Company Registration in Canada
Canada is one of the most popular countries for the emigration of CIS citizens and one of the most popular jurisdictions for tax optimization. This country offers attractive conditions for doing business. At the same time, it is not an offshore jurisdiction and is on the OECD white list.
The Lawtter Solutions law firm offers services for opening a business in Canada. Our company’s specialists have extensive experience in this area. We provide registration of legal entities in Canada and full legal support for already registered businesses.
3 900 EUR*
1-10 days
0%, 28% – 34%
Without a personal visit
Benefits
Benefits of Doing Business in Canada
Canada is one of the most popular business jurisdictions for clients who wish to operate in the Americas. This country offers several important advantages.
Political and economic stability
Developed judicial system
A fast procedure for starting a business
Government programs to attract investors
High degree of education and qualification of personnel
Opportunity to do business in the United States
Low levels of corruption and bureaucracy
Before registering a company in Canada, you must know about the popular organizational and legal forms. They are as follows:
Sole Proprietorship
Sole Proprietorship is a popular form of business start-up in Canada. It allows you to start a small business with restrictions on maximum profits, number of employees, etc. Tax rates for sole proprietorship are low.
Corporation
A corporation is one of the most popular forms of company registration in Canada. In such companies, shareholders’ liability is limited to the amount of authorized capital.
General Partnership
A fairly popular form of ownership for doing business in Canada is a partnership with unlimited liability. In this case, partners are liable for the company’s obligations with their shares and personal property or assets.
Limited Liability Partnership
A limited liability partnership means all partners are liable for the company’s obligations only to the extent of their share. Partners are not liable for personal property or assets.
Joint Venture
A joint venture is an organization based on an agreement between two or more persons to provide capital to a common venture. A contract between the parties determines the terms of the collaboration.
Director
Every company in Canada must have at least 1 director. Residency requirements vary. In the province of British Columbia, it is possible to register an organization with a director who is a non-resident of Canada. In the other provinces, only a citizen of that country can be appointed to the position. The director must be at least 18 years old.
Shareholder
Shareholders of companies in Canada can be legal entities or individuals at least 18 years old. There are no residency requirements here. Each company must have at least one shareholder who is not on the sanctions lists.
Address
Canada is a federal state, and each province has its laws on doing business. Therefore, a company registered in a particular province must have a legal address and office there.
Name
Companies in Canada can only have unique names. Verification is done before registration. The endings depend on the form of ownership. In particular, companies of the Corporation type have the endings Corp, Inc, Ltd; General Partnership ends with GP; and Limited Liability Partnership ends with LLP.
Authorized Capital
In Canada, payment of authorized capital is not required, and the minimum amount is not regulated.
Local Account
Canada does not require companies to open a local bank account. You can operate with a bank account from any country in the world.
Registration Agent
Under Canadian law, a registration agent is required. The registration agent carries out the company registration.
Reporting
All companies are required to prepare and file accounts by a specified deadline.
Before registering a company in Canada, you need to familiarize yourself with taxation peculiarities. Canada has a global principle of taxation: corporate profits are taxed on global income for corporations. For partnerships, there is a territorial principle of taxation: companies pay tax on income received from the territory of Canada.
Income Tax
Income tax for corporations in Canada varies, depending on the type of activity. The rate is between 28% and 34%. Partnerships do not pay income tax.
Value Added Tax
Corporations pay Value-Added Tax (VAT) at 5%. Partnerships do not pay VAT.
Dividend Tax
There is also a tax on dividends, interest, and royalties for corporations. The rate is 25%.
The reporting requirements for corporations in Canada include filing an annual report and an audit.
Annual Report
Companies must file annual financial statements for the reporting calendar year within six months after the end of the financial year. The financial period is 12 months from the end date of the previous period.
Audit
Mandatory audits are primarily for non-profit organizations. Commercial structures can undergo a voluntary audit, which helps to improve the company’s reputation and attract investments.
