Open a Company in Canada as a Non-resident - Company Formation Canada (2023)

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Canada is an open country when it comes to those who want to set up businesses here, no matter their nationalities. Foreign investors have several options when it comes toimmigrating to Canada, among whichsetting up companies here as non-residents.

Those who want toopen Canadian companies as non-residentshave several options to match their budgets. They can set up companies and manage them from abroad or by moving to Canada. Below, ourCanadian company formation specialistsexplain the options forstarting a business as a non-resident.

(Video) Starting a Business in Canada as a Non-Resident

Quick Facts
Legal entities for non-residents in Canada

– partnership,

– corporation,

– cooperative,

– branch

Rule of law for non-resident businesses in Canada

– Investment Canada Act,

– Business Corporation Act

Investment programs for foreign investors

– Strategic Innovation Fund,

– Scientific Research & Experimental Development,

– Canada’s Pan-Canadian Artificial Intelligence Strategy

Appointing local agent (yes/no)

Yes

Requirements for obtaining residence permit

– setting up a business or invest in a business,

– net worth requirements,

– clean criminal records,

– language requirement,

– others depending on the investment program and the selected Canadian region.

Business address in Canada (yes/no)

Yes

Applying for tax number in Canada (yes/no)

Yes

Company formation – any special rules for foreign businesses (yes/no)No
Documents required for company formation

– founding documents,

– certificate of incorporation,

– documents of the registered address,

– directors' IDs,

– the approval for the company name,

– shareholders' IDs or passports,

– the application form

Corporate tax rateIt varies based on the region and the size of the company and it is collected at a provicial and federal levels.

We can also assist foreign entrepreneurs who want toopen companies in Canada.

Table of Contents

What are the main options for setting up a Canadian business as a non-resident?

TheCanadian Company Actis one of the most complete legal frameworks when it comes to starting a business in this country. It provides for the conditions for both residents andnon-residents to open companies in Canada.

Anon-residentinterested inhaving their own business in Canadacanregister a companyunder on the following situations:

  • if they own a business abroad, they can move the existing company to Canada or set up a branch or subsidiary here;
  • one can register a company in any Canadian province or at a federal level and run it from their home countries;
  • one can also register a company in Canada by relocating here as a sole entrepreneur or self-employed individual;
  • one can apply for one of the programs enabled by the Canadian government, such as theInvestor Venture Capital Scheme;
  • one can apply for the Canadian Entrepreneur Startup Visa which was created for foreign investors.

No matter the choice, foreign investors seeking toopen companies in Canada as non-residentscan request ourcompany registration services.

Setting up a business in Canada as a non-resident and managing it from abroad

One of the easiest ways ofstarting a business in Canadais by moving an existing company orcreating a branchor subsidiaryhere and manage it from abroad. No matter the chosen business form, thenon-resident investormust appoint a local agent to complete thecompany incorporation procedure in Canada.

The company can be set up in one province or territory in Canada or it can be registered at a federal level. The company can also operate in several provinces; however, it must be registered separately in each province or territory.

(Video) Open a Company in Canada as a Non-Resident

With a solid background incompany registration in Canada, our local consultants can help those interested insetting up companies here as non-residentsmake a good decision.

Starting a company in Canada by moving here

Another option fornon-residents to open companies in Canadais by moving here. They can do that by applying for aresidence permitor by coming here based on a self-employment visa.

Mostnon-residentsdecide for these options whensetting up companies in Canada; however, the requirements are very different when applying for a regular residence permit compared to obtaining a self-employment visa.

For example, when applying for aself-employment visa, a relevant condition is to have sufficient knowledge or expertise in the field the non-resident will operate.

How to open a company in Canada under one of the investment schemes available

It is possible for foreign investors toobtain an entrepreneur startup visaandset up a company in Canadaunder very advantageous conditions. It is also possible to enroll for the Investor Venture Capital Scheme, however, this will imply a significant investment in terms of capital.

Ourcompany formation agents in Canadacan offer detailed information on these programs.

Requirements for starting a Canadian company as a non-resident

No matter if theforeign citizendecides to remain abroad orimmigrate to Canada, the requirements foropening a companyhere remain the same. These are:

  1. having a local address in Canada is mandatory when opening a company in any province or even at a federal level;
  2. preparing the incorporation documents and appointing a specialized agent to submit them with the Trade Register;
  3. reserving a company name number, depending on the preferences of the foreign investor opening the business;
  4. obtaining a Canadian tax registration number and registering for VAT here are also mandatory;
  5. obtaining the relevant licenses and permits for offering services or selling goods from the Canadian authorities.

