Crypto License in Hong Kong

Establish your presence in Asia’s financial hub with a crypto license in Hong Kong. Operate under the SFC’s regulations to access lucrative markets.

Crypto-Licenses

Crypto exchange/wallet license

Company formation

Low-tax company registration

Bank Account Setup

Bank accounts for crypto businesses

Advisory for Crypto Projects

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Introduction
Benefits of Obtaining a Crypto License in Hong Kong
Types of Crypto Licenses Available in Hong Kong
Requirements for a Crypto License
Steps to Obtain a Crypto License
Taxation for Crypto Companies in Hong Kong
Regulatory Authorities and Compliance
Frequently Asked Questions about Hong Kong crypto license
Conclusion

Hong Kong crypto license all you need to know.

Hong Kong has rapidly emerged as a premier hub for cryptocurrency businesses, thanks to its progressive legislation, robust financial infrastructure, and thriving tech ecosystem. In fact, the latest World Cryptocurrency Readiness Report ranks Hong Kong as the most “crypto-ready” jurisdiction, surpassing major global players like the U.S. and Switzerland. Against this dynamic backdrop, obtaining a crypto license in Hong Kong presents a compelling opportunity for entrepreneurs and established companies alike. Below, we explore the benefits, types of licenses, regulatory requirements, taxation guidelines, and other key information you need to know to tap into Hong Kong’s flourishing digital asset market.

Benefits of Obtaining a Crypto License in Hong Kong

Clear Regulatory Framework Hong Kong has established a transparent legal framework for virtual asset service providers (VASPs). This provides clarity for businesses looking to engage in cryptocurrency trading, token issuance, and other digital asset-related services.
Business-Friendly Environment Renowned for its pro-business policies and world-class legal system, Hong Kong offers a smooth process for company formation and licensing. The government’s active support for blockchain innovation further cements its reputation as a crypto-friendly environment.
Access to Capital and Investors As a global financial center, Hong Kong provides unparalleled access to venture capitalists, institutional investors, and high-net-worth individuals. Holding a valid crypto license here significantly boosts your credibility among potential funders
Robust Reputation Securing a Hong Kong crypto license signals trust and compliance, reassuring both institutional partners and retail customers. Compliance with international standards and strict Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) protocols enhances your standing in the global blockchain industry.
Dynamic Crypto Ecosystem Hong Kong is home to numerous blockchain startups, cryptocurrency exchanges (e.g., BitMEX, OKEx, and Bitfinex), and regular industry events. This thriving ecosystem fosters collaboration, networking, and continual innovation.
Gateway to Asian and Global Markets Strategically positioned at the heart of Asia, Hong Kong serves as a springboard for expansion throughout the region and beyond. Licensed crypto firms enjoy seamless access to lucrative international markets.

Types of Crypto Licenses Available

The Hong Kong regulatory landscape for crypto-related businesses has evolved over the years. Although the new framework primarily focuses on VASPs (Virtual Asset Service Providers), several license types may be relevant depending on the nature of your operations:

1. VASP License

Introduced under the latest amendments to the Anti-Money Laundering and Counter-Terrorist Financing Act (AMLO), the VASP license is mandatory for companies offering virtual asset services to Hong Kong residents..
Covers crypto exchanges, brokers, and other platforms regularly offering, buying, or selling digital assets through electronic means.

2. Securities and Futures Ordinance (SFO) Licenses

If your platform deals with tokens classified as securities or futures contracts, you must comply with existing SFO regulations. This may involve acquiring a Type 1 (dealing in securities), Type 7 (automated trading services), or Type 9 (asset management) license, among others.
Cryptocurrency exchanges that list “security tokens” are already subject to SFO requirements.

3. Additional Permits for Specific Services

Beyond core crypto trading, certain businesses (e.g., custodian services, Initial Coin Offerings related to security tokens) may need additional approvals or clarifications from the Securities and Futures Commission (SFC) depending on the exact scope of their operations.

Requirements for a Crypto License in Hong Kong

With the new licensing regime effective from April 1, 2023, all businesses offering crypto-related services to Hong Kong residents must:

Registered Company: Operating without this license can result in severe penalties, including hefty fines and imprisonment.

Pass a Fit and Proper Test: Applicants must demonstrate a clean criminal record, sound financial history, solid AML/CFT compliance, and requisite industry qualifications.

Designate Responsible Officers: At least two qualified individuals must be named as Responsible Officers to oversee day-to-day compliance and risk management.

Secure Appropriate Premises Approval: Any space used for the storage of customer records or important business documents must be approved under the new regulations.

Ensure Ongoing Compliance: The SFC may impose conditions on licensing relating to risk management, cybersecurity, AML/KYC protocols, and financial resources, in accordance with Section 53ZRK of the Regulation.

Steps to Obtain a Crypto License In Hong Kong

Steps to Obtain a Crypto License in Hong Kong

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Steps to Obtain a Crypto License in Hong Kong

Talk with our founder Mardo Soo

Get a free consultation

Initial Consultation and Business Setup

Determine whether your project’s tokens or services fall under Hong Kong’s regulatory scope.
Incorporate a company under the Companies Ordinance (Chapter 622), if not already established.

