If your company is looking to expand into Canada, there are options as to how you go about structuring your business. The two most common structures are to operate in Canada via a branch or to incorporate a Canadian subsidiary.
A branch is not a separate legal entity, but is an extension under an already existing company operating in another jurisdiction. As a result, if you are choosing to operate as a branch in Canada, it would subject the US company to Canadian liability. In addition to this, your company will be subject to filing what can be a complex branch tax return in Canada and will require separate financial statements for said branch to be created.
Differences between using a branch versus Subsidiary Corporation in Canada
| Canadian Branch | Canadian Subsidiary Corporation |
| Foreign company may have liability in Canada for legal issues of the Canadian Branch | Foreign investor would have liability limited to the equity of the Canadian Subsidiary only (unless ULC is used) |
| Canadian sourced income tax in Canada | Worldwide income of the subsidiary only taxed in Canada |
| Branch tax is payable on after tax income no reinvested in Canada | Withholding tax is payable on dividends paid out to foreign parent company |
| Branch tax eligible may be eligible for foreign tax credit in your home country | Withholding tax may be available as a foreign tax credit in your home country |
| Interest on debts paid to foreign residents are deduced from the branch profits earned in Canada | Interest on debts owned to foreign residents may be limited due to the thin capitalization rules |
| Government incentives may only pertain to Canadian resident companies | |
| On audit, information request should be limited to the Canadian company |
Company Formations offers Subsidiary registration or branch registration for foreign companies wishing to operate in Canada for only $2200 (All Inclusive.)
Company Registration Fees:
$2200 (All Inclusive)
Our Canada Company Registration 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 Company Registration service for foreign companies, please contact us using the form below:
