Hong Kong is a global leader in trading precious metals and stones, offering incredible opportunities for businesses involved in gold, diamonds, platinum, jade, and more. But to ensure your business operates smoothly and legally, obtaining the Precious Metals and Stones Dealer (PMSD) Registration is a must.
In this guide, we’ll take you through the simple steps of obtaining your PMSD registration in Hong Kong, covering everything from eligibility and documents to fees, compliance, and penalties for non-compliance. Let’s get started!
Why Do You Need a PMSD Registration?
If you plan to buy, sell, import, or export precious metals or stones as part of your business in Hong Kong, a PMSD Registration is not just a requirement — it’s a smart business move.
Why is it so important?
- Legal Compliance: The Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) mandates that businesses involved in precious metals and stones must adhere to strict AML and KYC regulations.
- Market Trust: Being licensed shows customers, suppliers, and investors that you are committed to running a transparent and secure business.
- Operational Integrity: It protects your business from illicit activities such as money laundering and fraud.
By obtaining a PMSD registration, your business will gain legitimacy and the trust of global partners, ensuring smooth operations in the precious metals and stones market.
Who Needs to Apply for a PMSD Registration?
If your business plans to engage in regular transactions involving precious metals and stones in Hong Kong, you will need to apply for PMSD registration. Here’s what you need to know:
Precious Metals and Stones Covered by the License:
- Precious Metals: Gold, silver, platinum, and other platinum-group metals
- Precious Stones: Diamonds, rubies, sapphires, emeralds, jade, and other gemstones
- Finished Jewellery & Ornaments: Items made primarily from precious metals or stones
Exemptions:
- Small, Occasional Transactions: Businesses dealing in small transactions (below HK$120,000 per deal) are not required to register.
- Financial Institutions: Those already regulated under other AML laws are also exempt.
If your business regularly deals with significant volumes of precious metals and stones, it’s time to start the registration process.
Types of PMSD Registration
The registration process is straightforward, but there are two types of registration depending on the nature of your business:
1. Category A Registration
For businesses that do not engage in cash transactions exceeding HK$120,000 per transaction:
- Fewer compliance obligations.
- Lower registration and renewal fees.
2. Category B Registration
For businesses that accept cash transactions exceeding HK$120,000:
- Must implement Anti-Money Laundering (AML) and Know Your Customer (KYC) measures.
- More extensive compliance obligations and higher fees.
Category B businesses are subject to more stringent oversight but gain the ability to accept larger cash transactions.
Application Process: Your Path to Legal Compliance
Step 1: Prepare Your Documents
Before starting your application, ensure you have all the required documents ready.
- Business Registration Certificate (BR) from the Inland Revenue Department
- Certificate of Incorporation (for companies)
- Proof of Business Address (utility bill, lease agreement)
- Identification Documents of business owners and key personnel
- Company Structure Details (for Category B applicants)
- AML Compliance Policies (for Category B applicants)
Step 2: Submit Your Application
Submit your completed application either:
- Online through the Trade Single Window system, or
- By mail to the Hong Kong Customs and Excise Department (C&ED) office.
Step 3: Pay the Application Fee
Your registration fee will depend on the type of registration you require:
- Category A: HK$260
- Category B: HK$1,970
You can pay these fees via bank draft, cheque, or online payment.
Step 4: Background Check & Review
The Customs and Excise Department will process your application and may conduct additional due diligence, especially for Category B applicants. The processing time is typically 2-3 months, though it may take longer in more complex cases.
Step 5: Receive Your PMSD Registration Certificate
Once your application is approved, you will receive your official PMSD Registration Certificate. Display it prominently at your business premises to show customers and regulatory authorities that you are operating legally.
Ongoing Compliance and Obligations
For Category A Registrants:
- Transaction Records: Keep all transaction records for at least 5 years.
- Notify Changes: Inform the Customs and Excise Department of any changes in your business.
For Category B Registrants:
- AML/CFT Compliance: Implement full AML and CFT measures, including customer due diligence (CDD) for cash transactions.
- Suspicious Transaction Reporting: Report any suspicious activity to the Joint Financial Intelligence Unit (JFIU).
- Employee Training: Regularly train staff to comply with AML laws.
Failure to comply with these requirements could result in severe penalties, including fines or license suspension.
Penalties for Non-Compliance: Protect Your Business
It is crucial to ensure your business complies with the PMSD Registration requirements. Failing to apply for the necessary license or not adhering to AML and KYC regulations can result in significant penalties, including:
- A fine of up to HKD 100,000
- Imprisonment for up to six months
In addition to these penalties, businesses that fail to obtain the required registration may face license suspension or revocation, preventing them from legally engaging in precious metals and stones trading in Hong Kong. Non-compliance could also result in criminal liability, with potential prosecution leading to severe legal consequences.
Proactive compliance is essential to avoid such penalties and maintain the legal standing of your business.
Renewal Process & Fees
Registration Validity:
- Category A: Valid for 1 year.
- Category B: Valid for 3 years.
You must renew your registration before the expiration date to remain compliant.
Renewal Fees:
- Category A: HK$195
- Category B: HK$1,060
Processing time for renewals is typically 30-60 days.
If there are any changes to your business (e.g., change of ownership, structure, or address), notify the Customs and Excise Department immediately.
Common Challenges and How to Overcome Them
- Delayed Processing: Ensure all documents are complete and accurate before submission to avoid delays. Double-check everything before sending it to the authorities.
- AML Compliance Complexity: For Category B registrants, setting up an effective AML policy can be complex. Consider working with legal or compliance advisory services to ensure your business adheres to all necessary regulations.
Conclusion: Your Path to Success in the Precious Metals and Stones Market
Obtaining your Precious Metals and Stones Dealer (PMSD) Registration in Hong Kong is not only a legal requirement but also a valuable step toward establishing your credibility and success in the precious metals and stones industry. By following the registration process and maintaining compliance with AML and KYC laws, you’ll position your business for long-term growth in Hong Kong’s competitive market.
Need help navigating the registration process or ensuring ongoing compliance? Contact a legal expert or compliance consultant today to guide you through every step of the way.
For the latest updates, visit the Hong Kong Customs and Excise Department website:
🔗 Hong Kong Customs and Excise Department
