First, clarify what “overseas” is being measured against
A company incorporated in jurisdiction A, operated by a team in jurisdiction B, and serving customers in jurisdiction C may need to analyze all three places at the same time. A certificate of incorporation reflects the legal entity, but it cannot fully answer who is taking orders, managing wallets, and making risk decisions. It is advisable to determine the actual place of performance by function, including contracting, marketing, customer onboarding review, transaction execution, asset control, and complaint handling; the mere fact that servers are located abroad does not establish that core operations are also abroad. The existence of cloud services, outsourced customer support, and remote employees should likewise not be mechanically equated with a local licensing obligation, but these facts should be included in the factual inventory so that local rules can determine whether the connection is sufficient, rather than being disregarded at the outset.
Some regimes look at local outbound business
In 2025, the Monetary Authority of Singapore (MAS) clarified that a DTSP that falls within the relevant regime and provides digital token services only to customers outside Singapore also requires the corresponding licence, and stated that it would generally not grant such licences. This example shows that “not serving customers in the place of incorporation” does not necessarily reduce the difficulty of market entry and may even make a particular establishment structure unsuitable for the actual business. However, this should be assessed by reference to the specific entity, tokens, and scope of services, and that position should not be extended to all Singapore technology companies.
Some regimes look at whether services are solicited overseas for local customers
The FMSB conditions listed by FINTRAC in Canada include having no place of business in Canada but directing and actually providing relevant services to individuals or entities in Canada; both the manner of marketing and customer contact are relevant. Therefore, a website statement that services are provided “only overseas” and the use of a foreign company to sign contracts do not mean that the customer market can be ignored. Active promotion, local agents, and service support for a particular market should be examined together with the actual location of customers; the assessment cannot be completed solely on the basis that a customer provides an overseas address.
Even if the place of incorporation remains unchanged, the business may still change
Assume that the team originally served only one assessed market, but later had sales personnel continuously solicit customers in another country and had local employees approve large payments. The articles of association have not changed, but new customer and operational connections have been added. It is advisable to establish country admission approval: first confirm the licensing or cross-border service basis, and then open registration, marketing, and transactions, rather than conducting business first and supplementing the research afterward. Where a mainland team is involved, its actual functions and mainland restrictions should also be separately reviewed; an overseas licence cannot replace this step.
Recommended actions
- Create a three-layer map of entities, personnel functions, and customer markets, rather than listing only the company’s registered address.
- For each initial market, record the factual connections relating to active marketing, service contact, and payment channels.
- Include new countries, personnel permissions, and local agents in compliance change approval.
Information note: This article provides general information only and does not replace legal advice based on specific facts.
References
- MAS clarifies DTSP regulatory regime — MAS
- Money services businesses — Foreign MSB criteria — FINTRAC
- Notice on Further Preventing and Addressing Risks Associated with Virtual Currency and Related Matters — People's Bank of China and seven other departments