Opening a company in Canada as a non-residenthas many advantages among which the low business start-up costs, however, it is important to know that in some provinces only specific types of structures can be employed.

It is important to know that theCanadian legislationdoes not impose aminimum share capitalwhen registering a business. However, there can be cases, such as those of setting up financial companies for which a minimum amount of money must be deposited as a reserve for business’ operations.

(Video) Can I open a branch of my business and become a permanent residence of Canada?

Below, ourcompany formation specialistsexplain theshare capital requirements whensetting up a company in Canada. You can rely on us for tailoredcompany registration services in Canada.

Types of Canadian companies and their share capital

There are severaltypes of companieswhich can be establishedin Canadaand for each one of them, aminimum share capitalmust be ensured. Even if the amount of money to be allocated as ashare capitalis not provided by the law, local and foreign businesspersons should pay attention to the following aspects:

  • for sole proprietorships the minimum share capital must not be a very large amount of money;
  • in the case of partnerships, the minimum share capital must be determined by the partners and each of them must participate with a specific amount of money;
  • in the case of corporations, these can have a paid-up share capital and a stated share capital account;
  • in the case ofentities set up by foreign companies, the latter must decide on the amount of money necessary for the operations.

Ourcompany registration agents in Canadacan guide foreign entrepreneurs with respect to theminimum share capital requirementswhen starting businesses here.

Below, you can watch a short video on how toopen a company in Canada as a non-resident:

The paid-up capital and the stated share capital account in Canada

TheCanadian corporation, or the limited liability company as it is known in Europe, is the most employed business form across every territory of this country. Those who want to open such a company in Canada must know that it must have two types ofshare capitals: apaid-up capitaland astated capital account.

Thepaid-up share capital of a Canadian companyrepresents the amount of money deposited by the members (shareholders) of the company, while thestated capital accountis represented by the amount of money paid in exchange for the shares issued by the company. Thestated capital accountwill hold thepaid-up share capitalof the company.

It should be noted that upon theincorporation of a company in Canada,the paid-up share capitalis defined according to the Income Tax. An important rule about these twotypes of share capitalis that thepaid-up capitalcan be lower than thestated capital. Also, thepaid-up share capitalwill also be established after thestated capitalhas been determined.

Ourcompany formation advisors in Canadacan explain thedifferences between the paid-up share capital and the stated capital account.

(Video) How to Start a LLC As a Canadian Resident

Shares issued by Canadian companies

Theminimum share capital of companies in Canadais divided into shares. These will represent the amount of money owned by the founders of the company and can be divided into various classes.

An important aspect to consider about theshare capital of aCanadian companyis that there are no restrictions related to the types of shares it can issue, however, when only a single type of shares is issued, these must have the following rights attached to them:

  • they must grant a voting right to those holding them;
  • they must grant the right of obtaining dividend payments;
  • they must grant the right to the division of assets in case the company is dissolved.

The share structure and theshare capital structure of a companycan be modified by amending the company’s Articles of Association.

Ourcompany registration representatives in Canadacan explain how theshare capital of a companycan be modified.

Altering the share capital of a company in Canada

There are two ways of modifying theshare capital of a company: by increasing or by decreasing it. It should be noted that only the stated capital can be increased or decreased, however, when decreased it cannot be lower than the paid-up capital.

Thepaid-up capital of a companycan only be distributed among the shareholders.

No matter the transactions involving the share capital of a company, these can be used astax minimization solutions in Canada.

For detailed information on the regulations related toopening a company in Canada as a non-residentand assistance in starting one, pleasecontact us.

FAQs

Can a non-resident Canadian Open a company in Canada? ›

Non‑Resident clients can now register their business for a CRA business number and certain program accounts using the Non‑Resident Business Number and Account Registration Web Form. For more information go to How to register for a business number or Canada Revenue Agency program accounts.

Can non-residents own a company in Canada? ›

Under Canada's federal and provincial laws governing corporations, a non-resident or foreign entrepreneur or investor may register a company in Canada from scratch, or by setting up a branch office or creating a subsidiary company in Canada.

What is a non-resident business in Canada? ›

A non-resident does not have to be a resident to operate a business or branch in Canada however, the business might be subject to a higher tax. Privately held corporations enjoy a federal tax rate of 9% assuming it's a Canadian Controlled corporation (for income up to $ 500,000).

