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How to register a company in Canada for Immigrants

by Biztraction Research

The first thing anyone one to do while thinking of starting a business is to register it. Even though it can be very tough for immigrants to register businesses in some instances, we would talk about how to register a business in Canada and any other questions you might have

Can a non-citizen register a business in Canada?

In Canada, avenues have been made available for non-citizens and foreigners to establish and register a business. And this is made possible under federal and provincial laws. It can be done either by starting a new business, creating a branch office in Canada, or creating a subsidiary company. 

However, to be able to register a business in Canada as a noncitizen, you would need to fulfil certain requirements, which would include providing a Canadian address. This could be done by agreeing with a Canadian citizen or resident, or by relocating to Canada. 

How much does it cost to register a company in Canada as a foreigner?

The cost for registering a company in Canada as a foreigner depends on the province you are in and the business structure being operated.

Some of the fees to be paid for include name searches, name request numbers, and the main registration.

For an incorporated business, the cost of registration ranges from $350-$400.

How much does it cost to register a small business in Canada?

Registering a small business in Canada, for example, a sole proprietorship does not cost much like that of a corporation.

For a sole proprietorship, one should expect to pay between $60-$80.

Is it better to incorporate federally or provincially?

The process of incorporating a business involves separating the business from the individuals involved, submitting important documents, putting structures in place, etc. And this can either be done provincially or federally. Incorporating your business, whether federally or provincially, has its pros and cons.

Now, in provincial incorporation, you would incorporate your business in a particular province or territory, and you would be licensed to carry out business only in that province. However, if you need to expand to another province, you would need to register with the authority in that province.

However, for federal incorporation, you are licensed to carry out business anywhere in the nation. It also helps with an increase in business name protection.

Federal incorporation also gives your business global recognition, and this does not apply to provincial incorporation.

Now, there are also some downsides to federal incorporation, as it costs more time and money to start and complete the procedures involved.

So, choosing whether to do provincial or federal incorporation would depend on whether you want to operate your business nationally, or only in a province. However, if you register in a province, you can still go ahead to register federally, if the need arises.

Types of Business Structures in Canada

There are various types of business structures that one can set up in Canada, and they are as follows:

  1. Sole Proprietorship

A sole proprietorship is a business established and managed by an individual, in which the profits, losses, liabilities, etc. of the business is handled by the individual. A sole proprietorship is a simple business structure, which does not require many legal procedures, aside from licensing, registration, etc. 

  1. Partnership

A partnership is a business that is formed by the coming together of two or more people, to form a business enterprise to make a profit. In Canada, partnership businesses are handled by provinces and each province has regulations regarding these partnerships.

A partnership can be divided into a general partnership, limited partnership, limited liability partnership, and undeclared partnership. 

  1. Corporation

A corporation, unlike the sole proprietorship and partnership, is a legal entity, which can sue and be sued. It can also borrow, lend, acquire assets, etc. on its own, separate from its stakeholders. 

It is the most common kind of business structure in Canada, and it pays tax on its income. A corporation can be created either under federal or provincial laws. 

  1. Branch Operations

This is a business structure, in which a branch of a foreign country is established in Canada, to operate. Now, this branch is still a part of the parent company. So, any loss or liability incurred by the branch in Canada would still be borne by the mother company outside Canada.

Requirements for registering a business

There are certain requirements needed for registering a business in Canada. They are as follows:

  1. Have a unique name you intend to operate with.
  2. Open a business bank account in Canada
  3. Get a business number and tax account.
  4. Get your business licences and permits

Can I run a business without registering?

Yes, it is possible to run a business in Canada without registering. However, this is only possible, when you are running a sole proprietorship business, using your legal name.

Why should I register my business?

There are various reasons it is important to register your business in Canada, as well as several benefits to be enjoyed from it.

To start with, registering your business helps you access some tax benefits, such as income tax splitting, income tax deferral, low corporate tax rates, etc.

Another reason why you should register your business is that it helps to limit your liability as a business owner. This means that in situations of debt incurment and losses in the business, your personal finance and assets are protected. 

Registering your business also helps you to include your family members as shareholders, to be able to split the business income and pay them too. This is profitable, as it helps reduce the tax burden on you.

How long does it take to register a business in Canada?

Registering a business in Canada does not take very long, depending on whether you are registering federally or provincially.

When registering federally, it takes between five working days to register your business.

While for provincial business registration, this can be done in-person, by mail, or online, depending on which is more convenient for you. Also, for provincial registration, your business licence should get to you between 35 working days after you register.

What happens if you don’t register your business?

Now, you can decide not to register your business, if it is a sole proprietorship, operating under your legal name.

However, for other business structures, it is very important to register your business and there are consequences for not doing so.

To start with, you could be fined up to $2000 if you run an unregistered business in some provinces. You could also face lawsuits and even run the risk of business closure, in some situations.

What is the best province to incorporate in Canada?

