Starting a business in Canada for foreigners or opening a branch office in Canada is possible, however, there are requirements to be met. There are diverse laws to be followed, depending on the business you have in mind, and the province you want the business to operate from.
Canada does not have an equivalent to LLC (Limited Liability Company) that is operated in the U.S. For foreign investors looking to register a Canadian business, Canada has four entity types in place, these are Partnership, Corporation, Sole Proprietorship, and Cooperative.
You need to satisfy a residency requirement by providing a Canadian address when starting a business in Canada for foreigners or opening a branch office in Canada. This may imply immigrating to Canada or partnering with a Canadian citizen. When you’re planning on starting a business in Canada for foreigners or opening a branch office in Canada, you should first decide if you want to be a resident business owner or a non-resident business owner because a Canadian address is an important requirement.
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Starting a business in Canada for foreigners–how to qualify.
If you wish to live and start a business in Canada, you could apply for the business immigrant program. Also, there are two programs that may interest you. First, a start-up visa program and a self-employed persons program listed on the Citizenship and Immigration Canada.
If you wish to take part in the start-up visa program, you must:
- Have a qualifying business.
- Have a letter of support from one of these organizations (venture capital groups, angel investors, or business incubators).
- Ensure to meet the language requirements (proficiency in English or French).
- Have enough money to settle and live in Canada before your business makes a profit.
Now, moving to Canada as a self-employed person, you must have:
- Experience in cultural activities or athletics and preparedness to make significant contributions to the cultural life of Canada.
- The other factors to consider before opening a branch office in Canada or starting a business in Canada for foreigners are education, age, adaptability, and you must be able to speak, understand, read and write English or French proficiently to qualify for Canada.
If you wish to live in Canada permanently and operate your business, the only possible way is to immigrate to Canada.
In Canada, you can either incorporate your business federally or provincially. It is of utmost importance to understand the advantages and disadvantages of each form of incorporation, as well as the required procedures.
“Foreign investors need to be aware of the residency requirements imposed on the directors of companies incorporated in Canada. The federal statute requires that 25 percent of the directors be residents in Canada. In case there are fewer than four directors, then the CBCA (Canada Business Corporations Act) requires that one director be resident in Canada. Each province has different residency requirements and an investor wishing to incorporate in Canada should consider this issue. For example, some provinces do not impose residency requirements for directors (e.g.: New Brunswick, Quebec, Nova Scotia, and Yukon).” Frequently Asked Questions: Corporations Canada.
Registering Your Business Federally or Provincially
As a foreigner starting a business in Canada, you have the option to incorporate your business either Federally or Provincially. Starting a business in Canada for foreigners or opening a branch office in Canada means providing lots of documentation to the government. Some of these documents are:
- Certificates of incorporation
- Bank reference letters
- Business license
- Lease contracts of Canadian office address
- Passport photograph copies
- Resume and photo
- Description of your business
- Registered name of the business in full
If you’re registering provincially, you may need more documents as requested by the province or place you want to start your business in. After thorough research, carefully choose a place best suitable for you and your business. Further down we’ll list out some of the best places to start a business in Canada and for opening a branch office in Canada, with the link to each province.
The best places to start a business or open a branch office in Canada
- Alberta: Information about starting a business for foreigners in Alberta is on the province’s official website. Visit the Official Alberta website to know more.
- British Columbia: if you are considering the British Columbia province when deciding on starting a business in Canada for foreigners, all the information you need is on the British Columbia official website. Starting a business in Canada for foreigners is now easy, just fill out the forms and supply all documents requested.
- Manitoba: The procedures to be followed in Manitoba, just as in other provinces, are different. You need to request a name reservation and approval, complete the Articles of Incorporation and provide other information. Check the Official Manitoba website to find out more.
- New Brunswick: if you are starting a business in Canada for foreigners in the New Brunswick province, the procedures to be followed are filling out forms, payment of fees, registering with the Corporate Registry. Use the New Brunswick website for more details.
- Newfoundland and Labrador: There are three file forms to be filled, forms 24, 25, and 26. The Newfoundland and Labrador province website has detailed information on incorporating a business.
- Northwest Territories: Another best place to start a business in Canada is the Northwest Territories. Register the name of your business and seek approval with Corporate Registries, provide a certificate of compliance/ good standing, and pay the registration fees.
- Nova Scotia: Register the name of your business, apply through Access Nova Scotia Centre. The rest of the procedure is listed on the Nova Scotia website.
- Nunavut Territory: Visit the website of Nunavut Territory, register your business name with the Corporate Registries office, and make payment.
- Ontario: As stated on the Ontario website, it is required for foreigners to register their business name after verifying and this registration must be renewed every five years in Ontario. Make the payment, and the acquired Master Business License should be proof of name registration. The Ministry of Finance should be contacted to ensure registration.
- Prince Edward Island: Visit Prince Edward Island website for more information. (note that the link may redirect your search to the latest extra-provincial resources because they often update their documents)
- Quebec: In case you don’t speak or understand French, employ a French translator. Navigate the Démarrer une entreprise service, which is only provided in French. Check the Quebec website for more information.
- Saskatchewan: when starting a business in Canada for foreigners and looking at operating from Saskatchewan, just visit the official Saskatchewan website for detailed information on how to go about it.
- Yukon: Go on the Yukon website, file the Name Reservation form and a Periodic Report (if applicable).
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Conclusion
If you’re not a Canadian citizen or landed immigrant, you can still form a business in Canada. Consider the four common types of entities for foreigners who want to venture into business in Canada and those planning on opening a branch office in Canada. This will help you make an informed decision before opening a branch office in Canada or planning on starting a business in Canada for foreigners.
