How to Start a Non-Resident Business in Canada

How to Incorporate in Canada as a Non-Resident

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Starting a non-resident business in Canada is possible, however, you will have to meet certain requirements. The laws differ depending on your type of business as well as the province in which it will operate.

To start a business in Canada you will also need to satisfy a residency requirement by providing a Canadian address. This may mean partnering with a Canadian citizen or immigrant or relocating to Canada.

If You Are a Canadian Citizen

If you have or establish a Canadian address, not a post office box, and are a Canadian citizen or a landed immigrant, you can register your business as a sole proprietorship⁠ or any of the other permitted forms of business in Canada.

You can then register your new business in the province in which it is located. Because business registration is governed by each province, the procedure to register a business name may differ among provinces. For example, the rules for registering your business in Alberta may differ from those in Quebec or Ontario.

If you intend to incorporate your business and plan to operate Canada-wide, you may wish to incorporate federally rather than provincially. Federal incorporation gives you the right to do business across Canada using the same name.

If You're Not a Canadian Citizen

If you're not a Canadian citizen or landed immigrant, you can still form a business in Canada, but your options are more limited:

  • You can form a partnership with a Canadian living in Canada. You can then use their address for starting your business in Canada.
  • You can start an incorporated business. You would still need a Canadian address to enjoy the tax benefits of having a Canadian controlled private corporation (CCPC), as well as have the correct number of Canadians on your Board of Directors and meet all the other requirements for such a corporation. The correct number of resident Canadians depends on the jurisdiction in which you incorporate. In Canada, you may incorporate federally or provincially. It is important to understand the advantages and disadvantages of each form of incorporation, as well as the required procedures.

The residency requirements for the directors of companies incorporated in Canada apply to all types of Canadian corporations, not just CCPCs.

Foreign Corporations Wishing to Operate in Canada

Existing foreign corporations can register to operate in Canada by either:

  • Opening a branch office. To open a branch office, the foreign corporation must make an application for registration as an extra-provincial or foreign corporation in each province in which the business intends to operate.
  • Incorporating a subsidiary. A subsidiary is a Canadian corporation whose shares are held by a foreign parent company. A subsidiary can be incorporated federally or provincially. Compared with a branch office, incorporating a subsidiary gives the parent company limited liability from the actions of the subsidiary.

The director residency requirements apply in either case.

The Bottom Line

This information is based on the assumption that you will continue to be a nonresident. However, if you are considering moving to Canada to start a business, you will need to apply through Canada's immigration program. Your other option for starting a business is to remain living in your current location and partner with one or more Canadian citizens or landed immigrants. That way, you will be able to provide a Canadian address necessary for starting your business.