Offshore companies
Select a Province in Canada to incorporate a business
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Where and how to incorporate in Canada
Federal and Provincial Registration
Most recommended Canadian Provinces
Directors Residency requirements
To set up a business company in Canada, it is essential to decide in which province your corporation will operate. You have the option to incorporate federally or in one of the 13 provincial or territorial jurisdictions.
To determine the most suitable province for your corporation, consider the following questions:
Where will your corporation conduct its business, either in one or more provinces/territories or across Canada?
How crucial is federal name protection? Will your corporate name be used in multiple provinces or territories?
Does the uniqueness of your corporate name warrant federal incorporation for its protection?
What are the various fees associated with federal incorporation compared to provincial incorporation?
There are three primary differences between federal and provincial incorporation: jurisdiction of operation, degree of corporate name protection, and the cost of incorporation.
Setting up your business in Canada
Federal and Provincial Registration
Federal corporations are established under the Canada Business Corporations Act (CBCA) and have the right to conduct business anywhere in Canada under their registered corporate name, subject to extra-provincial/territorial registration requirements in each province or territory. On the other hand, provincial corporations are established under the respective provincial corporate statutes and can only operate within the province or territory of their incorporation. Provincial corporations can apply for extra-provincial registration to conduct business in other provinces.
Extra-provincial registration
The process for extra-provincial registration is similar for both federal and provincially registered corporations, with one key distinction regarding name approval. Federal corporation names are automatically protected nationwide (except in Quebec) upon incorporation. In contrast, provincially incorporated companies have their names reserved and approved only within their home province. When they seek extra-provincial registration, their corporate name must also be approved in the new province, which may lead to name conflicts. Thus, federal incorporation is often preferred for corporations planning to operate in multiple provinces.
Corporate name protection
Another factor in choosing your corporation’s jurisdiction is the level of protection you desire for your corporate name. Federal incorporation under the Canada Business Corporations Act (CBCA) provides nationwide protection for corporate names (except in Quebec). Once a corporate name is registered as a federal corporation name, no other entity can use that name or a confusingly similar one anywhere in Canada (except Quebec). This federal corporate name protection is second only to trademark protection in terms of scope and effectiveness.
In contrast, provincial regulations regarding corporate names vary, and the scrutiny applied to proposed names may differ. Some provinces may accept a proposed corporate name as long as it is not identical to an existing one, placing the responsibility on the incorporator to determine potential confusion. However, federal incorporation applies stricter standards for name approval, leading to the rejection of names that might be acceptable for provincial registration. It is advisable to conduct a NUANS® and/or CIDREQMD name search before incorporating to ensure there is no potential name confusion.
Cost of incorporation
While the cost of incorporation should be a less important consideration, it is still a factor. Federal corporations must incorporate at the federal level and then register extra-provincially in one or more provinces, incurring both federal and provincial filing fees. An exception applies to federal corporations located in Ontario and Prince Edward Island, where there are no extra-provincial filing fees. In these provinces, the cost of federal incorporation may be the same as or lower than provincial incorporation.
Laws Restricting Province Selection
If you are a Canadian seeking to incorporate a business, you will likely incorporate in your home province, as all provinces require businesses to have an address or a representative within the province where they intend to operate. Each province has its own residency requirements for corporate directors. Some provinces mandate that a percentage of directors must be Canadian residents, while others do not have such requirements. British Columbia, Quebec, Prince Edward Island, Nova Scotia, and New Brunswick do not require Canadian resident directors, making them attractive options for foreign individuals and businesses looking to establish a presence in Canada.
Directors residency requirements
Each jurisdiction has its own specific requirements in terms of the residency of a corporation’s directors. These residency requirements are as follows, depending on each province:
Provinces requiring Canadian resident Directors
- Provinces requiring Canadian resident Directors
- Federal (Canada) 25% resident Canadian Directors required
- Alberta 25% resident Canadian Directors required
- Manitoba 25% resident Canadian Directors required
- Newfoundland 25% resident Canadian Directors required
- Saskatchewan 25% resident Canadian Directors required
Provinces not requiring Canadian resident Directors
- Provinces not requiring Canadian resident Directors
- British Columbia no Canadian Directors required
- New Brunswick no Canadian Directors required
- Nova Scotia no Canadian Directors required
- Ontario no Canadian Directors required
- Prince Edward Island no Canadian Directors required
- Quebec no Canadian Directors required
Please be aware of the following important considerations:
The requirement for Canadian residency only applies to directors, not officers or shareholders.
Officers and shareholders do not need to be Canadian residents. Additionally, it’s important to note that Canadian residents are specified, not Canadian citizens.
British Columbia, Quebec, Prince Edward Island, Nova Scotia, New Brunswick, and Ontario are the only provinces in Canada that exempt corporate directors from residency requirements. This exemption is particularly valuable for foreign individuals and businesses seeking to establish operations in Canada, as they are not obligated to appoint resident Canadian directors if they choose to incorporate in any of these provinces.
While we do not offer nominee director services, we can provide incorporation services in provinces that do not impose residency restrictions on directors.
Companies incorporated in any of these five provinces can expand their operations and register to conduct business in other provinces as well.
Additionally, branch office registration is an option available in any Canadian province, and it does not necessitate the appointment of a resident Canadian director.
Canada provinces
Select a jurisdiction which best suits your company’s needs:
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