There are many provinces where businesses can be incorporated. However, Alberta is still the best province to incorporate in Canada.

And this is due to some reasons, such as it being the province with the lowest tax burden, no capital tax, no payroll tax, no provincial sales tax, etc.

Which province is best for business in Canada?

Many provinces are great locations for business in Canada. Some of them include Ontario, British Columbia, Alberta, Quebec, etc.

However, amongst these different provinces, the best of all to start a business in Canada is Alberta.

Alberta has one of the strongest economies in Canada, and this is attributed to the petroleum, agriculture, and technology industries, which make it a centre for opportunities and growth.

In addition to that, the fact that one would not be required to pay certain taxes, such as capital tax, provincial sales tax, etc. makes it a land of delight for business owners.

How can I start my own business with no money?

It is possible to start a business in Canada with no money. However, you would need to do twice the work to get started. 

Now, one of the ways you can start your own business with no money is to apply for government funding. This would require you to write out a business plan and ensure that you meet the requirements for the funding, in order to get it. 

This funding could be in grants, loans, partial contributions, etc. 

Buying a business in Canada as a foreigner

One of the ways of becoming a business owner in Canada, without starting from scratch, is to buy a business, as a foreign investor.

Now before buying a business in Canada as a foreigner, there are certain conditions to fulfil and certain factors to consider.

To start with, it is best to buy a business that matches your skill, financial goals, and previous work experience. This is important, to help you manage the business well, in order to avoid mismanagement, as a result of lack of specialised knowledge.

It is also important that whatever business you would be buying fulfils the requirements, as set by the Canadian Immigration Authorities. 

Now, the following steps should be taken, when buying a business in Canada:

Firstly, make sure the business is one that is approved by the IRCC. For example, businesses that are in key economic sectors, and which contribute significantly to the nation’s economy should be considered before any other kind.

Another kind of business to consider is one that would provide employment opportunities for Canadians. Examples of such businesses are in sectors, such as agriculture, aviation, cybersecurity, etc.

After considering this, you can then go ahead to search out websites, where businesses that are for sale are listed. However, you need to do your research thoroughly to avoid buying a non-profitable business. 

You could also employ the services of a broker, to help you with searching out great businesses for sale. This would save you a lot of stress and hard work.

After getting a variety of businesses that are up for sale, you can then reach out to the owners of the businesses that interest you, and make some findings. Questions such as why the business is up for sale, how it is managed, the company’s corporate income tax returns for the past 3 years, etc. 

You could also spend some time around the business, to understand how things are being managed, the volume of sales, kind of customers, etc. Now, for whatever business you choose, you should ensure that there is a high potential for growth, the business should be able to generate enough funds to cover most of its expenses, and that it has some employees, at least two. 

After picking the business of your choice, it is important that you present it to a team of experts who would take you through the due process. In this process, issues that the business may be facing such as lawsuits, bankruptcy, debts, etc. can be uncovered. And then you can assess your risk and if the business is worth purchasing. 

You should also check out the nation’s laws, liabilities, and regulations to make sure that the business aligns with them. Afterwards, you can go ahead to make the purchase, however, this should be done with the involvement of a business lawyer, accountant, and other professionals needed in the purchasing process. 

Business opportunities in Canada for foreigners

There are a variety of business opportunities for foreigners, who wish to start a business enterprise in Canada. The following are some of these business opportunities:

  1. Restaurant business
  2. Retail store
  3. Agriculture 
  4. Construction
  5. Boutique
  6. Digital marketing company
  7. Unisex salon
  8. Homekeeping business
  9. Interior decoration
  10. Spa business
  11. Event planning
  12. Automobile repair
  13. Educational consultancy

Procedure for opening branch office in Canada

Now, one of the business structures in Canada is the branch operations, in which a foreign company establishes a branch of their business in Canada. And there are two ways to approach this. 

Firstly, you can open a branch office and apply as an extra-provincial in each province that the branch office would be operating in.

You can also incorporate the business as a subsidiary. A subsidiary is a corporation whose shares are held by a foreign parent company. Incorporating your business as a subsidiary gives the parent company limited liability from the actions of the subsidiary in Canada.

Is it easy to start a business in Canada

Starting a business in Canada is neither easy nor hard. It all depends on how you approach it, and how prepared you are in terms of capital investment, strategic location positioning, skill, and meeting the requirements of the law.

If you approach business the right way by starting with a business you are knowledgeable about in a strategic booming location, you would do better than if you are not strategic about your moves.

List of company formation agents in Canada

  1. https://www.canadacompanyformation.com/ 
  2. https://www.systemday.com/canada-company-formations/
  3. https://companyformations.ca/
  4. https://enterslice.com/company-registration-in-canada
  5. https://www.mycorporation.com/business-formations/canada-incorporate.jsp
  6. https://www.eurostartentreprises.com/en/company-formation/canada

Final thoughts

I believe you have all the information to make an informed decision about how to register a business in Canada

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