How to Start a Business in Canada in 2022: Guide
Stable political and economic situations, low taxes, and developed infrastructure are the reasons why entrepreneurs from different countries seek to register a company in Canada. The country is open for foreign business, as well as welcomes investments and business immigrants.
It has low inflation, unemployment, high wages and low business expenses. The country actively invests in information technology, medicine, education. Opening a company in Canada in 2022 allows unlimited access to the North American market.
What you need to know about starting a business in Canada
If you're not Canadian, to open a business here, you should do the following:
Immigrate to Canada, in which case you can solely own a business;
Find a resident partner who will co-own the business - a convenient way if you are not going to live in the country (with a few exceptions). Not every province allows a foreigner to be the sole owner, and if it does, it often raises taxes heavily;
Starting a business when you immigrate
If you decide to live in Canada, you should apply to come here as a business immigrant, which will help you quickly obtain residency status. There are two types of programs - startup visas and for self-employed people.
Startup visa program
To qualify for a startup visa, you must:
- Own a business;
- Obtain a letter of support from an authorized financial institution;
- Know English and/or French;
- Must have sufficient capital to settle and live in the country before the business begins to make a profit.
Self-Employed Individual Program
To come to Canada as a self-employed person, you must have experience in a field related to culture or sports, and you must be willing to contribute to their development. You will also need a certificate of education and language ability.
How to open a business without living in Canada
If you are a non-resident, before registering a business in Canada 2022, find out in advance about the requirements that apply in your desired province. If a foreigner cannot fully own a business here, you will have to form a partnership or corporation where at least 25% of the directors will be Canadian.
In some regions, such as British Columbia, it is possible to set up a wholly non-resident-owned business. Also, you should be aware that there are areas where foreigners are not allowed to work (IT-OFFSHORE specialist will tell you more about it).
To open a business in British Columbia, you must meet these requirements:
- Choose the form of ownership - partnership, corporation individual enterprise;
- Make a business plan;
- Have an actual physical office;
- Get a work permit from Citizenship and Immigration Services;
- Apply for Investment Canada (under the Investment Act);
- Get the licenses you need to operate your business;
- Open a bank account in Canada.
The corporate tax in Canada at the federal level is 15%, which is one of the lowest in the world. To stimulate economic growth in the country, the Canadian authorities continue to adjust it. For example, in 2010 the rate was at 18%.
You also have to pay the provincial tax rate. It differs from region to region. For example, in Ontario, the income over $150,000 per year is taxed at 12.15% and in Quebec - 25.75%.
At the same time in Canada there are various benefits that reduce the tax payment. For example, residents in the first year of immigration can get a credit of up to $456 for a single person and $598 for a family.
Taxes for non-residents
A business that is owned by a non-resident may be subject to a higher tax rate. For example, the federal tax rate for a company that Canada controls is 9% ($500,000), while it can go up to 29% or 38% for non-residents. However, if Canada has signed a double taxation treaty with the country, so the rate goes down to 15%. Thus, each case is considered separately, and IT-OFFSHORE specialists will help you more precisely.