TCSP AML Obligations Explained: Trust or Company Service Providers Under the Money Laundering Regulations

Company formation agents, corporate service providers, and firms offering registered office addresses often don't realise they've stepped into one of the most heavily scrutinised categories under UK anti-money laundering law: the Trust or Company Service Provider, or TCSP. If your firm offers any of the services below "by way of business", you are very likely a TCSP and carry a distinct set of obligations under the Money Laundering Regulations 2017, separate from the general AML duties that apply to accountants and other regulated professionals under CPD-relevant compliance training.

What is a Trust or Company Service Provider?

The Money Laundering Regulations 2017 define a TCSP by reference to the services it provides, not by its trade name or how it markets itself. A firm or sole practitioner qualifies as a TCSP if, by way of business in the UK, it provides any of the following to another person: forming companies or selling ready-made ("shelf") companies; acting, or arranging for another person to act, as a director, company secretary, partner in a partnership, or trustee of an express trust; providing a registered office, business address, correspondence address or administrative address for a company, partnership or any other legal person or arrangement; or acting, or arranging for another to act, as a nominee shareholder for someone other than a company listed on a regulated market.

Why TCSPs are treated as high risk

TCSPs sit at a structurally important point in the money laundering process because company formation, nominee arrangements and address provision are exactly the tools used to obscure beneficial ownership. HM Revenue & Customs' own guidance treats every TCSP relationship as a "business relationship" for AML purposes, regardless of how short-lived the engagement is expected to be — there is no such thing as a one-off, low-risk "occasional transaction" exemption for TCSP work, unlike some other regulated activities. That single point catches out newer entrants: even a single company formation for a client is enough to trigger full customer due diligence obligations.

Who supervises TCSPs

Every TCSP must be registered with an anti-money laundering supervisor before it starts trading. There are three routes: HMRC supervises TCSPs that aren't covered elsewhere, and is the default supervisor for standalone company formation agents and corporate service providers; the FCA supervises TCSP activity carried out by FCA-authorised firms; and a professional body listed in Schedule 1 of the 2017 Regulations — such as the ICAEW, ACCA or a recognised legal professional body — supervises TCSP services provided by its own regulated members, for example an accountancy firm that also offers company secretarial services to clients.

Registration and fit and proper checks

A business cannot lawfully carry on TCSP activity until its registration application has been processed and its beneficial owners, officers and managers (its "BOOMs") have passed HMRC's fit and proper test. This check looks at criminal convictions, particularly for dishonesty, money laundering and terrorist financing offences, and can also examine regulatory history. Operating as an unregistered TCSP, or continuing to trade while an application is pending beyond the permitted window, is a breach that can lead to civil penalties or criminal prosecution, and HMRC has taken enforcement action against TCSPs operating outside registration in recent years.

Ongoing compliance obligations

Registration is only the starting point. Once trading, a TCSP must apply full customer due diligence and KYC checks to every client relationship, verifying the identity of the client and, critically, identifying the beneficial owners of any company or trust it helps establish or administer. It must maintain a documented, firm-wide AML risk assessment that specifically addresses its TCSP activities, keep records of due diligence and transactions for the minimum retention period, and apply enhanced due diligence where a client, jurisdiction or structure presents elevated risk — complex offshore ownership chains being a classic trigger. Ongoing monitoring doesn't stop once a company is formed either: a TCSP acting as a registered office provider or nominee director has a continuing relationship with the entity and needs to keep monitoring it for as long as that service continues.

Frequently asked questions

Does a solicitor or accountant offering company formation automatically become a TCSP? Yes. TCSP status is triggered by the services provided, not the provider's primary profession, so a law firm or accountancy practice offering company formation or registered-office services is a TCSP for that part of its business, typically supervised via its professional body rather than HMRC.

Can a TCSP rely on due diligence carried out by another regulated firm? In limited circumstances firms can rely on due diligence performed by another regulated business, but the TCSP remains legally responsible if that reliance turns out to be misplaced.

How is TCSP supervision different from general AML supervision? It isn't a separate regime as such, but supervisors apply TCSP-specific guidance because the risk profile — company formation, nominee arrangements, address provision — differs materially from, say, a firm's audit or tax work.

What's the penalty for operating as an unregistered TCSP? Penalties range from civil fines to criminal prosecution, and HMRC can also require the business to cease TCSP activity immediately.