Business Opportunities in Canada
Canada is a developed country with a well-educated and skilled workforce, modern infrastructural facilities, an organized justice system, and a robust tax regime. Furthermore, its proximity to the United States (US) has bolstered its economic prospects.
Starting a business in Canada is a step in the right direction for every organization. The progressive economy, strong business policies and healthy relationships with major countries have motivated businesses to explore Canada.
Benefits of Starting a Business in Canada
Whether you are an entrepreneur thinking of setting up a company in Canada or an investor looking for profitable opportunities, Canada can provide numerous options. With the array of multinational companies establishing their grounds on Canadian soil and its proximity to the expansive US market, Canada has several advantages as a business destination. This guide will help you take the next steps while setting up a company in Canada.
Following are the major advantages of starting a business in Canada:
- Low corporate taxes
- Stable economic condition
- Well connected with 18 airports and 550 ports
- Close ties with the US
- Skilled workforce
- Multicultural ethnicity
Furthermore, the modern cities, peaceful and clean ambiance, and impressive standard of living make Canada a coveted place for families. The country has been projected as a business location that promises steady growth in the coming years because it has come out strong after the massive financial crisis of 2008.
Canada’s access to both the US and Latin America under the United States-Mexico-Canada Agreement (USMCA) gives the country the largest free trade area in the world. Additionally, this is perfect for entrepreneurs to tap into the resources of the other two countries while operating from Canada.
Requirements for Starting a Business in Canada
You have to fulfill the given requirements to start a business in Canada:
Choose the business structure:
The inaugural step of any business to establish its presence in a country is to finalize a business structure. You can register as a sole proprietorship, corporation, subsidiary, partnership, branch operations, or joint venture in Canada. It is important to get expert help in this step as it decides the tax structure and other benefits which will prove crucial to your business.
Name the company:
The next thing when contemplating a business to do in Canada is the name you would like to give your company. Choose a unique and professional company name for faster approval from Corporation Canada.
Draft the articles:
The articles of incorporation establish the business structure. A typical incorporation article contains information like the number of shares (one or two classes), number of directors, and the corporate name. You may amend the articles by incorporating the share structure, any limitations you wish to impose, and any other provisions. The articles have to be in either of the official languages of Canada – English or French.
Register your business:
The next step involves the company registration process in Canada. To register your company with the government, you need to decide on the primary location of the office that would be registered for your business.
Apply for permits and licenses:
Whichever business entity you choose to opt for, it is necessary to have the appropriate legal license.
Submit the fee and look for financial support:
The cost of incorporating a company in Canada is relatively high. Hence, you may contemplate looking for financial support and choose from the array of programs offered by the Canadian government for regional and immigrant initiatives. The fee for filing the incorporation documents is 200 Canadian dollars online and 250 Dollars for paper mode.
Timeline for business registration:
Registering a business in Canada takes about 5 to 7 business days. It is not cumbersome and can be done via mail, online, or in person. After the registration, you can obtain the license typically within 35 days.
Types of Business Structures in Canada
Before attempting to start a business in Canada, it is essential to know the correct type of business entity for you. Every business entity comes with its share of advantages and disadvantages.
Thus, it is vital to weigh the pros and cons by evaluating your specific business objectives, tax benefits, liabilities, and scope of business activity before plunging into the company registration process in Canada. The various types of business entities in Canada are:
Key considerations for choosing the legal structures:
- Nature of the business
- Number of owners
- Investment Capital
- Risk appetite and liabilities
- Long term plans for the business
Company Registration Process
The easy availability of technology and sound workforce make Canada a popular business hub. The following are the essential requirements to do business in Canada:
- Planning: Developing business ideas, making conclusive plans as to location, type of business, structure, and budget.
- Finalize a company name
- Register with the authorities
- Apply for permits
- Register the official address: Deciding on, establishing, and registering the initial official address.
- Board of Directors: Decide on the Board of Directors and check the eligibility criteria to understand who can form the Board.
- Pay the relevant fee
Note: The legal procedures and cost of incorporating a company in Canada differ between states. Therefore, it is imperative to be aware and updated about all the rules and regulations.
How Much Does it Cost to Incorporate a Company in Canada?
The cost of company registration in Canada varies from one province to another. For instance, a partnership or a sole proprietorship business in Ontario costs $60 to $80, and an additional $8 to $26 for name searches.
However, in British Columbia, it costs $31.50 for a name request number and $40 for registering your sole proprietorship or partnership. In addition, incorporated companies are charged $350 for the registration process.
Are Foreigners in Canada on Certain Passes Allowed to Start a Business in Canada?
Foreign business owners wishing to expand their venture in Canada must set up a legal office and get relevant permits. They can opt for the following passes to conduct business operations in Canada:
Entrepreneur work permit
To be eligible for an Entrepreneur Work Permit, you must own at least 50% shares in a Canadian business. Plus, you must prove that your business will contribute to the country’s economic progress while creating jobs for local Canadians. After one year of successful operation, you can apply for Canada’s Permanent Residency (PR).
Existing business owners can set up another business in Canada by applying for this program. It would be best to manage the expanded business for a year before becoming eligible to apply for permanent residency.
Provincial nominee program
Entrepreneurs can enter Canada via this program in British Columbia and Ontario. The PR eligibility opens up after your business completes a year and creates suitable local employment opportunities.
Government Assistance for Foreign-owned Businesses
Canada is a developed economy based mainly on its service sector industry. It ranks 3rd among the countries which pose themselves as business-friendly.
Despite the hard-hitting pandemic, the Canadian government has ensured a secure environment for business owners looking to set up a company in Canada. They have access to interest-fee loans, rent relief (under certain conditions), and 10% wage subsidies apart from other benefits.
How Can Multiplier Help?
You may find it taxing and time-consuming to hire personnel as your business expands. In this case, partnering with an external service provider can help you seamlessly operate your business. Partnering with a global employment solution partner will help you expand your business in multiple countries and help you stay abreast with the country’s laws and regulations.
With Multiplier as your partner, you can easily onboard and pay your employees while complying with local labor laws during the procedure for incorporation of a company in Canada.