Foreign Companies Establishing a Business in Canada

One of the threshold issues for a foreign entity to consider when seeking to establish a business in Canada is what form the business should take. The form selected should reflect both operational and tax considerations. The foreign entity will need to determine whether that business should be carried on directly, as a branch of the foreign entity, or should be created as a separate Canadian business organization, such as a subsidiary corporation (with either limited liability or, in some provinces, unlimited liability). Still, other business forms include a proprietorship, a partnership (which may be a general partnership or limited partnership, or possibly a limited liability partnership), and various forms of the joint venture. Additionally, the foreign entity can acquire an existing Canadian business or an interest in such a business. Generally speaking, a foreign entity may carry on business directly in Canada through a branch but will be subject to the same sort of federal and provincial registration requirements that would apply to a corporation.

No matter the form of entity, any foreign company seeking to do business in Canada will need to register in every jurisdiction in which it will carry on business. Depending on its type, the business may be subject to further registration, licensing and reporting obligations.

Benefits of Doing Business in Canada

Strong geographic and sectoral clusters (e.g. aerospace, automotive, biomedical, digital media, agrifood)
One of the soundest banking systems in the world
Diverse, confident, creative, entrepreneurial people
Low statutory and marginal effective tax rates for businesses

Canada is the best country for global investment. Period.

Establishing a Branch or Subsidiary

A number of issues should be considered in choosing whether to operate as a branch or as a subsidiary. If the Canadian operation is expected to incur significant losses in its early years of operation, the foreign entity may wish to carry on business in Canada directly through a branch in order to deduct those losses for foreign tax purposes, if possible. A Canadian branch structure might also enable better matching of the Canadian corporate tax paid with the foreign tax credits available in the home jurisdiction.

Many foreign investors prefer to carry on business in Canada through a Canadian subsidiary. A subsidiary is more convenient for administrative purposes and can make the process of contracting in Canada simpler. Operating through a Canadian subsidiary generally limits the liability of the foreign parent corporation to its capital investment in the Canadian subsidiary. A foreign parent corporation conducting business through a branch office is directly responsible for liabilities of the Canadian operation.

Canada Company Registration for Non-Canadian Residents and Foreign Companies

Canada Incorporation for Non-Canadian Residents. Throughout Canada, corporations are the most widely used legal vehicle for operating a business. A corporation has the same rights and obligations under Canadian law as a natural person. Among other things, this means it can acquire assets, go into debt, enter into contracts, sue or be sued, and even be found guilty of committing a crime.

Benefits of Doing Business in Canada

  • An abundance of seed capital
  • Access to a variety of government grants and tax credits
  • Access to great technical talent
  • A low cost of living
  • A favorable exchange rate
  • An abundance of entrepreneurial talent

To incorporate a new company in Canada., one or more persons(called “the incorporators”) may form a company by filing articles of incorporation, notice of address and notice of directors with the Corporate Registry Office of the desired jurisdiction of registration.

Ecompanies Canada offers fast & easy Canada online incorporation and business registration services to Non-Canadian Residents interested in doing business in Canada.

At Ecompanies Canada we help you step-by-step and take care of the entire business registration process from start to finish. Incorporating a business with us is fast, easy and takes just minutes.

Canada Incorporation Service Fees:

$2200 (All Inclusive).

Our Service Includes:

  • Canada Name Search Report
  • Canada Registered Agent Service
  • Canada Government Fees
  • Taxes
  • ECompanies Service Fees
  • Company ByLaws
  • Company Minute Book

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