In Hong Kong's financial sector, "no license, no business" is a fundamental principle. But in 2026, the Securities and Futures Commission (SFC) has significantly tightened its review process. Application thresholds and compliance costs are rising. And here is the key point that catches many off guard: obtaining the license is only the beginning. The real test begins after you are licensed.
This guide breaks down the core risks and compliance points every applicant must understand.
I. Substantive Business Operations Are a Prerequisite for Licensing
The SFC requires every licensed corporation to maintain a fixed, contactable business premises in Hong Kong. When assessing your office, the SFC considers several factors:
- Security and segregation: The premises must have a proper segregated office area, with essential equipment and communication systems accessible only by company personnel.
- Confidentiality: Adequate safeguards must be in place to protect confidential information and client privacy.
- Regulatory access: The premises must always be accessible for regulator visits.
Shared office spaces are not automatically prohibited. If you do not have your own premises, you may share with an existing operator - but you must explain in your application how you will ensure the security of sensitive data.
What will be rejected: Purely virtual mailboxes or addresses without actual office space will be rejected outright. Complete your local office lease, build your local management team, and establish your internal control systems before you submit your application.
II. Responsible Officers (ROs) Must Meet the Requirements
Every licensed corporation must appoint at least two Responsible Officers (ROs) for each type of regulated activity applied for. At least one of these ROs must be an executive director of the corporation. ROs must be based in Hong Kong and remain fit and proper at all times.
RO competence assessment: The SFC takes a comprehensive view of qualifications, industry experience, and professional credentials when evaluating RO competence. The general expectation is at least three years of relevant industry experience within the past six years.
There is no statutory 40-hour per week requirement, and the SFC does not mandate an "independent RO" who does not serve as an RO for other corporations.
Key deadline: If a core RO leaves, the company must submit a written notification to the SFC within 7 business days.
III. Virtual Asset Investments: Compliance Thresholds
The virtual asset regulatory landscape in Hong Kong is evolving rapidly. In May 2026, the SFC and the Financial Services and the Treasury Bureau (FSTB) published consultation conclusions on regulating virtual asset advisory and management services. A legislative proposal for the new VA licensing regime is expected to be submitted to the Legislative Council in 2026.
For Type 9 (Asset Management) license holders:
- If virtual assets make up 10% or less of the portfolio's total asset value: the fund is regulated under the existing Type 9 regime.
- If virtual assets exceed 10%: the fund must comply with the SFC's additional requirements.
For virtual asset trading platforms:
- Platforms offering only non-security tokens require an AMLO VASP license.
- Platforms offering security tokens require both an AMLO VASP license and SFC Type 1 (securities dealing) and Type 7 (automated trading services) licenses.
IV. Post-Licensing Compliance Obligations
Once licensed, the compliance work truly begins. The SFC actively supervises authorized firms. Licensed corporations and their ROs must remain fit and proper at all times and comply with all applicable provisions of the SFO and SFC guidelines.
Key ongoing obligations include:
- Audited financial statements: Must be submitted to the SFC within four months of the financial year-end.
- Financial resources returns: Must be submitted on a monthly or semi-annual basis.
- Personnel change notifications: Changes to key personnel (ROs, directors, etc.) must be notified to the SFC within 7 business days.
- Licence display: The licence or certificate of registration must be displayed prominently at the principal place of business, and a certified copy must be displayed at each branch.
- AML/CFT compliance: The SFC continues to strengthen requirements around customer due diligence, suspicious transaction reporting, and transaction monitoring.
Remember: An SFC license is not a permanent grant. It is an indefinite-term license that must be maintained through continuous compliance. Failure to meet any of the above conditions can trigger regulatory penalties, suspension, or even revocation of the licence.
V. Conclusion
Hong Kong financial licensing involves multiple interconnected elements: substantive business operations, RO appointments, documentation preparation, and ongoing compliance. Any oversight in any of these areas can lead to application failure or licence restrictions.
Before you begin, complete a full business logic assessment and budget planning. Have realistic expectations about the time, capital, and compliance costs involved.
Contact Us
Tannet Group is in its sixth five-year development plan stage, and Shanghai Tannet, as part of the Group, is well-positioned to support your Hong Kong talent scheme renewal and other business needs. If you have any questions, please feel free to contact us at +86-18101649652 or email tianyinong@tannet-group.com
END
Welcome to SH Tannet!