Starting A Business In Canada
How to Start a Business in Canada as a Foreigner
Expanding your business to Canada can be a strategic move for growth, but it requires understanding specific legal and regulatory frameworks. Whether you're planning to launch a new venture or expand an existing business, this guide covers all essential aspects of starting a business in Canada as a foreigner.
Can I Start a Business in Canada Without Citizenship or PR
Yes, you can start a business in Canada without being a citizen or a permanent resident. You can form a partnership with a Canadian resident or set up a corporation, but at least one of the directors must be a Canadian citizen or PR, as per the Canada Business Corporations Act.
Key Requirements:
- Partner with a Canadian citizen or PR for partnerships.
- For corporations, at least one director must be a Canadian citizen or PR.
What Are The Options for Foreign Entrepreneurs: Partnership vs. Corporation?
Partnership:
- Requires registration in the province or territory where you intend to operate.
- Must include at least one Canadian resident as a partner.
Corporation:
- Decide whether to incorporate at the federal or provincial level.
- Federal incorporation offers the ability to operate across Canada, but you still need to register in each province of operation.
Key Steps for Registration:
- Choose a business structure (partnership or corporation).
- Register with the provincial registry.
- If incorporating federally, ensure additional provincial registration.
Legal Business Formation
The business formation impacts how your business will function.
Business Formation Types
- Sole Proprietorship
- Partnership
- Corporation
- Co-operative
When our clients have to form a legal structure for their business our specialists, advise on options such as a sole proprietor, corporation, partnerships, and others, evaluating and choosing the best and most cost-effective option
Business Services
Some of the services our professional affiliates provide:
- Accounting professionals – these include CPAs, Bookkeepers and CFOs.
- Legal Professionals – Corporate, contract, employment lawyers
- Technology professionals – Web developers, database administrators, back-end developers, network and cloud engineers.
- Operation specialists – Logistic Companies, operation managers, and COOs
- Marketing specialists – Branding, design, and marketing campaign professional and agencies.
- Investment Professionals – Investment Bankers, Private Equity Funds managers, and Venture Capitalists
This approach allows our clients to get to the next phase quicker thus achieving so important competitive advantage. We often help clients to avoid costly mistakes and wasted time.
We don’t only supply recommendations to our clients but work with them every step of the process.
We do the work together, reducing the stress and load on our clients and take pride and responsibility in what we do.
Yes, you can start a business in Canada without being a citizen or a permanent resident. You can form a partnership with a Canadian resident or set up a corporation, but at least one of the directors must be a Canadian citizen or PR, as per the Canada Business Corporations Act.
Key Requirements:
- Partner with a Canadian citizen or PR for partnerships.
- For corporations, at least one director must be a Canadian citizen or PR.
What Are The Options for Foreign Entrepreneurs: Partnership vs. Corporation?
Partnership:
- Requires registration in the province or territory where you intend to operate.
- Must include at least one Canadian resident as a partner.
Corporation:
- Decide whether to incorporate at the federal or provincial level.
- Federal incorporation offers the ability to operate across Canada, but you still need to register in each province of operation.
Key Steps for Registration:
- Choose a business structure (partnership or corporation).
- Register with the provincial registry.
- If incorporating federally, ensure additional provincial registration.
Legal Business Formation
The business formation impacts how your business will function.
Business Formation Types
- Sole Proprietorship
- Partnership
- Corporation
- Co-operative
When our clients have to form a legal structure for their business our specialists, advise on options such as a sole proprietor, corporation, partnerships, and others, evaluating and choosing the best and most cost-effective option
Business Services
Some of the services our professional affiliates provide:
- Accounting professionals – these include CPAs, Bookkeepers and CFOs.
- Legal Professionals – Corporate, contract, employment lawyers
- Technology professionals – Web developers, database administrators, back-end developers, network and cloud engineers.
- Operation specialists – Logistic Companies, operation managers, and COOs
- Marketing specialists – Branding, design, and marketing campaign professional and agencies.
- Investment Professionals – Investment Bankers, Private Equity Funds managers, and Venture Capitalists
This approach allows our clients to get to the next phase quicker thus achieving so important competitive advantage. We often help clients to avoid costly mistakes and wasted time.
We don’t only supply recommendations to our clients but work with them every step of the process.
We do the work together, reducing the stress and load on our clients and take pride and responsibility in what we do.
Start Your Business In Canada
Can I Expand A Business Into Canada?
If you already operate a business abroad and want to expand to Canada, you need to register your business as an extra-provincial corporation in the province where you intend to operate.
