OBJECTIVE Canada is an open country when it comes to those who want to set up businesses irrespective of nationalities. Foreign investors who want to open Canadian companies as non-residents have several options. They can set up companies and manage them from abroad or by moving to Canada. In this webinar, we shall focus on foreign companies and corporations intending to do business in Canada.

1. Doing Business in Canada
Dr. CA. Nabeel Ahmed
B.com, ACA, CMA, AICWA, AIA, MBA, Ph.D.

2. Research Credits
Anand N Krishna

3. Legends used in the Presentation
CAD Canadian Dollars
CCPC Canadian-Controlled Private Corporation
CIPO Canadian Intellectual Property Office
GST Goods and Service tax
HST Harmonized Sales Tax

4. Presentation Schema
Overview Introduction
Company Registration
and Set-up
Registering Property
and Building
Warehouse
Trademark
Registration and
Trading Across
Border
Tax Laws Statistics

5. Overview of Canada
Canada is a country in the
northern part of North America
extend from the Atlantic to the
Pacific and northward into the
Arctic Ocean
Canada is placed at 3rd position
for the ease of doing business
It consists of 10 provinces and 3
territories spanning across 9.98
million square kilometres,
making it the 2nd largest country
by total area
Canadian Provinces and Territories

6. Introduction
Canada is an open country when it comes to those who want to set up businesses
irrespective of nationalities
Foreign investors who want to open Canadian companies as non-residents have
several options
They can set up companies and manage them from abroad or by moving to Canada
In this webinar, we shall focus on foreign companies and corporations intending to do
business in Canada

7. Company Registration and
Set-up

8. Business Formation
• A Canadian Citizen can start a business with the Canadian address by acquiring provincial or federal
registration
• A company can be formed by a business immigrant by applying for visit to Canada
• Citizenship and Immigration Canada provides two types of business immigration programs namely
• Start-up visa program and
• Program for self-employed persons
• An individual, on satisfying the specified conditions laid out by the Citizenship and Immigration
Canada relating to language requirements, education, etc., can choose either of the above
programmes
• Factors affecting an application to visit Canada as a self-employed person include education, age,
adaptability and language abilities
• The applicant must be able to listen, speak, read and write English or French proficiently
Formation
Canadian Citizen or
Immigrant
Non-Canadian
Citizen or Non-
Immigrant
Formation by Canadian Citizen or Immigrant

9. Formation by Non-Canadian Citizen or
Non- Immigrant
A Company can be formed with a Canadian having a Canadian address. However, there is a
requirement that atleast 25% of the directors be resident in Canada
In case there are fewer than four directors, then atleast one director must be resident in
Canada
Each province has different residency requirements and some provinces do not impose
residency requirements for directors
So an investor incorporating in Canada should choose the province accordingly
Minimum
of 25%
who must
be a
Canadian
No
criminal
history
No
bankruptcy
proceedings
Attaining
the age of
maturity of
18 years
Requirement
to be a
Director

10. Contd..
Each province has its own rules and regulations in terms of address
For instance, the province of British Columbia (B.C) which has the
most flexible rules regarding non-resident businesses, requires only
a physical address and a viable work permit
The person starting such business must submit an application for
review to the Investment Review Division before making the
investment. The application form needs to be submitted with KYC
documents of the promoters
The Division, within a period of 45 days, will determine whether the
investment should be approved

11. Documents Required
The Articles of
Incorporation
Rules that will govern the company
directors and members
The Memorandum
Sets out the rules for company
conduct
The Notice of Offices
Informs the government of the
registered office of the company
Notice of Directors Required for federal corporations

12. Registration Procedure
• Selecting a corporate name which does not include a
misrepresentation of your businessDeciding how you want to name your
corporation
• Rules and regulations which will govern the conduct of the
companyCompleting articles of incorporation
• Indication of the registered office and making sure the
eligibility requirements of the directors are metEstablishing the initial registered office
address and first board of directors
• Filing the request for registration online
Filing the appropriate forms and paying
the fee
• Corporations Canada will make sure your articles of
incorporation have been properly completed and that the
proposed name is acceptable
Processing your application

