How to Open A Foreign Company Branch In Canada
‘Starting a business in Canada is an excellent way to secure Permanent residency for you and your family’.
– Chris Brown, RCIC and Managing Director, Tudor House Immigration Service.
Are you a budding entrepreneur with excellent business idea? Do you want to launch a new business or open a branch in Canada? Wow! That’s awesome. Canada is a great place to open a new company branch.
Tudor House Immigration Service is here to help you enjoy your business immigration services through several immigration pathways including express entry, start up Visa.
Benefits of Starting A Canadian Business
Businesses in Canada enjoy so many wonderful opportunities such as:
- Access to government grants,
- Tax credits,
- Skilled workforce,
- Opportunities to obtain seed funding and Venture capital, and
- Reasonable cost of living.
These opportunities are not only available to Canadian citizens, but also foreign investors can benefit from it.
2 Ways to Start A Business In Canada
Foreign investors that wish to establish their business in Canada have two main options such as:
- Opening a new branch or
- Incorporating a subsidiary.
The foreign parent company has the option to choose which of these two options are suitable to their needs.
Branch versus Subsidiary
A branch is an extension of a parent company, while a subsidiary is a separate corporation that is completely controlled by a parent company. Parent companies are held liable for the actions of their subsidiaries.
Things to Consider before you Open A Company Branch In Canada
There are several factors to consider before you decide to open a new branch or incorporate a subsidiary. They are:
- Tax implications
- Capacity to raise capital
- Access to Canadian special programs
- Parent Company’s level of exposure to liabilities etc.
Thus, foreign entrepreneurs are advised to seek guidance from a business immigration consultant, qualified legal and accounting professionals to enable them determine the best business structure based on their current situation.
Components Of A Branch Office In Canada
- The activities of a branch office are dependent on the parent corporation.
- The parent company is liable for all her actions in Canadian market.
- It bears the same name with the parent company.
- The foreign company appoints a legal representative that will handle the operations in Canada.
- It is simpler to register a branch office than a subsidiary company in Canada.
- Tax on the branch office is levied on the profits made by the parent company in Canada.
How to Open A Foreign Company Branch In Canada
Before you register your new business in Canada, keep in mind that every Canadian territory and province has their own rules of business registration. Besides registering your business provincially, you can also register it on a federal level.
Businesses that are registered on a federal level can operate across Canadian market, with various set of annual filing rules.
A foreign corporation that wants to start a business in Canada must register the business with local authorities in the province it tends to operate. If the parent company wants to operate in different provinces, then it must register a branch in each of the territories.
When creating a business in Canada, the following documents must be submitted to the local authorities:
- Parent company information plus its certificate of incorporation.
- The incorporation details about the proposed branch office.
- A declaration of the parent company with the names of the branch directors.
- Details about the local representatives of the parent company.
Tudor House Immigration Services can help you immigrate to Canada through business. You must be a foreign investor or entrepreneur and be willing to invest at least $150,000 CAD within 2 years of immigrating to Canada. You must also demonstrate fluency in English or French. We are Professional, courteous immigration consultants, so you will get straightforward, clear-cut answers to all your business immigration questions from a seasoned Regulated Canadian Immigration Consultant (RCIC) Our services are integral, discrete, and confidential.
How Much Money Is Required To Open a Company in Canada?
The cost of opening a new company in Canada is dependent on some factors such as:
- The size and type of your business
- Office equipment
- The type of product or service you offer,
- Legal and registration fees
- Overhead expenses
- Marketing and promotion and
The good news is that it doesn’t have to break the bank. We can help you calculate your startup costs. We are professionals in guiding business owners to Canada.
Can An Immigrant Start A Business In Canada?
Whether you are a foreign small business or the owner of a large corporation, here are four routes that can help you start and operate a business in Canada successfully.
Entrepreneur Work Permits
If you are a foreign investor that wants to immigrate and establish a business in Canada, then you will be eligible to come to Canada under Entrepreneur Work Permit Program. This is a program for foreign entrepreneurs who own at least 50% of shares in a Canadian business.
