Options for Foreign Corporations Wishing To Operate and Do Business in Canada. There are two main options for foreign companies to register their companies in Canada. The first option is through the registration of a Canadian branch (extra-provincial registration) or the incorporation of a Canadian subsidiary (Brand new corporation).
Registering a Branch in Canada
The registration of a Branch in Canada permits foreign corporations to operate and o business in Canada. The registration of a branch in Canada is done by filing an extra-provincial registration application in the province or provinces in which the foreign business proposes to operate. The foreign company will need to register extra provincially in each of the provinces where it intendeds to operate and do business.
In order for a foreign company to register a branch in Canada, a registered Canadian address and a Canadian resident attorney/agent for service are required, so that the corporation has local representation in order to receive the service of documents and to deal with the corporate registry matters locally.
Company Formations Canada offers registered Canada registered agent service and office services throughout all Canada.
Tax Implications of registering your foreign company in Canada as a Branch
- Income resulting from Canadian operations is taxable in Canada.
- When computing taxes in the country of residence, losses may be offset against income. Losses may be carried back 3 years and carried forward 7 years against income earned in Canada by the Canadian branch.
- Branch tax is normally payable annually on any after-tax profit not reinvested in Canadian property.
- If the branch is taxable, foreign jurisdictions may give credit for Canadian income and branch taxes paid.
- Branch tax which was previously deferred is payable upon the discontinuance of business, except for dividends on certain reorganizations that involve the formation of a Canadian subsidiary.
- Licensing fees must be paid in provinces where a branch is established and the corporation operates. Apart from extra-provincial registration fees, no incorporation fees need to be paid.
- Rules for allocating income may vary by jurisdiction, creating problems that affect tax credits
- Interest, royalties and like expenses which are paid to non-Canadian residents and are deducted when determining Canadian branch profits may be subject to a withholding tax (unless reduced by treaty)
- The depreciation of fixed assets is calculated at Canadian rates in order to determine Canadian taxable income. Foreign rates may govern in the foreign jurisdiction. This may create timing issues or other problems with claiming credit for Canadian taxes paid.
Register Today Your Foreign Company in Canada as a Branch
Company formations offer fast & easy Canada company registration for foreign companies wishing to operate an do business in Canada. The total fees for the registration of a branch in Canada are $2200 CAD.
Information and documents needed:
The information and documents required to register a foreign company in Canada as a branch are:
- Company name
- Company Address
- Jurisdiction of Incorporation
- Date of Incorporation
- Names and addresses of the directors of the corporation
- Copy of the certificate of incorporation
- Copy of the articles of incorporation
- Certificate of Good Standing
Branch registration Fees
The total fees for the registration of a branch in Canada are $2200 CAD
What our Canada Branch Registration Service Includes:
- Provincial name search report or NUANS Report request
- Preparation of the extra-provincial registration application
- Provincial Registered agent service for 1 year
- Filing of your extra-provincial registration application
- Government fees
- Taxes
Registering a Subsidiary in Canada (Brand new company)
Most non-resident investors prefer to incorporate a subsidiary chiefly because a subsidiary allows for a division of liability between the Canadian operation and the foreign operation. A subsidiary is simply a Canadian corporation whose controlling or sole shareholder is another corporation.
An incorporated subsidiary of a foreign corporation is entitled to many of the same rights as a Canadian-owned corporation, such as limited liability.
Foreign corporations have the option of incorporating a subsidiary at a federal level or a provincial level.
Tax Implications of registering your foreign company in Canada as a Subsidiary
Income resulting from worldwide operations is taxable in Canada.
Losses are not generally deductible by the parent. Losses may be carried back 3 years and carried forward 7 years against income earned in Canada by the Canadian subsidiary.
Withholding tax is normally payable annually on any after-tax profit distributed as dividends to non-Canadian shareholders.
Foreign jurisdictions may give credit for withholding tax on interest and dividend payments. Some countries may also provide extra relief for the underlying foreign taxes paid on income earned in Canada.
Withholding tax is payable on deemed dividends resulting from the discontinuance of the company.
In provinces where the subsidiary does business other than the province of incorporation, incorporation fees must be paid and licensing fees generally must be paid.
The deductibility of interest on debts owed to non-Canadian residents may be limited.
The depreciation of fixed assets is calculated at Canadian rates in order to determine Canadian taxable income.
Register Today Your Foreign Company in Canada as a Subsidiary (Brand New Company)
Company formations offer fast & easy Canada company registration for foreign companies wishing to operate an do business in Canada. The total fees for the registration of a subsidiary in Canada are $2200 CAD.
Information and documents needed:
The information and documents required to register a new company in Canada as a subsidiary are:
- Proposed Company name
- Proposed Business activity in Canada
- Company Address in Canada (If any)
- Jurisdiction of Incorporation
- Names and addresses of the directors of the corporation
Subsidiary registration Fees
The total fees for the registration of a subsidiary in Canada are $2200 CAD
What our Canada Company Registration Service Includes:
- Provincial name search report or NUANS Report request
- Preparation of the incorporation application
- Provincial Registered agent service for 1 year
- Filing of your incorporation application
- Government fees
- Taxes
