about-us-sec-img

Hong Kong is seen as a great place for cryptocurrency transactions because its laws are well-suited to current needs. Plus, Hong Kong's strong economy and advanced technology offer extra benefits for this field. Alparanjo can assist with registering crypto businesses and getting a crypto license in Hong Kong.

The latest World Cryptocurrency Readiness Report shows that Hong Kong is the best place for cryptocurrency in 2022, ahead of other countries in every category. This includes having the most blockchain startups and cryptocurrencies for its population. It's impressive because Hong Kong has outperformed countries like the U.S. and Switzerland.

To become a major center for cryptocurrency, Hong Kong has taken several steps to regulate the industry:

In 2019, the Securities and Futures Commission (SFC) made rules for security token offerings (STOs) and virtual asset trading platforms (VATPs) to follow existing laws. That same year, the SFC created rules for cryptocurrency exchanges.

The Hong Kong Blockchain Society is also working with the government, schools, and businesses to help develop blockchain legally through education and research. The Hong Kong Monetary Authority (HKMA) is looking into using blockchain in its financial system. For example, in May 2023, the HKMA started an e-HKD pilot program with 16 companies to test digital currency in 14 different projects. Additionally, Hong Kong has several cryptocurrency exchanges, including BitMEX, OKEx, and Bitfinex.

Advantages of obtaining a cryptocurrency
license in Hong Kong

Crypto activities in Hong Kong have many benefits:

Icon Images
1

Clear Rules

Hong Kong has set clear rules for cryptocurrency activities, providing a stable framework for businesses operating in this sector.

Icon Images
2

Good for Business

The city is friendly for businesses and has a strong legal system. Starting a cryptocurrency business is easy, with clear steps and good government support. Plus, there is no capital gains tax on cryptocurrencies.

Icon Images
3

Investment Opportunities

As a major financial center, Hong Kong has many investors and venture capitalists. Getting a cryptocurrency license here opens the door to a lot of potential investors and funding, helping businesses get the money they need to grow.

Icon Images
4

Trust and Reputation

Having a cryptocurrency license in Hong Kong makes a business look more trustworthy, which can attract bigger investors and partnerships. The strong rules and focus on international standards boost Hong Kong’s reputation in the global crypto community.

Icon Images
5

Community Support

Hong Kong has a lively cryptocurrency community with many startups, events, and networking chances. There are also groups and incubators that support blockchain innovation.

Icon Images
6

Global Market Access

Hong Kong is a bridge to both Asian and global markets. With strong relationships, easy business practices, and good infrastructure, companies with a cryptocurrency license can reach international customers.

These advantages make Hong Kong a great place for businesses that want to work in the cryptocurrency industry and seize new opportunities.

Requirements for Obtaining a Crypto License in Hong Kong

Until recently, Hong Kong's government was neutral about licensing cryptocurrency exchanges. But new rules from the Anti-Money Laundering and Counter-Terrorist Financing Act, passed in December 2022, came into effect on April 1, 2023. Now, all virtual asset service providers (VASPs) need a crypto license from the Securities and Futures Commission (SFC) to operate legally.

If a person or company doesn’t have a license, they cannot:

  • Offer any virtual asset services (VA).
  • Claim to provide VA services.
  • Perform regulated activities for businesses offering VA services.
  • Claim to perform such regulated activities as an individual.
  • Advertise VA services.

The SFC started accepting applications for cryptocurrency trading platform licenses on June 1, 2023.

The rules state that VA services include:

  • Regularly offering to buy or sell virtual assets, which leads to a binding transaction.
  • Regularly connecting people to negotiate or complete transactions involving virtual assets.
  • When client money or virtual assets are held by the service provider, either directly or indirectly.

However, cryptocurrency trading platforms that trade in financial products (like securities and futures contracts) do not need to follow these new licensing rules, as they are already regulated under the Securities and Futures Ordinance (SFO).

It's important to note that the new licensing system applies to all cryptocurrency exchanges registered in Hong Kong under the Companies Ordinance (Chapter 622), including those based outside Hong Kong that are targeting Hong Kong citizens.

How to Get a Crypto License in Hong Kong

To get a license in Hong Kong, you need to:

  • Show that you plan to offer services in Hong Kong.

  • Pass a test that checks:

    • You have no criminal record.

    • Your history with anti-money laundering (AML) and counter-terrorist financing (CFT) activities.

    • Your financial situation.

    • Your education and qualifications.

    • Your reputation, experience, character, reliability, and financial honesty.

  • List at least two people in the application who are qualified to provide virtual asset (VA) services and are applying to be responsible officers.

  • Apply for approval of the place where you will store important records or documents.

The Securities and Futures Commission (SFC) might set conditions on your license, such as rules about managing risk, AML/CFT, financial resources, and cybersecurity.

You need to file your application with the Commission and pay the required fees.

Our consultants can provide more details about the process and timeline for getting a crypto license in Hong Kong.

Find more information about the
Hong Kong Crypto license

Send Request
Any Questions

Frequently Asked Questions

Yes, cryptocurrency is regulated in Hong Kong. It follows the Anti-Money Laundering and Counter-Terrorist Financing Act (updated in 2022). Other laws, like the Securities and Futures Ordinance (SFO), manage things like securities and futures contracts.
Yes, you can trade cryptocurrency in Hong Kong. There are platforms and exchanges where people can buy, sell, and trade different cryptocurrencies.
Crypto businesses in Hong Kong can face big fines and criminal charges if they don’t follow the rules. Operating without a license could lead to fines of up to HK$5,000,000 (around $640,000), and management could face up to seven years in prison. If a licensed Virtual Asset Service Provider (VASP) or its employees don’t follow anti-money laundering and counter-terrorist financing rules, they could be fined HK$1,000,000 (about $128,000) and imprisoned for up to two years. They might also face actions like losing their license or paying extra fines.
In Hong Kong, cryptocurrencies like Bitcoin are seen as “virtual commodities” and not as legal money. So, if you buy and sell cryptocurrencies as an investment, you don’t have to pay capital gains tax. However, if you trade crypto as part of a business, it’s considered income and is subject to income tax. Individuals pay up to 16.5%, while companies pay 15%. But taxes are only applied to profits made from business activities within Hong Kong. If you earn money from outside Hong Kong, it’s not taxable. For Initial Coin Offerings (ICOs), the tax depends on whether the ICO is treated as a security offering (where investors get voting rights) or as a contract for future services or goods.
Contact Us

Your Legacy Awaits

arrow
Follow Us
footer-img

Explore our complete range of crypto and forex license services by navigating your future confidently with Alparanjo.

Quick Links

Useful Links

Contact Info

Copyright 2023, alparanjo.com All Rights Reserved.