Hong Kong DPMS Precious Metals & Stones License Guide

I. Hong Kong’s Three-Pillar Precious Metals Regulatory Architecture: Customs DPMS vs. HKGX vs. SFC

In cross-border bullion trading, jewelry supply-chain settlement, and financial due diligence, market participants frequently conflate different "Hong Kong precious metals licences." Under Hong Kong law, precious metals and stones activities are governed by three distinct regulatory frameworks depending on the nature of the underlying instrument (physical commodities vs. exchange spot contracts vs. securitized derivatives):

II. Statutory Definitions under Cap. 615 Part 5B: Four Regulated Articles & Six Dealing Activities

Determining whether a Hong Kong entity requires Customs DPMS registration entails evaluating two statutory dimensions under Sections 53ZTY and 53ZTZ of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)^[1]:

2.1 Four Statutory Categories of Regulated Articles (Including the "50% Value Attribution Test")

• 1. Precious Metal (Section 53ZTY): Covers gold, silver, platinum, iridium, osmium, palladium, rhodium, or ruthenium in a finished or unfinished state, provided the metal fineness meets statutory weight thresholds (e.g., ≥375 parts per thousand [9-karat or above] for gold; ≥800 parts per thousand for silver; ≥850 parts per thousand for platinum). This encompasses investment bullion bars, industrial gold granules, silver ingots, platinum sheets, and precious metal scrap recovery.
• 2. Precious Stone (Section 53ZTY): Covers diamond, sapphire, ruby, emerald, jadeite (Fei Cui), or pearl. Crucially, the statute explicitly covers these stones whether natural, man-made/synthetic (including lab-grown CVD/HPHT diamonds), or reconstructed.
• 3. Precious Product ("50% Value Attribution Test"): Any jewelry, watch, apparel, accessory, ornament, or utensil made up of, containing, or having attached to it any precious metal or precious stone, where at least 50% of its transaction value is attributable to the precious metal and/or precious stone content. For instance, a stainless-steel luxury mechanical timepiece whose value derives primarily from horological craftsmanship and brand equity (<50% metal/stone material value) is not a "precious product"; conversely, an 18K solid-gold watch or diamond-paved timepiece where precious materials account for ≥50% of the price falls squarely under DPMS regulation.
• 4. Precious-Asset-Backed Instrument (PABI): Any certificate, voucher, digital gold passbook, warehouse warrant, or instrument (excluding Cap. 571 securities/futures or virtual assets) that entitles the holder to redeem or extract physical precious metals, precious stones, or precious products.

2.2 Six Statutory "Dealing in" Activities (Section 53ZTZ)

Any person who, by way of business in Hong Kong, conducts any of the following activities is deemed to be "dealing in precious metals and stones" and must register with Customs:

1. Trading: Selling, offering for sale, buying, or offering to buy precious metals, precious stones, or precious products;
2. Import & Export: Importing into or exporting from Hong Kong precious metals, precious stones, or precious products for the purpose of sale or resale (pure logistics carriers, airlines, shipping lines, and armored vault couriers transporting goods without taking title are exempted under s. 53ZTZ(2));
3. Manufacturing, Refining & Setting: Manufacturing, refining, smelting, casting, polishing, cutting, carving, or setting precious metals, precious stones, or precious products for sale;
4. Issuing or Redeeming PABIs: Issuing, redeeming, or trading precious-asset-backed instruments;
5. Intermediary & Brokerage Services: Acting as an agent, buying office, auction house, or intermediary for any of items 1 to 4 above;
6. Scrap Gold Buyback & Liquidation: Acquiring second-hand gold jewelry, scrap karat gold, or loose diamonds from the public for smelting or resale.

III. Category A vs. Category B Registrants & The HK$ 120,000 Cash Rule Explained

The cornerstone of Hong Kong’s DPMS framework is its risk-based two-tier registration system. According to live data synchronized on 86hc.com from the official Customs register, out of 11,737 active registered dealers in Hong Kong, 10,991 entities (93.6%) hold Category A registration, while 746 entities (6.4%) hold Category B registration^[2].

IV. Official Customs DPMS Forms (`Form DRSF1`–`DRSF7`) & Schedule 3G Fee Matrix

Applications for DPMS registration can be submitted electronically via the Hong Kong Customs Dealers in Precious Metals and Stones Registration System (www.drs.customs.gov.hk) using iAM Smart or a corporate digital certificate, or filed in paper form with the C&ED Precious Metals and Stones Supervision Bureau at Unit 3501, 35/F, Skyline Tower, 39 Wang Kwong Road, Kowloon Bay^[2][3].

4.1 Statutory Application & Post-Registration Filing Forms Matrix

4.2 Statutory Government Fee Schedule (Cap. 615 Schedule 3G)

V. Physical Premises Vetting, Co-Working Space Consent & Certificate Display Mandates

Unlike ordinary offshore trading companies that merely use a corporate secretary’s registered office address, Hong Kong Customs enforces strict verification on the business premises of DPMS registrants:

• 1. Genuine Hong Kong Address Matching the BRC: Every business premises declared on Form DRSF1 (headquarters, retail shops, showrooms, vaults, or workshops) must be covered by a valid Business Registration Certificate (BRC) or Branch BRC, supported by a stamped tenancy agreement and a utility or government rates bill issued within the past 3 months. P.O. Boxes and pure mail-forwarding virtual addresses are rejected as standalone operational premises.
• 2. Domestic Premises & Co-Working Space Inspection Consent (Section 53ZUI): Authorized Customs officers possess statutory authority to enter registered business premises at reasonable times to inspect records and stock. Where an applicant operates from domestic/residential premises or a shared office / co-working space, Customs requires signed written consent from the landlord and all co-occupiers explicitly permitting C&ED officers to enter the premises for statutory inspections.
• 3. Pure Online / E-Commerce Jewelry Dealers: Entities selling precious metals or jewelry exclusively via websites, social media, or cross-border e-commerce platforms without a brick-and-mortar shop must register their Hong Kong back-office premises where orders and accounting records are maintained, and must prominently display their Customs DPMS Registration Number (A-B-xx-xx-xxxxx or B-B-xx-xx-xxxxx) on their official website or online storefront.
• 4. Mandatory Display of Original Certificate (Section 53ZUV): Every registered dealer must display the original Certificate of Registration in a conspicuous place at its principal premises, and the original Branch Certificate (T01, T02) at each branch location. Failure to display is a criminal offence punishable by a Level 5 fine (HK$ 50,000).

VI. Benchmark Hong Kong Precious Metals & Jewelry Corporations: Verified DPMS Profiles on 86hc

To illustrate how Customs DPMS registration tiers align with statutory records at the Companies Registry (CR), our compliance desk extracted 5 flagship Hong Kong precious metals and jewelry entities from the 11,812 official records indexed on 86hc.com (click any corporate name to inspect its live CR profile and barcoded Form NAR1 filings):

VII. Corporate Bank Account Opening (HSBC / OCBC Bullion Desk), Customs Declarations & Counterparty KYB

Because physical gold, silver, and diamonds carry heightened trade-based money laundering (TBML) and sanctions evasion risks, tier-1 commercial banks in Hong Kong—including HSBC Hong Kong and OCBC Bank Hong Kong—classify Precious Metals, Watches & Jewellery as a High-Risk Restricted Sector. Any Hong Kong company whose name or business scope involves gold, bullion, diamonds, or jewelry typically faces severe compliance red flags and elevated rejection risks unless it presents an authentic Customs DPMS Certificate of Registration during account opening.

7.1 Four Mandatory Pillars for Precious Metals Corporate Bank Account Approval

1. Obtain Customs DPMS Registration Prior to Bank Onboarding (Category A Option for B2B Wholesale): Newly incorporated bullion or diamond trading entities may evaluate applying for Category A Registration (HK$ 260 application fee, where the statutory vetting procedure is relatively straightforward and efficient), presenting the original DPMS Certificate during bank KYC onboarding.
2. Execute a Formal "No-Large-Cash Undertaking": Explicitly declare to the bank’s EDD (Enhanced Due Diligence) team that all precious metals and diamond transactions are settled via institutional bank wire (TT / CHATS) or Letters of Credit (L/C) without handling physical cash over the counter.
3. Maintain Closed-Loop Cap. 60E Import/Export Declarations & Kimberley Process Certificates: While gold bullion and jewelry enjoy zero customs tariff in Hong Kong, under the Import and Export (Registration) Regulations (Cap. 60E), any person importing or exporting gold (bars, ingots, coins) or rough diamonds (which additionally require a Kimberley Process Certificate from the Trade and Industry Department) must lodge an accurate Import/Export Declaration within 14 days. Banks routinely audit the four-way match between Purchase/Sales Contracts + Commercial Invoices (specifying fineness & troy ounces) + Armored Carrier Air Waybills (e.g., Brink's / Malca-Amit) + Hong Kong Customs Import/Export Declarations.
4. Furnish Practising CPA Certified True Copies (CTC): Cross-border bullion financing, LBMA counterparty onboarding, and institutional bank KYB require Certified True Copies (CTC) of the Certificate of Incorporation (CI), Business Registration Certificate (BRC), latest Annual Return (Form NAR1), Articles of Association (A&A), and Customs DPMS Registration Certificate issued by a Hong Kong Practising CPA (AFRC regulated) or Hong Kong Solicitor.

7.2 Counterparty KYB Forensics: Screening the 26 "Dissolved in CR but DPMS Active" Anomalies

Never wire advance bullion deposits or consign diamonds based solely on a PDF screenshot of a Customs DPMS certificate! Through 86hc.com’s real-time cross-audit between the Companies Registry (ICRIS) and the Customs DPMS Register, our Risk Radar identified 26 high-risk anomalous entities (DISSOLVED_STILL_LICENSED)—corporations that have already been officially dissolved or deregistered at the Companies Registry (stripping them of legal personality and freezing their bank accounts), yet remain listed on the Customs DPMS register because their former directors failed to file a Form DRSF7 cessation notice under Section 53ZUX.

4-Step Counterparty KYB Verification Protocol:

1. Step 1 (Verify DPMS Tier & Cash Authority): Search the counterparty on the 86hc Customs DPMS Directory by company name, 8-digit BRN, or Registration Number (A-B-... / B-B-...). Confirm active status—and if your transaction involves ≥HK$ 120,000 in physical cash, verify that the dealer holds Category B Registration;
2. Step 2 (Verify Companies Registry Live Status): Open the entity’s corporate dossier on 86hc to confirm its statutory status at the Companies Registry is "Live (Still Registered)" and not flagged under the 26 dissolved anomalies;
3. Step 3 (Retrieve Barcoded Form NAR1 & Form ND2A): Order the latest official Annual Return (Form NAR1) and Notice of Change of Company Secretary and Director (Form ND2A) to verify that the individual signing your bullion contract is an active statutory director and inspect paid-up share capital;
4. Step 4 (Screen High Court Writs & Winding-Up Petitions): Run a 7-Tier Court Litigation & Compulsory Winding-Up (HCCW) Search to verify the dealer is free from active commercial debt defaults or insolvency proceedings, effectively mitigating counterparty and fund freeze risks.