Register a Company in Canada

Register a company in Canada is a key step for foreign entrepreneurs who want to expand their businesses in Canada. And also for Canada’s startup visa holders.

In this guide, we answer this question in detail:

How can I register a company in Canada as a foreigner?

1️⃣ Step 1: Choose Your Business Structure

Your first major decision is selecting a legal structure. The two most common options for foreign businesses are:

Canadian Subsidiary
(Corporation)

• It’s usually created when the owner wants more growth, to limit liabilities, and to use different tax rates.
• It can be registered provincially or federally and operates as a separate legal entity from the shareholders.
• Shareholders have limited liability; meaning they only lose up to the amount of their shares, and financial crises are the company’s responsibility, not the individuals’.
• It enjoys tax advantages.
• The registration and setup costs are higher compared to other models, and it has more additional expenses.
• Forming a corporation in provinces like Ontario, Alberta, or British Columbia might take time, but many growing businesses find it worthwhile for improving their profits.

Partnership

• Ownership is divided between two or more people.
• A formal agreement is set up between the partners that specifies each person’s share, responsibilities, and details of the collaboration.
• It has tax advantages.
• Costs, profits, and losses are divided among the partners, reducing financial risk.
• Joint decision-making can be challenging.

Sole Proprietorship

• One person owns and runs the entire business.
• It has low setup costs and a very simple structure.
• The owner can manage all activities completely according to their own preferences.
• All profits from the company go directly to the owner.
• In case of bankruptcy or financial loss, all debts and damages are the owner’s responsibility.

Co-operative

• Members run a shared business together.
• Decisions are made through consensus or voting.
• Ownership and control are in the hands of the people who provide the business’s services or use them.
• This model is less common in Canada.

Branch Office

This is an extension of your foreign company, not a separate legal entity.

• Advantages: Lower startup costs and simpler oversight by the parent company.
• Disadvantages: No liability separation (your foreign company is liable for the branch’s debts), and it may be subject to a branch tax on profits sent abroad.

2️⃣ Step 2: Decide on Federal or Provincial Incorporation

This choice determines under which law your business will operate.

» Federal Incorporation (under the Canada Business Corporations Act):

Allows you to operate your business under the same name across Canada.

Has a director residency requirement: At least 25% of directors must be resident Canadians. If you have fewer than four directors, at least one must be a resident of Canada.

» Provincial Incorporation (e.g., under Ontario or British Columbia laws):

May be sufficient if you plan to operate primarily in one province.

Director residency rules vary: Provinces like British Columbia, Alberta, Ontario, Quebec, and New Brunswick have no residency requirements for directors. Others, like Manitoba, have rules similar to the federal level.

3️⃣ Step 3: It’s Time to Registeration

Here are the key steps to formally establish your business:

1. Choose and Search Your Company Name: You must conduct a NUANS (Newly Upgraded Automated Name Search) report to ensure your desired corporate name is unique and available. This is required for federal and most provincial incorporations.
2. Prepare and File Incorporation Documents: You need to file “Articles of Incorporation” with the relevant government body (federal or provincial). These documents outline your company’s basic structure.
3. Obtain Your Business Number (BN): This is a crucial 9-digit number from the Canada Revenue Agency (CRA) that identifies your business to the government. You can register for it online, by mail, or by fax. The BN is your gateway to various tax accounts.
4. Register for Tax Accounts: When registering for your BN, you can also open necessary tax program accounts, such as:
   • Corporate Income Tax (RC)
   • GST/HST (RT) (mandatory if annual taxable sales exceed $30,000)
   • Payroll Deductions (RP) (if you plan to hire employees)
5. Open a Canadian Bank Account: You will need a local business bank account. This process can be detailed for non-residents, requiring certified copies of incorporation documents, corporate bylaws, and identification for directors and signing authorities.
6. Register Extra-Provincially: If you incorporate federally but plan to operate in a specific province, you must also register extra-provincially in that province. This step is also necessary for foreign companies setting up a branch office.

4️⃣ Step 4: Key Considerations & Ongoing Requirements

• Registered Office Address: Your company must have a registered office address in Canada (cannot be a P.O. Box). This can be provided by a legal agent or service firm
• Licenses and Permits: You may need industry-specific or municipal licenses to operate legally
• Ongoing Compliance: This includes filing annual returns, maintaining corporate minute books, and staying current on tax filings (corporate T2 return, GST/HST, payroll)

🔸 Legal, Immigration & Residency Considerations

• No Citizenship Requirement for Owners: Foreigners can own 100% of a Canadian corporation.
• Director Residency: As noted, this is a key legal requirement that depends on your choice between federal or provincial incorporation
• Immigration Status vs. Business Registration: Incorporating a company does not grant you the right to live or work in Canada. To manage your business from within Canada, you need appropriate authorization. Common pathways include:
  • Start-Up Visa Program: For innovative entrepreneurs with support from designated Canadian investors.
  • Intra-Company Transfer Work Permit: For employees transferring to a Canadian branch/subsidiary of a foreign company.
  • C11 Entrepreneur Work Permit: For entrepreneurs who will own and actively manage their business in Canada.

Final Note

Registering a company in Canada can be a good opportunity for international entrepreneurs and investors. Canada offers various support programs like tax incentives and access to big markets, creating more motivation for investment and registration.

The key to success in starting and register a company in Canada is full knowledge of local laws, getting proper legal and financial advice, and creating a detailed business plan.

Also, understanding the market and customer needs helps entrepreneurs compete better and plan a good marketing strategy after choosing the name and registering the company in Canada.

FAQs