Company formation in Canada
Setting up your business company in Ontario
Incorporation for non-residents of Canada
Non-residents can incorporate a company in Ontario, with some specific considerations:
Resident Canadian Director Requirement: Ontario no longer requires 25% of directors to be Canadian residents (as of July 2021). This allows 100% foreign ownership and directorship.
A registered office address in Ontario is required.
Non-residents may need to work with a local service provider to meet the registered office and filing requirements.
Banking and financing may require a Canadian business bank account, which often requires physical presence.
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
The most common types of corporations suitable for international business include:
Federal Corporation (under Canada Business Corporations Act)
– Can operate across all provinces.
– Strong brand protection and recognition.
– Often chosen for businesses with national or international ambitions.
Provincial Corporation (under Ontario Business Corporations Act)
– Only permitted to operate in Ontario unless registered in other provinces.
– Simpler compliance and generally faster setup.
Best option for international trade
– Federal corporation or Ontario provincial corporation with a clear business plan for import/export, and GST/HST
registration for tax compliance.
Company information
Procedure to Incorporate
- Choose and reserve a business name (or use a
numbered company). - Prepare Articles of Incorporation.
- Submit incorporation documents online via Ontario
Business Registry or through a service provider. - Register for taxes (GST/HST, payroll, etc. if applicable).
- Open a corporate bank account.
Restrictions on Trading
- Certain industries (e.g., banking, insurance, telecom) are regulated and require licenses.
- Sanctioned countries and restricted goods are subject to federal trade regulations.
Powers of Company
- A corporation has the capacity and powers of a natural person, unless restricted in its Articles.
Language of Legislation and Corporate Documents
- English or French. English is most commonly used for international business.
Registered Office Required
- Yes, a physical address in Ontario is required (not a P.O. Box).
Time to Incorporate
- Online incorporation can be completed in 1–2 business days.
- Manual filings may take longer.
Name Restrictions
- Must be distinctive, not misleading, and not identical or too similar to existing corporate names or trademarks.
Language of Name
- English, French, or a combination.
Names Requiring Consent or License
- Names suggesting professional services (e.g., “engineering”, “law”, “university”) need approval from the corresponding regulatory body.
Suffixes for Limited Liability
- Must end with: “Limited”, “Ltd.”, “Corporation”, “Corp.” “Incorporated”, “Inc.”,
Compliance
Authorized and Issued Share Capital
No minimum requirement for capital in Ontario.
Common to authorize 1–10,000 common shares without par value.
Classes of Shares
Can issue multiple share classes (e.g., common, preferred) with different rights.
Must be defined in the Articles of Incorporation.
Financial Statements
Required annually.
Must comply with Canadian GAAP or IFRS.
Audits are optional unless demanded by shareholders.
Directors
Must have at least one director (no residency requirement as of 2021 in Ontario).
Directors can be non-residents.
Company Secretary
Not mandatory under Ontario law.
Shareholders/Members
Minimum one shareholder (individual or corporate).
Shareholders may be non-residents and hold 100% of the shares.
Company formation in Ontario, Canada
Incorporation Packages for Non-Residents
- No residency requirement for directors/shareholders in Ontario.
- Must appoint a registered agent or use a local address.
- Consider engaging a Canadian lawyer or incorporation service provider.
- If employing staff or conducting sales in Canada, registration with Canada Revenue Agency (CRA) for GST/HST is required.
- Must comply with Canadian anti-money laundering (AML) and KYC regulations.
Corporate Income Tax in Ontario
Corporate Income Tax in Ontario, Canada (2025)
Corporate income tax in Ontario is imposed at both the federal and provincial levels, and the total amount a corporation pays depends on its income and classification.
Federal Corporate Tax (Canada-wide)
General corporate rate: 15%
Small business rate (on first $500,000 of active income): 9%
Only available to Canadian-Controlled Private Corporations (CCPCs)
Ontario Provincial Corporate Tax
General corporate rate: 11.5%
Small business rate (for CCPCs): 3.2%
Combined Corporate Income Tax Rates
| Corporation Type | Taxable Income Level | Federal Rate | Ontario Rate | Total |
| CCPC (Small Business) | First $500,000 | 9% | 3.2% | 12.2% |
| CCPC or Other | Above $500,000 | 15% | 11.5% | 26.5% |
| Non-CCPC (e.g., foreign-owned) | All income | 15% | 11.5% | 26.5% |
Non-resident or foreign-owned corporations do not qualify for the small business rate.
Corporate Tax Filing Requirements
Corporations must file a T2 Corporate Tax Return with the Canada Revenue Agency (CRA).
Returns are due 6 months after the end of the fiscal year, but any taxes owed must be paid 2 or 3 months after the fiscal year-end, depending on size.
Ontario tax is filed and paid together with the federal return through the CRA.
Tax Credits & Deductions (examples)
Scientific Research and Experimental Development (SR&ED) tax credits
Ontario Innovation Tax Credit
Capital cost allowance (CCA) for depreciation
Loss carry-forwards and carry-backs
Register your Business Entity today!
Our Business Development Team is ready to guide and assist you to discuss all options you have and to provide you with all the support you need to enable you to take the right decision facing your specific needs!
All our Consultancy and Advisory services are completely FREE!
Packages and Prices!
Inclusions
Year 1 Incorporation and service fees.
Optional Services (Bank Account opening, Nominee services, Certification of documents, amongst others).
Annual Renewal service fees for year 2 and subsequent years, to keep your company in good standing and full Compliant at all times.