Do you need to be a permanent resident to start a business in Canada? ›

Can I start a business in Canada without PR? You do not have to be a Canadian permanent resident or citizen to register your company in Canada. However, you are not allowed to work in your business without having a valid work permit.

Can a non resident open incorporation in Canada? ›

The Canadian Company Act is one of the most complete legal frameworks when it comes to starting a business in this country. It provides for the conditions for both residents and non-residents to open companies in Canada.

Can a temporary resident start a business in Canada? ›

Anyone can own a sole proprietorship, partnership or corporation in BC, regardless of their citizenship status. This makes B.C. the most flexible province in the country regarding non-resident businesses. However, non-residents must meet the following mandatory requirements for starting a business.

What is company non resident? ›

(B) Non Resident Company [Section 2(30)]

It means a foreign company whose control and management is situated wholly or partially outside India will be a non-resident company.

Can a non resident be a company director? ›

Companies cannot form with only one non-citizen director because of the resident director requirement. Non-citizen directors need to make sure that there is at least one other resident director on the board before they can be appointed a director.

How do I set up a new non resident business? ›

What Is the Process for Registering a Company in the US as a Non-Resident?
  1. Choose a unique name for your LLC or C Corp.
  2. Hire a registered agent service.
  3. File for incorporation with the state.
  4. Get an employer identification number (EIN)
  5. Obtain a physical U.S. mailing address.
  6. Set up a U.S. bank account.
18 Aug 2022

How do I declare a non-resident of Canada? ›

Residency status
  1. normally, customarily, or routinely live in another country and are not considered a resident of Canada.
  2. do not have significant residential ties in Canada and any of the following applies: You live outside Canada throughout the tax year. You stay in Canada for less than 183 days in the tax year.
18 Jan 2022

Do non residents of Canada pay tax? ›

As a non-resident of Canada, you are subject to Canadian income tax on most Canadian-source income paid or credited to you during the year unless all or part of it is exempt under a tax treaty.

Can a company be nonresident? ›

The non-resident company means the company which is not a resident company under the Income Tax Act. The resident company means either a company registered in India or a place and management of such a company is in India. 3.

How much money is required for Canadian business visa? ›

a designated venture capital fund confirming that it is investing at least $200,000 in a qualifying business or two or more designated venture capital funds confirming that they are together investing a total of at least $200,000 in such a business; or.

Can I get PR in Canada by buying a business? ›

The owner-operator policy is not a formal immigration program. Rather, it is a work permit issued under the federal Temporary Foreign Worker Program (TFWP). There is no annual quota on the number of work-permits that can be issued.

How much money is required for business PR in Canada? ›

If it is from a venture capital fund, minimum investment should be USD 200,000. If the investment is from an angel investor group, the investment should be at least USD 75,000. Applicants must also be a member of a Canadian business incubator program.

Can a non resident open a corporation in Ontario? ›

It does not require the directors to be Canadian Citizens or Permanent Residents, but does require a physical address for the business in Ontario and an agent for service who resides within Ontario.

Does a non resident corporation have to file a Canadian tax return? ›

A non-resident corporation must file a T2 return with the Canada Revenue Agency (CRA) if the corporation carried on business in Canada or disposed of a taxable Canadian property (TCP) at any time in the tax year.

Can a foreigner own a one person corporation? ›

Foreigners may register as OPC but are still subject to foreign ownership limits, applicable capital requirement and constitutional, and statutory restrictions on foreign participation or as specified in the Foreign Investment Negative List (FINL).

Can I move to Canada to start a business? ›

Canada's start-up visa program gives entrepreneurs the opportunity to immigrate to Canada in order to establish a new business. Immigrant entrepreneurs must demonstrate that their business is innovative, will create new jobs for Canadians, and can compete on a global scale.

Can I start my own business in Canada with an open work permit? ›

We are often asked the question, “Can a person with an open work permit do business in Canada?” As this article makes clear, the answer is yes. Having an open work permit allows you to operate your own business venture in Canada, but it can make achieving Permanent Resident status difficult.

Can a non resident be a director of a Canadian corporation? ›

Ordinarily, at least 25 percent of the directors of a corporation must be resident Canadians. If a corporation has fewer than four directors, however, at least one of them must be a resident Canadian.

Do non-resident companies pay tax? ›

Non-resident companies providing professional, consultancy, management, and technical (PCMT) services to Nigeria residents will be subject to tax at 10% final tax where such company has an SEP in Nigeria.

