Business Formation in Canada by Non Canadian Residents

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 a 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.

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.

Company Formations provides fast and easy Company Registration in Canada for non-Canadians residents and provides all the documents your new Canada corporation will need to stay up-to-date and in compliance with your province of registration corporations law.

Incorporation Fees:

$2200 (All-Inclusive)

Our Canada Incorporation Service includes:

  • Name Search Report
  • Preparation of Articles of Incorporation and Incorporation Documents
  • Incorporation Agreement
  • By-Laws, Company Minute Book, Share Certificates
  • Canada Registered Agent Service for 1 year
  • Government Fees
  • Our Service Fees
  • Original Certificates
  • Copy of Documents in PDF
  • Taxes

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For more information about our Canada Corporations for non-Canadians, please contact us using the form below:

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