Company formation in Canada
Setting up your business company in Nova Scotia
Incorporation for non-residents of Canada
Many Canadian provinces enforce residency requirements for their board of directors. However, certain provinces in Canada do not have such restrictions. Notable examples include Nova Scotia, British Columbia, and New Brunswick.
Companies incorporated in any of these provinces have the flexibility to register and conduct business in other provinces as well.
Language and Currency
The official languages of Canada are English and French. The official currency is the Canadian Dollar, often referred to as the “loonie,” and it is freely exchangeable. Financial institutions and businesses also readily accept the US Dollar.
Exchange control
Canada has no exchange controls in place.
Legal Framework
The legal framework in Canada is based on Common Law, rooted in English Common Law principles.
Principal corporate legislation
The principal corporate legislation includes the Companies Acts from 1931 to 1993 and the Limited Liability Companies Act of 1996.
Types of corporations for International Trade and Investment
Canada offers different types of corporations for tax purposes. The type of corporation chosen determines its eligibility for specific tax rates and deductions. These include:
Private Corporation
Various types exist for tax purposes, and their classification affects eligibility for specific rates and tax deductions.
Canadian-Controlled Private Corporation (CCPC)
A CCPC is both a private and Canadian corporation that meets specific criteria, including Canadian residency, non-control by non-residents, and other factors.
Other Private Corporations
These are Canadian corporations controlled directly or indirectly by non-residents and have specific criteria for classification.
Public Corporation
Public corporations must meet specific requirements, including having shares listed on prescribed Canadian stock exchanges or complying with designated regulations.
Corporation Controlled by a Public Corporation
These are corporations controlled by a Canadian public corporation.
Other Corporations
This category includes non-resident-owned investment corporations and Crown corporations.
Company information
Procedure to incorporate
Setting up a company in Nova Scotia, Canada, the company formation process involves submitting a Memorandum and Articles of Association, appointing directors and a secretary, and specifying the registered office location.
Restrictions on trading
Canadian corporations are restricted from engaging in banking or insurance activities without the appropriate license. They are also prohibited from soliciting funds from the public or offering shares to the public without the necessary license.
Powers of company
A Canadian corporation possesses the full powers of a natural person.
Language of legislation and corporate documents
The language of legislation and corporate documents is primarily English, with French optional in federal corporations and mandatory in Quebec.
Registered office required
Canadian corporations are required to maintain a registered office within Canada.
Shelf companies
Shelf companies in Canada are available for purchase.
Time to incorporate
Typically, incorporation can be completed within two days, subject to name approval.
Name restrictions
There are naming restrictions, such as names similar to existing companies, names implying illegal activities, or names suggesting royal or government patronage.
Language of name
Names can be expressed in any language using the Latin alphabet if accompanied by an English translation, and if they are deemed suitable by the Registrar of Companies.
Names requiring consent or license
Certain names or their derivatives, such as “bank,” “building society,” and others, require consent or a license.
Suffixes for Limited Liability
Private Limited Companies must use suffixes like Incorporation, Corporation, Limited, Inc., Corp., or Ltd.
Compliance
Authorised and issued share capital
The minimum authorized share capital is $1 or its equivalent currency, with one share of par value being the minimum issued capital.
Classes of shares
Canadian corporations may issue registered shares, preference shares, redeemable shares, and shares with or without voting rights.
Financial statements
Companies must file audited financial statements, and failure to maintain or provide accounts upon request can result in penalties.
Directors
Typically, a minimum of one director is required, though some provinces may require two. Directors may be of any nationality, but some provinces mandate a resident director.
Company secretary
A company secretary is required, and they must be a natural person of any nationality and residence.
Shareholders/Members
The minimum number of shareholders is one.
Company formation in Nova Scotia, Canada
Incorporation Packages for Non-Residents
A minimum of one shareholder/officer is required.
There are no restrictions on the authorized or issued capital.
Shares are commonly issued without a designated par value.
Most Canadian provinces impose residency restrictions for board members. However, we offer incorporation services in provinces without such restrictions, namely Nova Scotia, British Columbia, and New Brunswick.
Our Incorporation Packages are designed to be cost-effective and user-friendly. The entire process can be completed through email and/or phone consultations, with all documents couriered via international courier services.
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:
- Corporate Seal.
- Standard Corporate by-laws.
- Registers & Ledgers.
- Completion and Filing of Notification pursuant to the Investment Canada Act.
- Registered Office Address for service of documents and mail forwarding purposes.
Corporate Income Tax in Nova Scotia
The corporate income tax structure in Nova Scotia is applicable to companies engaged in business activities within the province. This provincial corporate income tax is determined based on the taxable income amount. The federal government establishes the methodology for calculating taxable income, encompassing factors such as net income, capital cost allowance, and various tax deductions. Both federal and provincial corporate income taxes are collected through the submission of annual tax returns to the Canada Revenue Agency (CRA).
Tax Rates in Nova Scotia
Nova Scotia imposes two distinct corporate income tax rates:
The lower corporate income tax rate stands at 3.0 percent, effective as of the 2014 tax year. This rate is applicable to taxable income earned within the province by Canadian-controlled private corporations, provided it falls within the Nova Scotia business limit of $500,000. Often referred to as the Small Business Rate, it is applicable to all Canadian-controlled private corporations possessing limited taxable capital.
The higher income tax rate is set at 16 percent. This rate is applicable to taxable income generated in Nova Scotia that does not meet the criteria for the lower rate.
Tax credits
Companies conducting business in Nova Scotia may qualify for various provincial tax credits aimed at reducing their income tax liability. These tax credits cover a range of areas and can effectively lower the overall income tax burden for eligible businesses.
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Innovation Equity Tax Credit (IETC)
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Venture Capital Tax Credit (VCTC)
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Capital Investment Tax Credit (CITC)
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Film Tax Credit
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Digital Media Tax Credit
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Digital Animation Tax Credit
- Research and Development Tax Credit
- New Small Business Tax Deduction
- Donations and Gifts
- Foodbank Tax Credit for Farmers Guidelines
- Credits issued under Film, Digital Media, Digital Animation, and Capital Investment Tax Credits
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