BUSINESS IN CANADA

Business immigration to Canada in 2023 is one of the most reliable ways for foreigners to move permanently to a prosperous country with good prospects for future Canadian citizenship. Similar to most developed countries in the world, the Canadian government is interested in attracting foreign investment and is happy to welcome experienced foreign businessmen who are able to create new jobs in Canada and benefit the local economy.

Business in Canada

Canada's main trading partner is the United States, where about three quarters of all Canadian exports are sent, including a huge amount of oil and gas resources. By the way, Canada ranks 3rd in the world in terms of oil reserves. High level of technology development, economic and financial stability, effective tax system, fair courts – this is not a complete list of advantages for doing business in Canada.

The country has a strong industry and a developed service sector, low crime and corruption rates, and an ideal infrastructure. Canadian universities provide quality education and are valued around the world, accordingly, the labor force is very qualified. Flexible legislation, vast territory, two official languages (English, French) and many other factors allow you to choose the most suitable place to immigrate to Canada to open a business.

How to open a business in Canada

It's no secret that running a business is a risky endeavor, especially when it comes to starting a business abroad, in this case in Canada. There are many important decisions to be made, from choosing the location, direction and form of ownership of the future company, to the amount of investment, tax optimization and effective control.

One of the main tasks of a foreign entrepreneur is to obtain a business visa to Canada. In order to attract successful businessmen to the country, stimulate economic development and increase the level of employment, the Canadian government has developed special immigration programs, each of which provides certain requirements. The main requirements include the experience and qualifications of the foreigner, the amount of assets and the innovative component of the business.

Types of business visas to Canada

Immigrant Investor Venture Capital Pilot Program

The program was launched back in 2010, but it should be noted that new applications are not accepted periodically. The government opens access when Citizenship and Immigration Canada justifies the need for additional foreign investment. You can track the status of the program here.

Basic requirements:

  • Assets of at least CAD 10 million, which is equivalent to $7.5 million. The funds must be earned through legitimate business or investment activities. The total amount does not take into account financial resources received in inheritance, as well as the value of real estate used as a primary residence. All this is very carefully checked. To participate in the program, one must be ready to invest at least 2 million Canadian dollars in a special venture fund for a period of up to 15 years without any guarantees of return and income.

  • The second prerequisite is the command of one of the official languagesFrench or English, which must be confirmed by an international certificate or passing a test. In addition, the foreigner must have at least one year of study in a higher education institution that meets Canadian standards.

Start-up Visa

Business immigration program to Canada, designed to launch promising innovative ideas that can compete in the market, bring profit and create jobs. Up to 5 foreign entrepreneurs can apply for the visa at a time, provided they own at least 10% of the company's capital each and more than 50% in total.

Basic requirements:

  • An official letter from one of the approved Canadian organizations with a guarantee of support for the business idea. Here is a link to a full list of such institutions. In some cases, proof of funds of 75 or 200 thousand Canadian dollars is required.

  • Additional conditions relate to good language skills (English, French) and proof of financial security to live in Canada. For a businessman, the amount is 12,960 Canadian dollars. For two people, for example, when immigrating with a spouse – 16,135.

Self-employed people

Based on a number of criteria such as experience, education, age, language skills and adaptability in Canada, foreigners can apply for a business visa as self-employed people. This applies mainly to cultural, sports and farming entrepreneurs. The prerequisites are sufficient financial security, at least 2 years of professional experience, medical examination and no criminal record.

For more details about business immigration programs in Canada and requirements for foreigners, please visit the official government portal – cic.gc.ca. To open a business in the Canadian province of Quebec, visit the website – quebec.ca.

Procedure for registering a business (company) in Canada

Register a business in Canada

In the Doing Business report, Canada ranks 23rd out of 190 countries in terms of ease of doing business. This is an aggregate indicator based on a comparison of a number of criteria. What is noteworthy is that in terms of the very procedure for setting up a business, the country is in 2nd position, and in terms of connecting to the electricity system it is in 105th position. Largely due to this, Canada is not in the top ten, but still the bureaucratic procedure of registering a company in Canadian authorities is minimized. Let's consider the main stages on the example of the city of Toronto.

  1. Registration and submission of documents to the Ministry of Industry of Canada. It is done online within 24 hours, and after 5 days the company is assigned a special business number. The cost is 200 Canadian dollars. It is mandatory to fill out a special registration form, also send the memorandum of association, information about the board of directors and the location of the company. There is an additional fee of $21.47 to reserve a unique company name.

  2. Once the new company is incorporated, the information is forwarded to the Canada Revenue Agency where a corporate income tax number is assigned within a day. You can find out about it on the official website of Industry Canada.

  3. If the turnover exceeds 30 thousand Canadian dollars per quarter, it is required to register with the tax office of the Canada Revenue Agency as a VAT (sales tax) payer. The procedure takes less than a day, is carried out through a special website and is absolutely free.

Of course, buying a ready-made business in Canada or registering a new company takes time, has its own peculiarities and requires specialist advice. Depending on the province and the direction of activity, there may be additional conditions, for example, registration of a license or special permit. Each case is strictly individual.

Forms of ownership for a company in Canada

Successful conducting business in Canada by entrepreneurs from abroad is impossible without choosing the optimal and affordable form of ownership for the newly created company. There are 4 main types of Canadian business structures – sole proprietorship, partnership, corporation and cooperative. Let's focus on the most popular ones.

Sole proprietorship. Means sole ownership of the company and full responsibility for obligations with all personal property. Profits from professional activities fully belong to the owner. The easiest and least expensive way to start and run a business in Canada. There is access to some tax benefits. There are very limited regulatory requirements.

Corporation. Registration is done at the federal or provincial level if the company's activities do not extend beyond the boundaries of a particular province. Shareholder liability is generally limited to contributions. A more time-consuming and organizationally complex type of starting and operating a business in Canada. The assistance of auditors, lawyers, accountants and other Canadian specialists will be needed to settle all legal requirements 100%.

Changing the ownership of an existing business in Canada requires closing the company and then opening a new one.

Taxes in Canada

Taxes in Canada

According to international experts, Canada has the lowest business tax burden of any G7 country. Transparent taxation system and fiscal optimization options create the most favorable conditions for doing business in this country.

Canada has a multi-level taxation system – federal, provincial and territorial. Therefore, the general tax rates in each province may differ, and much depends on the type and scale of activity. For example, small businesses in Canada pay much less. In any case, the help of tax consultants will not hurt.

Rates of major taxes in Canada in 2023

  • Corporate income tax. The basic federal rate is 38%, and after a general reduction is 15%. Provincial rates (the highest) range from 11.5% (Northwest Territories) to 16% (Nova Scotia, Prince Edward Island) depending on the province.

  • VAT (sales tax). Federal rate is 5%, provincial rate ranges from 7 to 10%.

  • Income tax. Progressive scale depending on income – 15%, 20.5%, 26%, 29.32% and 33%. In particular, in 2023 at the rate of 15% is taxed income up to 53.4 thousand Canadian dollars per year, and at the rate of 33% income over 235.7 thousand.

Canada is a very dynamic and developed country with rich natural resources and a diversified economy. At the disposal of foreigners a lot of areas for investment and opportunities to buy a ready-made business. Depending on the type of business, when choosing a region, focus on the number of population and purchasing power, the cost of renting premises, competition and tax rates. The most promising and largest cities to open a business in Canada in 2023 are Edmonton, Toronto, Winnipeg, Richmond and Vancouver.

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