Prepare Licensing Application

Submit the formal application to the SFC, along with necessary documentation (e.g., business plan, AML/KYC policies, resumes of Responsible Officers).
Pay the application fee (approximately USD 10,000).

Undergo Fit and Proper Assessment

The SFC reviews your corporate structure, financial standing, and compliance readiness.
Applicants must demonstrate strict internal controls, robust AML procedures, and professional competence.

Obtain Premises Approval

Provide details of all premises where you will store business records or host core operations.

Review and Approval

The SFC may request additional information or impose licensing conditions.
Once all requirements are satisfied, the license is granted.

Maintain Ongoing Compliance

Conduct regular audits, file annual supervision fees, and keep abreast of evolving regulatory guidelines
Ensure continuous AML/CTF training for staff and timely reporting of suspicious transactions.

Need a crypto license in Hong Kong? We offer free consultations and help with other jurisdictions. Contact us today!

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Taxation for Crypto Companies in Hong Kong

Capital Gains Tax

Hong Kong does not impose capital gains tax on cryptocurrencies regarded as “virtual commodities.”

Corporate Income Tax

A two-tiered system applies:
- 8.25% on the first HKD 2 million of profits
- 16.5% on the remainder
Businesses generating profits outside Hong Kong may qualify for a 0% tax rate under the territorial principle.

Treatment of ICOs

Tax obligations vary depending on whether tokens are classified as securities or utility tokens.
Offerings that grant voting rights or function like securities must comply with SFO requirements.

Personal Income Tax

Individuals trading crypto as a business activity may be subject to income tax at a maximum rate of 16.5%.
This tax is assessed only on Hong Kong–derived profits.

Regulatory Authorities and Compliance

To obtain a crypto license in Lithuania, the following requirements must be met:

Hong Kong Monetary Authority (HKMA)

Oversees virtual asset service providers from a financial stability perspective.
Ensures strict AML/KYC protocols are in place to mitigate money laundering and terrorist financing risks.

Securities and Futures Commission (SFC)

Regulates crypto exchanges and trading platforms dealing in digital assets that fall under securities or futures definitions.
Issues licensing guidelines for crypto trading platforms, security token offerings (STOs), and custodial services.

Relevant Regulations

Anti-Money Laundering and Counter-Terrorist Financing Act (2022 Amendment): Aligns local rules with FATF Recommendation 15, mandating VASP licensing.
Securities and Futures Ordinance (SFO): Governs tokens categorized as securities or futures contracts.
SFC Virtual Asset Trading Platform Guidelines: Defines licensing requirements, investor protection, cybersecurity standards, and more.

Hong Kong’s regulatory framework aims to strike a balance between encouraging blockchain innovation and protecting investors. Licensed operators must comply with robust AML/CTF guidelines and maintain strict transparency in their operations.

Frequently Asked Questions

Yes. Hong Kong’s crypto regulations are anchored in the Anti-Money Laundering and Counter-Terrorist Financing (Amendment) Ordinance 2022 and the Securities and Futures Ordinance (SFO). These laws establish licensing requirements, investor protections, and AML/CTF measures for virtual asset service providers.

No Capital Gains Tax if you’re simply trading crypto as an investment.
Corporate and Personal Income Tax apply if profits are deemed part of ordinary business activities, with rates up to 16.5% for individuals and 16.5% for corporate profits exceeding HKD 2 million.
Territorial Principle means only Hong Kong–sourced income is taxable; offshore profits are exempt.

Yes. Multiple licensed and regulated exchanges operate in Hong Kong, allowing users to buy, sell, and hold cryptocurrencies. Just ensure the chosen platform or exchange is fully licensed under the new VASP regime or existing securities laws.

Operating Without a License: Fines up to HKD 5,000,000 (≈USD 640,000) and up to seven years in prison for responsible persons.
AML/CTF Non-Compliance: Fines up to HKD 1,000,000 (≈USD 128,000) and two years’ imprisonment, plus potential license suspension or revocation.

Conclusion

Securing a crypto license in Hong Kong unlocks vast opportunities in one of the world’s most vibrant digital asset ecosystems. With a robust regulatory framework, business-friendly environment, and access to global capital, Hong Kong stands at the forefront of blockchain innovation. Whether you aim to launch a cryptocurrency exchange, issue tokenized securities, or offer crypto-based financial services, navigating the licensing process with expert guidance is crucial.

If you’re ready to establish your crypto venture or need professional consultation on the Hong Kong licensing process, our team at yourcryptocompany.com is here to help. Embrace Hong Kong’s crypto-friendly landscape and position your business for long-term success in this dynamic, fast-evolving market.

Trusted by global clients, including Binance, we provide expert guidance to help your crypto venture succeed in Hong Kong and other jurisdiction. Schedule a free consultation now!

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