independent party to ensure it’s effective.

   • Compliance Officer: Appoint a qualified person (often called a MLRO) to oversee the program.

   You can see why having expert help is valuable – 7BaaS offers Compliance & Regulatory Consulting to design and implement your AML/CTF framework.

3. Register with FINTRAC (MSB Registration). Once incorporated and with a compliance program in place, you apply online to FINTRAC. The process is as follow:

   • Pre-registration: Fill out a basic form to initiate contact. FINTRAC will then send you a complete registration package.

   • Provide Required Information: The registration form will ask for details about your company structure, ownership, management, banking, and the types of MSB services you provide. You must identify your compliance officer and describe your AML controls.

   • Police Checks: For every director, CEO, president, and anyone holding ≥20% ownership, you must submit a criminal record check. These checks must be from the individual’s country of residence (translated into English/French if necessary). This step surprises many startups, so plan ahead.

   • Submission: FINTRAC registration is done through their secure portal. They do not charge any fee to register (However, there may be costs for document translations, lawyer notarization, and time spent preparing the application.)

   After submission, FINTRAC will review your application and may ask for clarifications. This process typically takes several weeks.

4. Ongoing Compliance. Getting “licensed” (registered) is just the beginning. Once your registration is approved, you must maintain your AML/CTF program and regularly report to FINTRAC

   This includes:

   • Suspicious Transaction Reports (STRs): Report any transactions you suspect involve money laundering or financing of terrorism.

   • Large Cash / Virtual Currency Transaction Reports: File reports for large cash deals or virtual currency transfers over set thresholds.

   • Electronic Funds Transfer Reports (EFTRs): Report cross-border fund transfers above the reporting threshold.

   • Recordkeeping: Keep all transaction records and client ID records for at least 5 years

   • Annual Program Review: Review and update your compliance program at least once a year.

   Maintaining good compliance isn’t optional. Canadian banks and regulators will audit MSBs, and failure can mean hefty penalties

   Example: FINTRAC guidance emphasizes that a strong compliance program “will form the basis of meeting all your regulatory requirements. In other words, if your policies and procedures are sound and up-to-date, you’re in good shape to satisfy ongoing obligations.

Costs & Timelines

One advantage of Canada’s system is that FINTRAC does not charge registration fees for MSB applications. However, there are still costs you should budget for:

• Incorporation Fees: About CAD $200 for federal incorporation (more if you use a premium service or incorporate provincially)

• Legal and Consulting Fees: Most startups hire lawyers or consultants to prepare incorporation documents, compliance manuals, and the FINTRAC application. These can range from a few thousand to tens of thousands of dollars, depending on complexity.

• AML Officer / Staff: You’ll need at least one dedicated compliance officer; budget for salary or outsourced services.

• Other Expenses: Translation of documents (if any executives live outside Canada), notary fees, plus routine costs like audit and software for transaction monitoring.

Timeline: With proper preparation, the license process can move quickly. Company incorporation in Canada typically takes 1–2 weeks, and FINTRAC registration often completes in 4–6 weeks after submissioncoincub.com. One industry source notes that, in some cases, a startup can finish incorporation in a few days and complete MSB registration in 2–4 weeks ,In practice, count on 2–3 months from start to finish (and possibly longer if any issues arise). Using an experienced partner like 7BaaS can help avoid delays by ensuring all paperwork is done correctly the first time.

Key Compliance Requirements

As a licensed MSB, your startup must meet ongoing regulatory requirements. Highlights include:

• Robust AML/CTF Program: As mentioned, maintain written policies, risk assessments, client due diligence (KYC) and training. For example, know-your-customer rules mandate verifying the identity of clients using reliable documents (e.g. government IDs) whenever you enter into a service agreement.

• Transaction Monitoring & Reporting: Continuously monitor transactions for red flags. Report large transactions and any suspicious activity to FINTRAC without delay. FINTRAC specifically requires reporting large virtual currency and cash transactions

• Recordkeeping: Preserve all records of transactions and client IDs for at least five years.These must be readily available in case of audits by FINTRAC or other authorities.

• Beneficial Ownership Information: Collect and verify information on the ultimate beneficial owners of your clients, and report this as required.

• Compliance Officer and Audit: Have a named compliance officer and conduct an independent review of your AML program regularly.

Failing any of the above is a common compliance pitfall. (For instance, neglecting to file an STR or not keeping 5-year records can trigger fines.) Working with 7BaaS’s Compliance Consulting ensures your program meets all current standards.

Common Mistakes to Avoid

Even well-intentioned startups can stumble. To keep on track:

• Don’t Operate Before Registering: Running payments, exchanges or crypto services before FINTRAC registration is against the law. Ensure registration is filed before going live.

• Don’t Underestimate Compliance: Leaving AML and KYC as an afterthought invites trouble. You should develop policies and appoint a compliance officer early in the process

• Avoid Oversights in Paperwork: Missing documents – like up-to-date criminal records for directors or a complete risk assessment – will delay approval. In our experience, businesses often forget police checks for key so gather those early.

• Don’t Assume Provincial Licenses Cover You: Even if you have provincial money-service licenses, federal FINTRAC registration is still mandatory for MSBs.

• Watch Your Timeline: The approval process may seem slow, so start well in advance of your target launch. If you rush at the last minute, errors multiply.

By preparing thoroughly and avoiding these pitfalls, your fintech can stay compliant and save time.

How 7BaaS Can Help

At 7BaaS we specialize in making the licensing process smooth for fintech startups. Our team can handle each step so you stay focused on your product:

• Company Formation: We help you incorporate the ideal Canadian entity through our Company Formation Services, securing your corporate structure quickly and correctly.

• Compliance Program Development: Our Compliance & Regulatory Consulting team will build your AML/KYC manual, risk assessment, and reporting procedures from the ground up.

• MSB Registration: We prepare and submit your FINTRAC registration application via our MSB Registration service, liaising with regulators on your behalf.

• Crypto & Virtual Assets: If you’re in crypto or digital assets, our Crypto & Virtual Asset Licensing practice ensures you meet all requirements specific to that space (for example, advising on impending Bank of Canada PSP rules and ensuring your crypto platform has the right controls).

• Full-Service Fintech Infrastructure: For startups planning a broader digital banking or payments platform, our Banking Brand Setup packages deliver end-to-end support, including white-label tech, cards, and IBAN setup if needed.

In short, 7BaaS combines deep regulatory expertise with a startup-friendly approach. We’ve guided dozens of fintechs and can fast-track your licensing journey. Our clients appreciate that we’re transparent about costs and timelines, and we stand ready to answer questions as you grow.

Ready to Get Started?

Launching a fintech in Canada requires careful navigation of licensing and compliance rules – but you don’t have to do it alone. 7BaaS’s expert team is here to help you secure your MSB registration and build a compliant business from day one. Contact us today to discuss your project and get a free consultation. We’ll make sure you have the right company setup, AML program, and regulatory filings to succeed in the Canadian market.

Contact 7BaaS to kick off your licensing journey and focus on building your fintech – we’ll handle the paperwork and compliance.

Sources: Guidelines from FINTRAC and industry experts

fintrac-canafe.canada.ca

coincub.com

Have been used in preparing this guide, alongside 7BaaS’s own regulatory experience and service offerings.

let us know if you have any Questions Regarding FINTRAC regulatory.