Canada company registration

DOING BUSINESS IN CANADA IN 2018

Since 2003, Healy Consultants Group PLC has assisted our Clients who are residents as well as foreigners with starting their company in Canada. Our services include i) Canada foreign business registration ii) assistance to license the company iii) corporate bank account opening services in Canada and abroad iv) employee recruitment v) visa strategies and vi) office rental solutions.

Summary table of Canada company registration

SummaryLLCLLPRepresentative officeBranch officePLC
Also known asPrivate corporationLimited Liability PartnershipRepresentative officeBranch officePublic corporation
Best use of company?All purposesProfessional servicesMarketing & researchSpecific projectsExchange listings
How soon can you invoice Clients\sign sales contracts?3 weeks3 weeksCannot4 weeks4 weeks
How soon can you hire staff?5 weeks5 weeks5 weeks6 weeks6 weeks
How soon can you sign a lease agreement?3 weeks3 weeks3 weeks4 weeks4 weeks
Corporate tax rate on annual net profits?31%0031%31%
Legally tax exempt if properly structured?NoYesYesNoNo
Government grants available?YesYesNoYesYes
Resident director/partner/manager required?YesNoYesYesYes
Minimum paid up share capital?$1$2NoneNone$1
Can bid for Government contracts?YesYesNoYesYes
Corporate bank account location?BMORBCScotia bankTDBCIBC
Can secure trade finance?YesNoNoYesYes
Limited liability entity?YesYesNoNoYes
Average total engagement costs?US$12,100US$12,500US$12,100US$13,100US$12,100
Average total engagement period?12 weeks12 weeks12weeks13 weeks13 weeks

See full table

Accounting and tax considerationsLLC LLP Representative officeBranch officePLC
Must file an annual tax return?YesYesYesYesYes
Access to double taxation treaties?YesYesNoYesYes
This entity enjoys Government incentives?YesYesNoNoYes
Company RegistrationLLC LLP Representative officeBranch officePLC
Minimum number of shareholders/partners?12Parent companyParent company1
Minimum number of directors/managers?12113
Shelf companies available?YesNoNoNoNo
Time to incorporate a new entity?3 weeks3 weeks4 weeks4 weeks4 weeks
Can easily convert to a PLC?YesNoNoNoYes
Public register of shareholders and directors?YesYesYesYesYes
Can have preference shareholders?YesYesNoNoYes
Business ConsiderationsLLC LLP Representative officeBranch officePLC
Restrictions on nature of business activitiesNoneYesYesYesNone
Good entity for trademark registration?YesYesNoNoYes
Can secure an import and export license?YesNoNoYesYes
Group HQ tax incentives?YesYesNoNoYes
Must file annual financial statements?YesNoYesYesYes
Must appoint an independent statutory auditor?NoNoNoNoYes
Withholding tax on payments to parent company?Up to 25%Up to 25%Up to 25%Up to 25%Up to 25%

The entity will likely be regulated by?CRA
Travel required for business setup?No
Travel required for bank account opening?No
What will be included in my customer sales invoice?Read more
This country has signed free trade agreements?Yes
This country is a member of WIPO/TRIPS?Yes
This country is a member of the ICSID?Yes
Average customs duties suffered?0.032
Government foreign investment approval required?No
Average monthly office rental? (US$ per sq m)40
Average hourly CAD$ salary for local skilled employees?26
CAD$ deposit interest rate? (1 year average)0.013
US$ deposit interest rate? (1 year average)0.01
Overseas remittance currency controls?No
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?High
Crowd funding available in this country?Yes
Can be wholly foreign ownedYes
GST payable on sales to local customers?5%
Withholding tax on payments to shareholders?Up to 30%

Canada business setup summary

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  • Advantages and disadvantages

    Advantages of Canada company registration

    Canada business advantage

    1. It is easy for foreigners to start a business in Canada as only i) one shareholder and ii) one director are required to establish the company. There is also no restriction on their nationality and the minimum paid-up capital for registration of a Canadian company is only US$1 (CAD1);
    2. Our Clients often choose to start their subsidiary company in Canada to access foreign markets because:
      • A company registered in Canada and exporting locally manufactured products and services to the United States and Mexico can do so free of custom duties, thanks to the North American Free Trade Agreement (NAFTA);
      • Such advantage allow Canadian businesses to tap into a market representing i) 480 million people and ii) an aggregate value of USD21,000 billion, the second largest in the world after the European Union;
      • Canada has also signed 15 free trade agreements with over the quarter of the world countries. Local companies hence benefit from the 13th largest foreign market size in the world according the World Economic Forum;
      • Our Clients running a company in Canada will also be able to use excellent infrastructure to sell their products and services abroad: local road, railroad and maritime networks are ranked amongst the 25 best in the world;
      • For all the reasons listed above, the World Bank ranks Canada as the 44th best place to trade across borders.
    3. Our Clients running their business in Canada will pay lower taxes than they would elsewhere because:
      • The federal tax rate for Canadian-controlled small businesses only reaches 11% thanks to the small business deduction. Corporate tax rates payable at the provincial level are in a range of 3% to 16%;
      • Business setup in Canada also confers certain tax benefits: losses can be carried forward up to twenty years. It is also possible for a shareholder to defer some personal income tax by retaining earnings at the company level;
      • Canada has 95 double taxation avoidance treaties currently in force with countries including i) the United States ii) Australia iii) Singapore iv) the United Arab Emirates v) India vi) Germany vii) France viii) Russia and ix) the UK. These treaties provide several advantages to reduce withholding tax payable after Canada business formation;
      • For all the reasons listed above, Canada is ranked by the World Bank as the 9th best country in the world for its tax system. Total taxation over a business’ earning only averages 21%, to be compared with 41% amongst OECD countries.
    4. Forming a company in Canada also confers the following advantages:
      • It is easy to open corporate bank accounts all over the world for a Canadian company;
      • It is possible to obtain employment and entrepreneurial visas for yourself and your staff after Canada business setup.
    5. Canada is one of the most cost competitive countries; the cost of operations is less than in the US, UK, Australia, Germany or Japan;
    6. It is also the second most attractive destination for businesses involved in digital services, R&D services, corporate services, and manufacturing.

    Disadvantages of Canada company registration

    1. All Canadian companies have to appoint at least one resident director. If needed, Healy Consultants can provide our Clients with nominee services for Canada director. Kindly refer to this resident director page for further details;
    2. Companies for which over 50% of the voting shares are held by non-residents are subject to higher corporate tax rates, which can reach up to 36% depending on the province of incorporation;
    3. Canada is highly dependent on its natural resources, therefore if commodity prices fall, economic activity reduces in trade-dependent provinces;
    4. The global demand for Canadian exports has a huge impact on the strength of the Canadian dollar. Consequently, currency spikes can be challenging for most businesses to deal with.
  • Compare Canadian states

Company registration

  • Time to incorporate: Three weeks
  • Cost to set up: US$12,100
  • Minimum capital: US$1
  • Physical office required: No

Required appointments

  • Shareholders: 1
  • Directors: 1
  • Company secretary: No
  • Resident director: Yes

Key facts

  • Corporate tax rate: 31%
  • Corporate tax base: Worldwide
  • Shelf companies: Unavailable
  • Main company type: Limited company

Select corporate structure
Business set up guide
Resident director services
Business set up strategy
Trademark registration
Compare similar North American countries
Visa and migration options

Contact us

For additional information on our company registration services in Canada, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly: