It’s said that Canada is one of the great places to establish a business with its business-friendly policies and generally peaceful society. Normally, it’ll take a few simple navigable steps to register a business in the country. However, starting a business as a non-Canadian resident will require a few additional conditions to be met before being allowed to start conducting operations.
If you’re an entrepreneur interested in establishing a business in Canada as a non-resident, read the following guide to understand the processes involved.
Who’s Considered A Non-Resident
You can be considered a non-resident of Canada if:
- You’re not considered a legal resident of Canada;
- You stay in the country for less than 183 days; and
- You live outside Canada for most of the tax year.
For this article, a non-resident will refer to one who doesn’t live in the country.
Starting A Business In Canada 101
Setting up a company in Canada has different requirements which depend on the type of business you want to establish and the province in which you want to do business operations. Although you may be a non-Canadian resident, launching a business in the country will require you to have a Canadian address when registering. This may need you to either migrate to the country or partner with a Canadian resident.
Once you’ve secured a Canadian address, you can go ahead and register your business. Still, registration procedures differ depending on your type of business and the province in which you wish to operate. All businesses in Canada are required to register their business names in the provinces they’ll operate.
Sole proprietorships, on the other hand, can use their owner’s legal names and addresses. Having a Canadian phone number is said to be a prerequisite and an added advantage when it comes to public relations and marketing for individuals who are not currently residing in the country.
Before you start the registration process, you may need to inquire with the provincial registry in which you want to do business and understand their specified application procedure.
Moreover, if you want to do business in more than one province, you’d need to register separately in each. If you intend to do business throughout Canada using the same name, then you may need to register your business federally. The difference between provincial registration and the federal level is that a provincially registered business can only do business in the registered province. In contrast, a federally registered business has the whole of Canada as its territory.
The Types Of Businesses You Can Register In Canada
The main types of business you could register in Canada include:
- Sole proprietorship,
- Corporation, and
How To Register Your Business In The Country
Once you’ve chosen the name and the business type you want, your next move is to register with the relevant provincial authority. For example, businesses in Nova Scotia would need to register with the Nova Scotia Registry of Joint Stock Companies. If it’s in Ontario that you need to do business, then you’d need to register with the Companies Branch of the Ministry of Consumer and Business Services.
When you’ve identified the responsible authority for your business registration, the consecutive steps are usually, conducting a company name search, filling out some business registration forms, and paying a registration fee. If there are no complications, registrations are normally done in a day.
Other Possible Canadian Requirements
After you’ve registered your business, you still have to do a few more procedures before you’re good to go. These may include:
- Getting a business license;
- Registering for the goods and services tax or GST and the harmonized sales tax or HST;
- Registering for the provincial sales tax; and
- Buying business insurance.
Setting Up A Business If You’re Canadian
If you’re a Canadian citizen or an immigrant with a physical address, you have the option of registering your business as a sole proprietorship or other authorized business forms. These may include partnerships, corporations, or cooperatives. It’ll be essential to understand the rules governing the type of business you can register in the specific province.
Registering a sole proprietorship will have the major advantage of being the easiest to manage and the cheapest to establish. A sole proprietorship will also have the simplest tax reporting for it doesn’t require separate corporate tax returns.
Launching A Startup If You’re Not Canadian
You can still establish a business in Canada even though you’re not a citizen or registered immigrant. Your options could, however, be limited. As stated earlier, you would need to have a Canadian physical address before you register your business. This could mean partnering with a Canadian resident and using their address to start the business.
Another way around this would be to establish an incorporated business. You’d, however, still need to have a Canadian physical address if you want to enjoy some favorable tax conditions that a Canadian-controlled private corporation enjoys. You’d also need to have the right number of Canadians sitting on your board of directors and other requirements for a corporation.
Forming A Company If You’re A Foreign Corporation
Foreign corporations can also open shops in Canada. They can do so through one of two ways: establishing a Canadian branch or incorporating a subsidiary.
You can open a Canadian branch office simply by applying for registration to the province you intend to set up. On the other hand, a Canadian subsidiary is a corporation with shares held by a parent company that could be foreign. It can be incorporated at a provincial level or federally. Again, it’s important to find out about the different requirements from your preferred province before deciding on which option to take.
Points To Remember
To start a business in Canada as a non-resident, you may need:
- a real physical address;
- a Canadian resident to partner with;
- the right type of company for your business;
- a business territory;
- a company name to be registered either provincially or federally;
- the necessary municipal and tax licenses; and
- some business insurance.
The Bottom Line
Being a non-resident of Canada doesn’t mean that you can’t establish a business in the country. The various options discussed here could make the establishment of your business doable.
However, one point to remember is that you’d need a Canadian physical address to register your business. You’d, therefore, need to either partner with a Canadian resident to make the business registration easier or you could establish a corporative. If all else fails, you may need to move to Canada and undergo the country’s immigration program.
At the end of the day, reaching out to experienced firms and consultants who specialize in helping out Canadian non-residents with such affairs can make the whole process a lot smoother.