Setting up a Money Services Business (MSB) in Canada has never been more complex, or more misunderstood. While the basic registration steps may appear straightforward, the actual regulatory landscape tells a different story. Between evolving requirements, multiple regulators, and lingering misinformation online, even well-intentioned business owners can find themselves off course.

At Approved MSB Services, we work with both local and international clients looking to launch or expand MSBs in Canada. And no matter the background or scale, many arrive with the same misconceptions: some inherited from outdated resources, others from foreign jurisdictions with different standards. These assumptions often lead to costly delays, compliance gaps, or failed applications.

Here are some of the most common misunderstandings we help clients navigate.

Myth 1: All MSBs must register with the Bank of Canada

Since the introduction of the Retail Payment Activities Act (RPAA) in late 2024, many assume that every MSB must now register with both FINTRAC and the Bank of Canada. In fact, only businesses offering online payment services fall under the RPAA. Brick-and-mortar currency exchanges and crypto-only platforms are currently exempt from Bank of Canada registration.

Myth 2: Compliance officers must be based in Canada

There is no requirement for your compliance officer to reside in Canada. Under FINTRAC regulations, the compliance officer must be appointed by the board, understand the MSB’s operations, and be authorized to implement the compliance program. Residency, certification, or regulator interviews are not part of the process. For smaller businesses, the same individual can serve as director, shareholder, and compliance officer.

Myth 3: Registration is quick and predictable

Many firms still reference pre-2024 processing times of four to six weeks. Today, that is no longer realistic. Following FINTRAC’s cyber incident in early 2024, the standard processing timeline has stretched to six to eight months. Anyone promising faster turnaround should be questioned, as the timeline is now fully controlled by FINTRAC’s internal queue.

Myth 4: A business plan is required

This requirement exists in several European jurisdictions but does not apply in Canada. Neither FINTRAC nor the Bank of Canada request or review a business plan during the MSB/PSP registration process. While it’s useful to have a clear operational model for internal use, it is not part of the formal application.

Myth 5: British Columbia is still the most efficient province

Historically, BC was attractive for MSBs due to flexible director residency rules. Today, provinces like Ontario and Alberta offer the same flexibility. Meanwhile, BC has introduced a third layer of oversight through a provincial MSB regulator. For many new businesses, the added regulatory burden makes BC a less practical choice.

Myth 6: Any address is good enough

MSBs need more than a virtual or shared office to satisfy FINTRAC’s requirements. Regulators expect a real, accessible location where compliance records are securely stored and available for review. We often see delays or rejections when clients attempt to register using general-use addresses that don’t meet this standard. Our firm provides fully compliant office support to ensure clients meet expectations from day one.

Get Clear on What Matters

The Canadian MSB environment is highly regulated, but not unmanageable. The key is understanding the current expectations, avoiding unnecessary steps, and structuring your application to reflect how regulators actually assess risk and legitimacy.

To offer a deeper look at these challenges, our CEO, Eugene Jakubov, has recorded a practical YouTube video addressing the most common misconceptions we see in 2025. Whether you’re starting from scratch or revisiting your setup, the video offers clarity and direction rooted in our team’s hands-on experience.