Tax Returns
Provinces separately set the deadline for filing tax returns and paying taxes, but in most cases, the deadline is six months after the end of the fiscal year.
Before registering a company in Canada, you must know about the popular organizational and legal forms. They are as follows:
Sole Proprietorship
Sole Proprietorship is a popular form of business start-up in Canada. It allows you to start a small business with restrictions on maximum profits, number of employees, etc. Tax rates for sole proprietorship are low.
Corporation
A corporation is one of the most popular forms of company registration in Canada. In such companies, shareholders’ liability is limited to the amount of authorized capital.
General Partnership
A fairly popular form of ownership for doing business in Canada is a partnership with unlimited liability. In this case, partners are liable for the company’s obligations with their shares and personal property or assets.
Limited Liability Partnership
A limited liability partnership means all partners are liable for the company’s obligations only to the extent of their share. Partners are not liable for personal property or assets.
Joint Venture
A joint venture is an organization based on an agreement between two or more persons to provide capital to a common venture. A contract between the parties determines the terms of the collaboration.
Director
Every company in Canada must have at least 1 director. Residency requirements vary. In the province of British Columbia, it is possible to register an organization with a director who is a non-resident of Canada. In the other provinces, only a citizen of that country can be appointed to the position. The director must be at least 18 years old.
Shareholder
Shareholders of companies in Canada can be legal entities or individuals at least 18 years old. There are no residency requirements here. Each company must have at least one shareholder who is not on the sanctions lists.
Address
Canada is a federal state, and each province has its laws on doing business. Therefore, a company registered in a particular province must have a legal address and office there.
Name
Companies in Canada can only have unique names. Verification is done before registration. The endings depend on the form of ownership. In particular, companies of the Corporation type have the endings Corp, Inc, Ltd; General Partnership ends with GP; and Limited Liability Partnership ends with LLP.
Authorized Capital
In Canada, payment of authorized capital is not required, and the minimum amount is not regulated.
Local Account
Canada does not require companies to open a local bank account. You can operate with a bank account from any country in the world.
Registration Agent
Under Canadian law, a registration agent is required. The registration agent carries out the company registration.
Reporting
All companies are required to prepare and file accounts by a specified deadline.
Before registering a company in Canada, you need to familiarize yourself with taxation peculiarities. Canada has a global principle of taxation: corporate profits are taxed on global income for corporations. For partnerships, there is a territorial principle of taxation: companies pay tax on income received from the territory of Canada.
Income Tax
Income tax for corporations in Canada varies, depending on the type of activity. The rate is between 28% and 34%. Partnerships do not pay income tax.
Value Added Tax
Corporations pay Value-Added Tax (VAT) at 5%. Partnerships do not pay VAT.
Dividend Tax
There is also a tax on dividends, interest, and royalties for corporations. The rate is 25%.
The reporting requirements for corporations in Canada include filing an annual report and an audit.
Annual Report
Companies must file annual financial statements for the reporting calendar year within six months after the end of the financial year. The financial period is 12 months from the end date of the previous period.
Audit
Mandatory audits are primarily for non-profit organizations. Commercial structures can undergo a voluntary audit, which helps to improve the company’s reputation and attract investments.
Tax Returns
Provinces separately set the deadline for filing tax returns and paying taxes, but in most cases, the deadline is six months after the end of the fiscal year.
Registration company
The Process of Registering a Company in Canada
Registering a company in Canada involves 5 steps. They are as follows:
Due Diligence and KYC Verification
Name Verification
Documents Preparation
Filing of Documents
Preparation of Internal Company Documents
Documents
What Documents Do You Need to Open a Company in Canada?
To open a company in Canada, you need to provide a document package. It includes the following documents:
- Identity document. You can provide a copy of your passport or national passport.
- A second identity document. For example, this could be a domestic passport or driver’s license.
- A document that proves your residential address, separate from your passport, national passport, or driver’s license. For example, this could be a utility bill no older than 3 months or a bank statement.
- Curriculum Vitae (CV).