What is tax rate for non-resident companies? ›

2% - Taxable income above ₹ 1 crore - Up to ₹ 10 crore. 5% - Taxable above ₹10 crore.

Do non residents have to file a tax return? ›

Nonresident aliens must file and pay any tax due using Form 1040NR, U.S. Nonresident Alien Income Tax Return.

Can a non-resident be a shareholder? ›

There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner).

Is a foreign company a non-resident? ›

Presently, a foreign company is considered resident in India if the control and management of its affairs is situated wholly in India. To bring to tax those companies that are incorporated outside India but controlled from India, the condition of PoEM has been introduced.

Is it mandatory to have a resident director? ›

Section 149(3) of the Companies Act, 2013 provides that every Company shall have at least one director who has stayed in India for a total period of at least 182 days during the financial year.

Can I start a business with someone from another country? ›

A foreign individual can form and operate his LLC from wherever he happens to be. Although a non-resident of the U.S. can form and own an LLC generally, there are some restrictions on ownership of certain entities under various state laws that may restrict ownership for reasons other than citizenship or residency.

Can you start a business as a foreigner? ›

A foreigner (whether living abroad or those who are non-citizens residing in the US) can start a business of any kind: a sole proprietorship, partnership, Limited Liability Company (LLC), S-Corporation, or C-Corporation. However, working for the business and gaining wages will require documentation.

Do you need a citizenship to start a business? ›

Business Requirements for Noncitizens

There's no requirement for citizenship to operate a business in the U.S., so long as it's the right form of business. This means that a noncitizen can operate a limited liability company (LLC) or a C corporation, but not an S corporation.

What happens when you become a non-resident of Canada? ›

After you leave Canada, as a non-resident, you pay Canadian income tax only on your Canadian source income. However, only certain types of Canadian source income should be reported on your return while others are subject to non-resident withholding tax at source.

How much can a non-resident bring into Canada? ›

You can claim goods up to CAN$200 without paying any duty and taxes. You must have the goods with you when you enter Canada, and tobacco products or alcoholic beverages are not included in this amount. If you bring in goods worth more than CAN$200, you have to pay full duty and taxes on the total amount.

How long can a non-resident live in Canada? ›

Most visitors can stay for up to 6 months in Canada. If you're allowed to enter Canada, the border services officer may allow you to stay for less or more than 6 months. If so, they'll put the date you need to leave by in your passport. They might also give you a document.

Can a non resident have a Canadian bank account? ›

Can foreigners open bank account in Canada? Yes! Foreigners are eligible to open bank accounts in Canada as long as they provide sufficient identifications properly. However, the required documentation depends on what your designated financial institution requested.

Who pays no income tax in Canada? ›

amounts that are exempt from tax under section 87 of the Indian Act (Section 87 tax exemption) most lottery winnings. most gifts and inheritances. amounts paid by Canada or an allied country (if the amount is not taxable in that country) for disability or death of a war veteran due to war service.

Does CRA know if you leave the country? ›

Canada will know when and where someone enters the country, and when and where they leave the country by land and air. The Government of Canada will achieve this by working closely with its U.S. counterparts and exchanging biographic entry information on all travellers (including Canadian citizens) at the land border.

What is required for non resident to become a member of a company? ›

The Companies Act, 2013 allows the NRIs, foreign residents and foreign nationals to act as directors in an Indian company. The NRIs and foreign nationals must obtain a Director Identification Number (DIN) and Digital Signature Certificate (DSC) to become a director of an Indian company.

What is a non registered company? ›

What is an unregistered company? An unregistered company is a rare form of incorporated company that is not formed or registered under the Companies Act 2006 (CA 2006) or under any other public general Act of Parliament.

Can a non resident alien open a business? ›

Can a foreign national start a business in the U.S. without being a resident? “Yes, You Can!” Every day, foreign nationals are setting up US businesses, from major enterprises to small shops. Accessing the US marketplace is the key to success for many businesses around the world.

How much bank balance is required for Canada? ›

Proof of Funds – Canada Express Entry
Number of Family MembersFunds Required (in Canadian dollars) 2021
1$13,213
2$16,449
3$20,222
4$24,553
4 more rows

Can you buy Canadian PR? ›

Individuals can obtain sponsorship for their PR through a family member (spouse, parent, etc.) or an employer. Unless you are born in Canada, becoming a permanent resident is the only way to open the door to eventually becoming a citizen.

