| Entity and Licence Arrangements | Establish or use an eligible new entity and apply for the relevant licence, approval or registration for the specific business to be conducted. | Acquire equity or control in an already licensed company; the licence remains with the original licensee, and its validity, permitted scope, additional conditions and current regulatory status must be verified. | This is not the transfer of a licence alone from one company to another. The transaction concerns the company and its control in the first instance. |
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| Matching the Scope of Authorisation to the Business | Map clients, products, control of funds or assets, geography and actual functions to the proposed statutory business scope. | Verify whether the target’s existing licence already covers the proposed business; additional categories, products, clients or control arrangements may require separate treatment. | “Already licensed” does not mean that all of the buyer’s planned business activities can automatically be carried on. |
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| Suitability of shareholders, ultimate beneficial owners and directors | Prepare ownership chains, CVs, source-of-funds information, financial capacity, and fitness and propriety materials for the proposed controllers, directors, senior management, and key-function holders. | Conduct equivalent look-through checks on the new buyer, new controllers and proposed personnel, and first determine whether the transaction triggers prior approval, consent or notification under this regime. | Intra-group arrangements, indirect acquisition, dilution or the absence of a change in the ultimate UBO do not automatically rule out an analysis of control. |
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| Historical liabilities and legacy matters | A new entity does not have the acquired target’s historical regulatory, contractual, tax, client or operational record, but must still establish its own complete compliance and operational records. | Investigate historical regulatory communications, examinations and remediation, annual fees and filings, complaints, potential litigation, tax, client assets, AML/CFT records and undisclosed liabilities. | A change of shareholders does not automatically extinguish the company’s existing liabilities; this is the key structural difference between an acquisition and a new application. |
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| Capital and Financial Resources | Arrange capital and ongoing financial resources according to the applicable regime, business scale, risk, launch budget and regulatory requirements. | In addition to reviewing the target’s existing capital and liquidity, assess whether it will continue to meet resource requirements after completion and whether working capital or a risk buffer needs to be added. | Company registration fees are not regulatory capital; the acquisition price is also not capital or available operating resources. |
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| Core Documents and Evidence | The focus is on application documents such as the business plan, organisational and control structure, policies and procedures, personnel information, financial projections, outsourcing and client arrangements. | In addition to new application documents, include company and regulatory records, the data room, historical financial and tax records, contracts, clients, personnel, systems and transaction documents. | Both routes require consistency across the materials; an acquisition involves a deeper and broader scope of review. |
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| Primary Timeline | Determine the business classification and prepare → submit a complete application → review, enquiries, and conditions by the FSC or applicable authority → commence operations after approval. | Target screening → due diligence → agreement and closing conditions → applicable regulatory procedures and third-party consents → closing and continuity. | Any pathway may be prolonged by requests for further information, controller review, contractual consent, bank review or satisfaction of conditions; fixed timelines in months should not be promoted. |
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| Key due diligence considerations | Primarily verifies the applicant’s own structure, business model, personnel capabilities, source of funds, compliance controls and completeness of submitted materials. | Cover regulation, corporate matters, tax and accounting, legal matters, clients and transactions, AML/CFT, personnel, outsourcing, cybersecurity, systems and data. | A licence certificate, company registration certificate or seller's summary alone is insufficient to assess the quality of a transaction. |
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| Legal Transaction Terms | Typically focuses on incorporation, advisory services, registered agents, professional services, personnel and supplier arrangements. | Confidentiality and information-access arrangements, share purchase agreement, representations and warranties, indemnities, liability cap, disclosure letter, escrow/installment payments, conditions precedent and termination mechanism are required. | The transaction documents should clearly specify exit or adjustment scenarios, including regulatory approval not being obtained, material adverse findings, key third parties withholding consent, and inaccurate information. |
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| Banks, payment channels and customer contracts | With the new entity and new controllers, repeat bank/channel account opening, client onboarding and third-party due diligence. | Review change-of-control, transfer, termination and re-KYC clauses in agreements with accounts, channels, clients and key suppliers, and prepare alternative account-opening or migration plans. | Banking, payment channels and customer relationships are not assets that accompany a licence or are guaranteed to transfer with a share transaction. |
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| Systems, IP and Data | Deploy systems, data governance, access controls, backups, supplier contracts and business continuity arrangements based on the business model. | Verify the code, domain, trademarks, data-controller identity, licence rights, administrator permissions, logs, cybersecurity incidents and the feasibility of migration or exit. | The fact that a company has system accounts or data does not necessarily mean that it owns all intellectual property, may continue using it, or may lawfully transfer the data. |
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| Regulatory Matters: Prior Approval, Notification and Registration | Complete the filing, approval and pre-commencement conditions under the regime being applied for; commencement conditions differ by category. | First determine the prior-approval, notification and company-filing obligations for changes in control, significant interests, directors/senior officers, business scope or other matters under the target regime. Changes to Approved Manager application information must generally be notified to the FSC in writing within 14 days; transactions involving a significant interest under SIBA must be assessed for prior written approval. | Do not mistake the Approved Manager 14-day notification for a rule applicable to all licences, or apply SIBA procedures directly to other licences. |
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| Cost and Payment Structure | The total budget comprises government/regulatory fees, company formation and registered-agent costs, professional services, personnel, systems, office, bank account opening and ongoing operating resources. | In addition to the operating and ongoing costs of a new application, allow for the target purchase price, due diligence, transaction legal documents, regulatory changes, escrow/installment arrangements, remediation, migration and a contingency for historical liabilities. | Do not publish unverified market prices; list the purchase price, regulatory capital, government fees and third-party service fees separately. |
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| Operational Transition and Post-Closing Maintenance | After authorisation, commence operations using the reviewed business, personnel, systems, accounts and supplier arrangements, and establish an annual compliance calendar. | After closing, coordinate updates to shareholder/director/BO/registered agent records, applicable regulatory matters, bank and client communications, signing authority, personnel, auditor, systems and data controls. | Closing is not the end of the project; evidence, filings, monitoring, training and annual obligations following the change of control must be integrated into the new team. |
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| Exit conditions and stopping points | If the business characterization, eligibility of owners/personnel, resources or documentary basis cannot be established, first revise the plan, satisfy the conditions or suspend filing. | If due diligence identifies a mismatch with the permitted scope, material historical issues, unmet key regulatory procedures, an inability of the bank or clients to continue, or unverifiable information, the right to withdraw, renegotiate, or not complete the transaction should be reserved. | The ideal transaction is not one that is “signed as soon as possible”, but one that moves to the next stage only after the key facts and closing conditions can be verified. |
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