What is the SFC license, and do I need it in 2025?

Most businesses assume the SFC license in Hong Kong only matters for big finance players. That’s the myth. 2025 compliance is a different landscape. Tighter regulations. Stricter audits. And penalties that can halt operations overnight.

It’s not just banks or hedge funds; fintech startups, asset managers, and even smaller advisory firms are now on the hook. Yet many teams still treat licensing as a box to tick later. 

In Hong Kong, licensing isn’t background paperwork. It’s the gatekeeper to your business staying open. This guide breaks down what the SFRC license is, who needs it, and why acting now protects your 2025 growth.

1. A short overview of the finance landscape in Hong Kong

Hong Kong’s financial system is tightly governed,  and it matters for anyone entering the market. The Securities and Futures Commission (SFC) is the main regulator overseeing ‘securities’ and ‘futures’ activities under the Securities and Futures Ordinance (Cap. 571).

It also shares oversight of banks classified as ‘registered institutions.’ But primary supervision of those banks falls to the Hong Kong Monetary Authority (HKMA) under the Banking Ordinance (Cap. 155).

For overseas financial institutions or foreigners opening a company in Hong Kong offering their Fintech, financial products/services, the key takeaway is clear: To operate in Hong Kong, you must understand the regulatory landscape, meet licensing requirements for Regulated Activity (RA), and follow the procedures set by the SFC and HKMA.

2. What is an SFC license?

An SFC license is an official permit issued by Hong Kong’s Securities and Futures Commission (SFC). It authorizes companies and individuals to carry out regulated activities (RA) in the securities and futures industry. Both local and foreign businesses need an SFC license to stay compliant, unless they meet specific exemptions.

3. 12 types of regulated activities  that need licensing

Use the list below to understand the categories defined under the Securities and Futures Ordinance for businesses operating in Hong Kong’s securities and futures markets.  These are the activities that require licensing or registration with the SFC. 

If your company in Hong Kong offers business activities that resemble the regulated activities by the SFC, you must apply for a license.

4. When do SFC exemptions apply?

Not every business operating around securities or futures in Hong Kong needs an SFC license. So before you spend time and money applying, let’s be clear about when exemptions actually apply.

The 2 common exemptions from SFC licensing are group company exemptions and incidental exemptions.

4.1. Group company exemptions

Group company exemptions are the most common. A Hong Kong firm providing Type 4 (Advising on Securities) or Type 9 (Asset Management) services only to:

• It's 100% parent company
• Its wholly owned subsidiaries
• Other wholly owned subsidiaries of that parent

They qualify to skip a separate license. Because the SFC recognizes that regulated activities within a single corporate family don’t carry the same third-party risks.

If third-party money is involved, like managing a fund, even intra-group Type 9 activities won’t be exempt.

Imagine Harbor Capital Asia, a wholly owned subsidiary of Harbor Group Holdings, a global asset manager. Harbor Capital Asia manages portfolios exclusively for its parent company’s internal funds and for two other Harbor subsidiaries, with no outside investors.  Because all activity stays within the corporate family and no third-party money is involved, they qualify for the intra-group exemption and don’t need a separate Type 9 license.

4.2. Incidental exemptions

Incidental exemptions are another key area. Sometimes, one license lets you carry out closely related activities without needing a second one.

For example:

• A Type 1 (Dealing in Securities) licensee can also handle Type 4 (Advising on Securities) or Type 9 (Asset Management) if those are incidental to its main business.
• A Type 9 (Asset Management) licensee can carry out Type 1, Type 2 (Futures), Type 4, and Type 5 (Futures Advising) if these services are part of managing a client’s assets.
• Expanded permissions for Type 3 (Leveraged FX Trading) and Type 12 (OTC Clearing) aren’t active yet and await SFC guidance before relying on them.

 Consider Pearl Bay Investments, a Hong Kong asset manager holding a Type 9 license.  One of its institutional clients asks Pearl Bay to execute a small number of securities trades directly related to the portfolios Pearl already manages.

Instead of applying for a separate Type 1 license, Pearl Bay can rely on the incidental exemption: those trades are a necessary part of delivering its core asset management service.  By using this exemption properly, Pearl Bay saves time and compliance costs while staying fully within SFC rules.

5. Requirements for an SFC license

To help you get the license, our incorporation experts prepare a summary of what you need before applying. Each item is a foundation for smooth approval and long-term regulatory health.

These requirements below include, but are not limited to (Since each company must submit other documents based on their company activities, shareholding,  each depends on the SFC boards upon examination):

6. How to get your company's SFC license in 5 steps

• 1

  Step 1: Set up your Hong Kong company

• 2

  Step 2: Identify the regulated activities

• 3

  Step 3: Meet core requirements

• 4

  Step 4: Prepare and submit a strong application

• 5

  Step 5: Get approved and stay compliant

7. Is getting an SFC license worth it?

It should be pretty clear now: securing an SFC license in Hong Kong is complex, and it’s not necessarily the right move for every business immediately.

If you do not have 

• A well-defined, regulated-activity model;
• Qualified personnel and strong compliance structures;
• Enough resources for setup and ongoing obligations.

It may make sense to delay. For others, the risk of operating without a license or misinterpreting exemptions simply isn’t worth it.

For now, you should focus on validating your business model, building internal capacity, and ensuring you meet the core requirements.

When you’re ready, you can apply with confidence. Global Link Asia Consulting and our experts are here to support you. 

Global Link Asia Consulting will be your Hong Kong business partner, the one that helps you simplify complexity, reduce risk, and position your company for success from day one.

• Open a company in Hong Kong legally, fast with our one-stop support
• Get a reliable, experienced company secretary with our corporate secretarial service
• Support in opening your business bank accounts;
• Get an affordable, professional registered office address for your business;
• Support to open, authenticate, and manage Stripe and PayPal Business in Singapore, Hong Kong, and the U.S;
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

8. FAQs about declaring company dormancy

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