13. A business can be incorporated in a single Canadian territory or province
Each provincial incorporation is a stand-alone process
The country is separated into 10 provinces and 3 territories
Once incorporated in one of the areas, the company's name is secured and can conduct business in that sector
However, to carry out the business in another province, registration with that authority is required
Provincial Incorporation
Federal incorporation
of business means that
you will be able to do
business all across
Canada under the
same business name,
even if some other
company is already
using a similar name
in some province or
territory
Federal Incorporation
Types of Corporations

14. Corporation - Federal vs Province
Particulars Federal Corporation Provincial Corporation (Ontario)
Government Fee CAD 200 CAD 360
Mandatory Filings Required to complete Annual Returns
every year in order to stay active. If a
Federal corporation misses two of these
filings, the corporation will be dissolved
by the Federal government
There is no such mandatory annual filing for
an Ontario corporation. There is only one
mandatory filing, which is called Initial
Notice and is due within 60 days of
incorporating
Name Protection Federal corporations have a higher level of
name protection, as their name is
protected at the Federal level
An Ontario corporation will have name
protection within the Province
Processing Time As the name approval process is more
rigorous for Federal corporations, this
increases the processing time to 1-2
business days to complete your
incorporation.
An Ontario incorporation is completed as
soon as it is submitted electronically.
Extra-Provincial
Registration
Federal corporation is required to register
the corporation within each Province
where operation is carried out
An Ontario corporation is able to register
Extra-Provincially if business operation
expands the operation to other Provinces
Let us now make a comparison between Federal and Provincial
Corporation in Ontario

15. Setting up Overseas Company
Incorporating a subsidiary
A subsidiary is a Canadian
corporation whose shares are held
by a foreign parent company
A subsidiary can be incorporated
federally or provincially
Compared with a branch office,
incorporating a subsidiary gives the
parent company limited liability
from the actions of the subsidiary
Opening a branch office
To open a branch office, the foreign corporation must make an application for registration as an extra-provincial or
foreign corporation in each province in which the business intends to operate

16. Registering Property, Building
Warehouse, Trademark,
Trading Across Border

17. Registering Property
The steps and time involved in registering property, assuming a standardized case of an entrepreneur who
wants to purchase land and a building that is already registered and free of title dispute are as follows:
S.No. Procedure Days to complete
1 Obtain tax clearance and utility certificate from the Municipality 2
2 Obtain a copy of parcel register and search for writs 1
3 Obtain a status certificate for the selling corporation 1
4 Conduct title search 2
5 Registration of the transfer of title 1
Canada welcomes buyers from across the globe, and there are no restrictions to the types of properties
which can be purchased

18. Building Warehouse
The procedures and time to build a warehouse, including obtaining necessary the licenses and permits and
obtaining utility connections are as follows:
S.No. Procedure Days to complete
1 Preliminary Project Review with Municipal Authority 30
2 Application and obtaining Zoning Permit 30
3 Site Plan approval from Municipal Authority 180
4 Building Permit 15
5 Inspection of Foundation, Frame, Drainage, Sanitation and Plumbing 5
6 Obtain Water and Sewer Service Connection 14
7 Fire Department inspection 3
8 Final inspection and occupancy permit 1
The average cost associated with building a warehouse amounts to roughly CAD 60,000

19. Trademark Registration
A trademark is a sign or combination of signs used or proposed to be used by a person to distinguish
their goods or services from those of others
An application for trademark registration may be made to the Canadian Intellectual Property Office
(CIPO) with an application fee of CAD 330
After application, the mark shall then be reviewed by the CIPO, following which the trademark
will be published in a Trademark Journal to allow for public opposition
If anyone opposes the published trademark, a Trademark agent can be hired to solve the
oppositions by appealing to the Federal Court of Canada and reaching a decision
If there is no opposition, or if an opposition has been decided in your favour, the Registrar will
register your application and will not look at any further challenges
The registered trademark is valid for usage in Canada for a period of 10 years after which renewal can be
made by paying a renewal fee of CAD 400