How long can you stay in Canada with a business visa? ›

Business visitors usually stay in Canada for a few days or a few weeks, but are able to stay for up to 6 months.

Can I start a business in Canada as a foreigner? ›

It's not just Canadian citizens who can reap the benefits of running a business in Canada, either: there are plenty of options for foreign entrepreneurs to do business here, too.

Do you need to be a Canadian citizen to start a business? ›

It is possible to open a company in Canada without being a Canadian citizen or a landed immigrant (permanent resident). In this case, you are entitled to set up a partnership or a corporation with one or more permanent residents or landed immigrants.

Do small businesses need PR? ›

A strong PR campaign creates a recognizable message across multiple media platforms. This is important for small businesses, which lack the name recognition of larger companies and corporations. “When small businesses don't have PR, things are all over the place,” Simonian said. “PR keeps things consistent.”

How much should I invest in Canada to get PR? ›

2. How Much Money Do I Need to Invest to Qualify for the Investor Visas? Many people will ask “how much do I need to invest to get Canada PR?” In order to invest in the government, you must provide $150,000 – $800,000 CAD to the Canadian government. After some time the government will provide you Permanent Residency.

Can you get Canadian citizenship by buying property? ›

There is no residency or citizenship requirement for buying and owning property in Canada. You can occupy a Canadian residence on a temporary basis, but you will need to comply with immigration requirements if you wish to have an extended stay or become a permanent resident.

Can we convert business visa to work permit in Canada? ›

3. Converting Visitor Visa to Work Permit in Canada. After you get a positive LMIA from a Canadian employer, you can apply for a work permit from inside Canada. Please note that you can apply online for an employer-specific work permit from inside Canada until February 28, 2023.

Can I open a company in Canada on visitor visa? ›

You can come to Canada as a visitor to search for Canadian employment. However, you cannot legally work in Canada without a work permit. If you secure a job offer from a Canadian employer while in Canada on a visitor visa, you must apply for a work permit before you can begin working.

Can a foreigner be a director of a Canadian company? ›

Ordinarily, at least 25 percent of the directors of a corporation must be resident Canadians. If a corporation has fewer than four directors, however, at least one of them must be a resident Canadian.

Can I move to Canada to start a business? ›

Canada's start-up visa program gives entrepreneurs the opportunity to immigrate to Canada in order to establish a new business. Immigrant entrepreneurs must demonstrate that their business is innovative, will create new jobs for Canadians, and can compete on a global scale.

How a foreigner can open a company in Canada? ›

If you are a non-Canadian who wants to start a business in Canada and live in Canada, you will have to immigrate to Canada or find one or more Canadians to team up with. The only way you can live in Canada permanently and operate your business is if you immigrate to Canada.

How much money is required for business visa in Canada? ›

a designated venture capital fund confirming that it is investing at least $200,000 in a qualifying business or two or more designated venture capital funds confirming that they are together investing a total of at least $200,000 in such a business; or.

How long can I stay in Canada as a business visitor? ›

What is a business visitor. Business visitors usually stay in Canada for a few days or a few weeks, but are able to stay for up to 6 months.

Can a non-resident be a company director? ›

Companies cannot form with only one non-citizen director because of the resident director requirement. Non-citizen directors need to make sure that there is at least one other resident director on the board before they can be appointed a director.

Can a non-resident become a director? ›

Ultimately, a foreign person must establish 'ordinary residence' or Australian residency and must be personally present or ordinarily resident to be appointed a director.

Can a non-resident open a corporation in Ontario? ›

It does not require the directors to be Canadian Citizens or Permanent Residents, but does require a physical address for the business in Ontario and an agent for service who resides within Ontario.

What documents do you need to start a business in Canada? ›

Incorporation documents
  • Name of corporation.
  • Location of corporation's registered office.
  • Name of incorporators.
  • Name of directors or the minimum and maximum number of directors.
  • Share structure of the corporation.
  • Restrictions on business or transfers of securities.
  • Any additional provisions.
7 Jul 2022

Can you buy Canadian PR? ›

Individuals can obtain sponsorship for their PR through a family member (spouse, parent, etc.) or an employer. Unless you are born in Canada, becoming a permanent resident is the only way to open the door to eventually becoming a citizen.

How much does it take to start a company in Canada? ›

The prices can vary from $500 to upwards of $10,000. The fees of getting registered differ in each province. For example, in Ontario, the cost of getting registered starts at 134$+ tax. In Alberta, a small business startup fee starts at 113$ + tax.

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