Steps for Extra-Provincial Registration:
- Select a local agent for service.
- Register as an extra-provincial corporation in the desired province.
- Register separately for each province if operating in multiple regions.
Requirements:
- Local agent aged 18+ or a registered corporation in the province.
- Follow provincial guidelines for each region.
Business Immigration to Canada: Visa Programs
For those looking to both start a business and live in Canada, business immigration programs are available. Consider the Start-Up Visa Program or the Self-Employed Persons Program.
What Is Start-Up Visa Program:
- Ideal for innovative entrepreneurs with support from a designated organization.
- Must demonstrate business viability and potential for job creation in Canada.
What is Self-Employed Persons Program:
- Suitable for those with experience in cultural or athletic activities.
- Also applicable for those with farm management experience.
Key Requirements:
- Show relevant experience and potential to contribute to Canada’s cultural, athletic, or economic landscape.
- Demonstrate sufficient funds and language proficiency.
Key Considerations for Starting a Business in Canada
- Legal Structure: Choose between partnership, sole proprietorship, or corporation.
- Taxation: Understand federal and provincial tax obligations.
- Regulations: Comply with industry-specific regulations and licensing requirements.
- Hiring: If hiring non-Canadian workers, ensure compliance with work permit regulations.
Taxation for Foreign Business Owners in Canada
1. Overview of Federal and Provincial Tax Obligations: Foreign business owners must comply with both federal and provincial tax regulations. This includes corporate income tax, which varies by province, and filing annual returns to the Canada Revenue Agency (CRA).
2. Understanding Corporate Tax Rates and Filing Requirements: Canada's corporate tax rates vary between 15% and 31%, depending on the province and type of business. All corporations must file a T2 Corporation Income Tax Return annually.
3. GST/HST Registration and Compliance: Businesses with annual taxable sales over $30,000 must register for GST/HST. Compliance includes charging, collecting, and remitting GST/HST on taxable goods and services.
Legal Considerations for Foreign Business Owners
1. Overview of Canadian Business Laws: Canada has distinct business regulations covering incorporation, operations, and employment. Compliance is crucial to avoid legal issues.
2. Intellectual Property Protections and Registration: Register trademarks, patents, and copyrights to protect intellectual property rights. This prevents unauthorized use of your brand or inventions.
3. Importance of Legal Contracts and Agreements: Use legally binding contracts for partnerships, employment, and business transactions. These documents safeguard your business interests and outline obligations for all parties involved.
How to Start a Business as a Self-Employed Person
To apply as a self-employed person, you must have experience in athletics or cultural activities and be able to contribute significantly to Canadian society. This program also considers farm management experience.
Eligibility Criteria:
- Relevant work experience (at least 2 years).
- Intent to buy and manage a farm or significantly contribute to cultural or athletic life in Canada.
Additional Factors:
- Education, age, adaptability, and language proficiency are considered in your application.
FAQs: Starting a Business in Canada
Q1: Can I start a business in Canada without PR?
Yes, you can start a business without PR by forming a partnership with a Canadian resident or incorporating a business with at least one Canadian director.
Q2: What are the processing times for business immigration programs?
Processing times vary by program. The Start-Up Visa takes around 12-16 months, while the Self-Employed Persons Program can take 22-36 months.
Q3: Can I live in Canada if I start a business?
To live in Canada while operating a business, you must apply through a business immigration program, such as the Start-Up Visa or Self-Employed Persons Program.
Q4: What are the requirements for the Start-Up Visa Program?
You need support from a designated organization, a viable business plan, and must meet language and financial requirements.
Q5: How do I expand my business to Canada?
Register your business as an extra-provincial corporation in the province where you plan to operate and follow local registration requirements.
Q6: Can I start a business without a Canadian partner?
For sole proprietorships, no partner is needed. For partnerships and corporations, you may need a Canadian partner or director.
Q7: What are the tax obligations for foreign business owners in Canada?
You must comply with federal and provincial tax laws, including corporate tax, GST/HST, and payroll deductions.
Q8: How can I protect my business in Canada legally?
Ensure compliance with Canadian business laws, intellectual property protections, and contractual agreements.
The bottom line is if you are a non-Canadian who wants to start a business in Canada, you will either have to immigrate to Canada or find yourself a Canadian partner or two. If you want to live in Canada and operate your business, then your only way is through immigration.
Book A Consultation
This message is for informational purposes only. If you have any questions, please contact the immigration case manager with whom you work at Jane Katkova and Associates or send an email to support@katkova.com.
Jane Katkova – Brown