20. Trading Across Borders in Canada
The time and cost related to export and import are as follows:
Particulars Time (Hours) Associated Cost (USD)
Export: Clearance and inspections
required by customs authorities
2.1 166.70
Export: Port or border handling 0.5 -
Import: Clearance and inspections
required by customs authorities
2.1 171.90
Import: Port or border handling 0.5 -

21. Tax Laws

22. Applicable Tax Rates
Province/ Territory General Rate
Small Business
*(CCPC)
Business Income
Limit (CAD)
Federal Rate 15% 9% 5,00,000
Alberta 10% 2% 5,00,000
British Columbia 12% 2% 5,00,000
Manitoba 12% 0% 5,00,000
New Brunswick 14% 2.50% 5,00,000
Newfoundland & Labrador 15% 3% 5,00,000
Nova Scotia 16% 3% 5,00,000
Northwest Territories 11.50% 4% 5,00,000
Nunavut 12% 3% 5,00,000
Ontario 11.50% 3.20% 5,00,000
Prince Edward Island 16% 3% 5,00,000
Quebec 11.50% 5% 5,00,000
Saskatchewan 12% 2% 6,00,000
Yukon 12% 2% 5,00,000
The general corporate tax rate
applies to active business
income in excess of the
business limit
*CCPC is a private
corporation which is
controlled by Canadian
residents.
A corporation will not
qualify as a CCPC if it is
controlled directly or
indirectly by a public
corporation or non-
residents.

23. Capital Gains Tax
Capital Gain Tax is a tax on gains realized on the transfer of ownership including
sale, exchange, transfer, distribute, cancel, redeem, destroy, loss, expire, expropriate or surrender of a capital
asset.
Capital gain is calculated as the difference between the consideration received and the cost of the asset at the
time of realization
Capital Gain Tax is charged at the rate of 50%

24. Indirect taxes
Generally, the federal Goods and Services Tax (GST) applies to taxable goods and services supplied in
Canada
The Harmonized Sales Tax (HST) is a blended federal/provincial sales tax
The rate for other taxable supplies depends on the province or territory. The current rates are:
• 5% (GST) in Alberta, British Columbia, Manitoba, Northwest Territories, Nunavut, Quebec,
Saskatchewan, and Yukon
• 13% (HST) in Ontario
• 15% (HST) in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island

25. Withholding of Tax for Non-Residents
Description Rate
Dividends
25%
Interest
Royalties
Technical Service fees
Rent
Management fees
However, if there is a tax treaty between Canada and the country of residence, the terms of the treaty may
reduce the rate of non-resident tax to be withheld

26. Statistics

27. Tax Revenue
-
50,000
100,000
150,000
200,000
250,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USDMillion
Total Tax Revenue (USD Million)

28. Gross Domestic Product (GDP)
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
GDP (USD Million)

29. Tax to GDP (%)
11.40
11.60
11.80
12.00
12.20
12.40
12.60
12.80
13.00
2006 2008 2010 2012 2014 2016 2018 2020

30. Trade Deficit
-45,000
-40,000
-35,000
-30,000
-25,000
-20,000
-15,000
-10,000
-5,000
-
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
TRADEDEFICIT
EXPORTSANDIMPORTS
AXIS TITLE
Trade Deficit (USD Millions)
Exports Imports Trade Deficit

31. Foreign Direct Investment
29,715
38,338
49,369
67,028
64,175
59,986
34,202
29,110
46,543
2010 2011 2012 2013 2014 2015 2016 2017 2018
USDMillions
FDI (Inflows)

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