How to Set Up a Business in Canada

How to Set Up a Business in Canada main image

There are a number of reasons why Canada has solidified its position as an attractive location for a company to set up shop and do business.

With a welcoming business environment, and a highly educated workforce, Canada is an appealing place to live, work, and invest. Due to its low corporate tax rate and trade agreements with key markets in the US, Europe, and Latin America, Canada is regarded as a strong base for operations and international expansion.

It’s little wonder Forbes named Canada as the sixth best country in the world to do business in 2019. Similarly, as a testament to the country’s solid infrastructure and transparent policies, Canada was ranked 22nd (out of 190 countries) by The World Bank in its Ease of Doing Business Survey this year. In this survey, it ranked particularly well as a country for starting a business, protecting minority investors and getting credit.

A natural choice for Americans keen to build a business abroad, the ‘Great White North’ offers businesses the opportunity to start fresh within a globally focused country.

There are, of course, plenty of rules, regulations and logistical hurdles to overcome before setting up a business in Canada, but all in all, the process is pretty straight-forward. Here are the essential things to know.

Registering your company

You’ll need to tick off all the legal boxes, and the first hurdle is legally incorporating your business.

Part of this involves using the Canadian Government’s Business Registration Online (BRO) service to register for a business number.

The unique number will be used during all the company’s future communications or transactions between federal, provincial or municipal governments in Canada. It also paves the way for future account processes including corporation income tax and payroll deductions.

Once you’ve registered your business number, you will need to complete the business registration online with a regional registry service.

In some locations in Canada, you may need to have a Canadian address, or at least form a business partnership with a Canadian living in Canada to start the business. If in doubt, seek legal advice.

Immigration and visas

If you’ve already established a company in your home country and just want to expand your business in Canada, the process is fairly simple. All you need to do is register your new business in the province(s) you want to open new offices, as well as register for extra-provincial incorporation.

But if you want to start a brand-new business, the process is a little bit trickier.

You’ll need to get a work permit first, and if you’re planning on living and working in Canada you can apply for one of two:

  • Start-up visa, which allows you to move to Canada permanently to start your own business
  • Self-employed person status, where you basically work freelance in Canada

Find out more here.

You may not want to move to Canada or obtain resident status to start a business, and that’s OK, but you will need to partner with a Canadian citizen to form a partnership or corporation.

If your business has a board with fewer than four directors, at least one of these will need to be Canadian. If there are four or more members of the board, then at least 25 percent have to be Canadian.

US business owners planning to work at their place of business will need to obtain “working status” from Citizenship and Immigration Canada (CIC).

Even if you don’t plan on working at your new business, you’ll probably still need to obtain a temporary work visa of some kind to conduct business when visiting your Canadian business.

Language

English and French are the official languages of Canada. The use of French varies depending on the province – except for Quebec.

If doing business in Quebec, inquire whether you’ll need to bring a French interpreter.

Business culture

Canadians are known for their overall polite nature, tolerance and relatively informal attitude. However, Canadians are slightly more reserved than their southern neighbors. The country’s values are based on respect, equality, diversity, justice and good government.

Doing business in Canada means working within a culture that blends American, British, and French tendencies (practices vary depending on the region). Canadians will often identify themselves with their province so be prepared for regional differences.

You will find that business meetings in Canada tend to be more formal than those in the US, however, people may still try to make small talk before the meeting starts.

Punctuality is highly valued in Canada. It’s advised to arrive five to 10 minutes early for any meeting. Greetings start with a handshake, followed by a personal and company introduction. And remember, if meeting with a French-Canadian colleague of the opposite sex, expect to be greeted with a double-cheek kiss.

When it comes to closing a deal, reaching an agreement, or following an official visit, small business gifts may be given. Traditional gifts from your country of origin are particularly enjoyed – but expect gifts to be unwrapped when received.

Finally, as a bilingual country, ensure your business cards have both French and English translations.

The Great White North of Canada boasts a myriad of opportunities for new business ventures and meaningful business relationships. Hopefully this guide will help you plant your first foothold in this dynamic, exciting home for new business ventures.

Written by Niamh Ollerton

Niamh is Assistant Editor of TopMBA.com, creating and editing content for an international MBA student audience. Having gained her journalism qualification at the Press Association, London and since written for different international publications, she's now enjoying telling the stories of the business world.  

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