Company Formation in Canada
Incorporation for non-residents of Canada
Most Canadian provinces impose residency requirements for their board of directors. While we do not offer nominee director services, we can assist you with setting up your company in Canada, in provinces that do not have such residency restrictions. These provinces include British Columbia, New Brunswick, Prince Edward Island, Quebec, Alberta, and Ontario. Companies incorporated in any of these provinces can also register to do business in other provinces.
Branch office registration is an option available in any Canadian province, and it does not necessitate the appointment of a resident Canadian director.
Advantages of incorporating in British Columbia:
- Highly prestigious Canadian legal entity.
- No restrictions on the residency of directors, officers, and shareholders.
- Availability of a one-man corporation, allowing a single individual to be the sole shareholder, director, president, secretary, and treasurer of the corporation.
- No requirements for a minimum authorized capital; the corporation can issue any number of common shares without par value.
- No restrictions on issued capital; the corporation can issue any number of shares for any consideration.
- No withholding tax on director’s fees and salaries paid to non-resident directors, officers, and employees when they work outside of Canada.
- The corporation pays corporate income tax on net profit, and all business expenses are deductible before taxes.
Common uses of Company Formation in Canada
- Serving customers located in Canada, the US, the EU, and other highly regulated jurisdictions.
- Conducting business in highly regulated jurisdictions where transactions with offshore companies are restricted or prohibited.
- Purchasing property in Canada.
- Purchasing businesses in Canada.
- Establishing a credit history in Canada.
- Planning for business immigration to Canada.
Besides setting up Company in Canada, our services also include registration of subsidiary in Canada, in the provinces of British Columbia.
Company set up in Canada, for non-residents
Most relevant features
A minimum of one shareholder/officer is required.
There are no restrictions on the authorized or issued capital.
Shares are normally issued at no par value.
Most Canadian provinces impose residency restrictions for directors, but we can assist with incorporation in provinces that do not have such restrictions, such as Nova Scotia, British Columbia, and New Brunswick.
Our incorporation packages are affordable and straightforward. The process can be completed through email and/or phone consultation, with all documents couriered via international courier services. The package includes:
Complete Incorporation Package (named corporation)
- Registered Office.
- NUANS Name Search (if required).
- Completed Organizational Minutes, Share Certificates, Shareholders’, Directors’ & Officers’ Registers.
- Corporate Minute Book, including a Corporate Seal, Standard Corporate by-laws, Registers, and Ledgers.
- Completion and Filing of Notification pursuant to the Investment Canada Act.
- Registered Office Address for the service of documents and mail forwarding purposes.
Corporate taxation in Canada
Corporate taxation in Canada involves rates expressed as a percentage of taxable income earned in the province. British Columbia (B.C.) has two rates of corporation income tax: the general rate and the lower small business rate. The lower small business rate is applicable to Canadian-controlled private corporations (CCPCs) with active business income eligible for the federal small business deduction. Active business income generally refers to income earned by a corporation from a business other than a specified investment business or a personal service business.
The lower small business rate applies to active business income up to the B.C. business limit of:
- $500,000 effective January 1, 2010
- $400,000 effective January 1, 2005 to December 31, 2009
- $300,000 from April 1, 2002 to December 31, 2004
The general rate applies to income over $500,000 and any income that is not eligible for the lower small business rate (e.g., investment income).
When the rate or the business limit changes during the tax year, you have to base your calculation on the number of days in the year that each rate or limit is in effect.
General corporate income tax rate
|Effective January 1, 2018||12.0%|
|April 1, 2013 – December 31, 2017||11.0%|
|January 1, 2011 – March 31, 2013||10.0%|
|January 1, 2010 – December 31, 2010||10.5%|
|July 1, 2008 – December 31, 2009||11.0%|
|July 1, 2005 – June 30, 2008||12.0%|
|January 1, 2002 – June 30, 2005||13.5%|
|July 1, 1993 – December 31, 2001||16.5%|
Small business corporate income tax rate
|Effective April 1, 2017||2.00%|
|December 1, 2008 – March 31, 2017||2.50%|
|July 1, 2008 – November 30, 2008||3.50%|
|January 1, 2001 – June 30, 2008||4.50%|
|July 1, 2000 – December 31, 2000||4.75%|
|July 1, 1999 – June 30, 2000||5.50%|
|January 1, 1999 – June 30, 1999||8.50%|
Procedures and steps
Type of company
You need to make a choice regarding the type of company you wish to establish. According to the Companies Act, there are three options available for incorporating companies:
• a Limited company by shares (limited liability Company)
• a Limited company by Guarantee; or
• an Unlimited Liability Company.
You need to make several key decisions when incorporating your company. Here are the important choices you need to consider:
You must choose a name for your company. Ensure that it follows the naming rules specified by the Companies Act in British Columbia. Your company’s name can be in English, French, or both.
You must select a registered office location within British Columbia, which is officially designated to government authorities. It cannot be a P.O. box and should include a complete address. This office is often the primary place of business.
You need to decide on the fiscal year-end for your company. This represents the official last day of your company’s fiscal year and doesn’t have to be December 31 but is often chosen to be the last day of a specific month.
Determine who will be the shareholders of your company. Every private company must have at least one shareholder, and there can be several (but not more than 50) shareholders. You’ll need the complete residential address of each shareholder.
Number of shares
You must specify the number of shares each shareholder will possess. The total number isn’t as crucial as the proportion of shares initially issued to each shareholder. However, issuing more shares can have advantages for future selling or attracting investors.
Decide who will serve as the directors of your company. Directors are responsible for major company decisions and administration. Every company must have at least one director, and there may be several. There’s no requirement for directors to be Canadian residents.
Select the officers of your company, such as President, Vice-President, Secretary, and Treasurer. A company must appoint a President and a Secretary, and officers can also be directors and shareholders. Canadian residency is not required for officers.
You can choose auditors or accountants for your corporation. Auditors check the accuracy of financial records, and corporations usually appoint them to prepare annual financial statements. Alternatively, you can appoint accountants to prepare financial statements without acting as auditors.
Remember that these decisions will shape your company’s structure and operations, so careful consideration is essential.
Our company licensing services
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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.