The business must have the capacity to create jobs for Canadians and contribute to Canada’s economic development. After successfully establishing and managing their corporations for at least one year, foreign entrepreneurs will be eligible to apply for permanent residence under several immigration programs in Canada.
Intra Company Transfer (ICT)
Foreign entrepreneurs can expand their businesses in Canada. Foreign nationals immigrating to Canada on the ICT Work Permits have several routes to permanent residency in Canada, after at least one year of working experience in Canada.
Provincial Nominee Programs (PNP)
Provincial immigration pathways are available to foreign nationals to invest, work and settle permanently in Canada. This immigration pathway is available in all Canadian provinces. Most foreign entrepreneurs use the Entrepreneur streams of British Columbia PNP and Ontario PNP.
Owner-Operator LMIA Program
This was a popular pathway until its closure in April 2021. Most foreign business owners use the LMIA pathway to immigrate to Canada. However, you can still use the Entrepreneur Work Permit above to achieve the same result.
Can A Non Citizen Start A Business In Canada?
Yes! This is one of the reasons why Investment Canada Act was created. The aim of this program is specifically to govern a non Canadian citizen who wants to establish a business or acquire an existing Canadian business.
Requirements to Start A Canadian Business
You do not need to be a Canadian resident or citizen to open a new branch or business in Canada. However, different provinces have different requirements and services tax rates for new businesses. For example, in order to incorporate, Ontario requires that 25% of the directors must be Canadian citizens.
In British Columbia, if 51% of the shareholders are non Canadian residents, the business will lose small business tax reduction and the corporate tax rate will increase from 15% to 26.5%.
Can I Buy Business In Canada As A Non-Resident?
Yes! Canada’s federal and provincial laws governing corporations permits a non-Canadian resident or investor or entrepreneur to register a new business from scratch, or open a new branch or incorporate a subsidiary in Canada.
Options Available To Foreign Investors in Canada
There are varied options available to foreign entrepreneurs interested in starting or buying a business in Canada. First, you must decide whether you want to start a business in Canada by immigrating or while living abroad.
Other options for buying a business as a non Canadian citizen include temporary or permanent residence routes.
First, with the support of a venture capital fund or designated investor organization, you will be eligible to apply for Canada’s Start up Visa Program. This program also requires that you must be proficient in English or French, have a qualifying business and have enough funds that will support you and your family when you immigrate to Canada.
Second, if you have an established business and then wish to expand to Canadian marketplace, please keep in mind that each province or territory has their own business registration procedures.
If you wish to expand to multiple provinces or territories, then you will be required to contact them and meet the requirements of extra- Provincial incorporation process. Generally, you will be required to hire an agent for service. This agent must be a permanent resident of that province or territory and must be at least 18 years.
However, non-Canadian citizens who do not have already established businesses in their country, can open a business in Canada. Owner-operator policies permit a temporary work visa to entrepreneurs or foreign investors who want to buy or start their own business. Then, under Canada’s Temporary Foreign worker program, the investor or entrepreneur can apply for a work visa as a top management level employee or owner.
Once a non Canadian citizen has identified a Canadian business to buy, the investor must submit a Labour Market Impact Assessment (LMIA) together with a corresponding business plan. This business plan must prove that the purchase of the business by a foreigner will lead to creation or retention of Canadian jobs, among other things.
Once the foreign business owner submits the assessment with a corresponding business plan, and LMIA has been issued, the entrepreneur will now apply for a renewable temporary work permit.
After immigrating to Canada on a temporary work permit, the non Canadian citizen may begin to apply for a permanent residence as a federal skilled worker under a provincial immigration program or Express Entry Program. This process may take up to two to three months, depending on the location of the applicant.
Why Choose Tudor House Immigration Service?
As experienced immigration consultants, Tudor House Immigration service will guide you in discussing the potential options of buying, starting a new business or opening a new branch in Canada as a foreign national or non-Canadian citizen. Our dedicated, courteous and professional team will successfully walk you throughout the process.
Tudor House Immigration Services delivers reliable, professional, trusted and courteous immigration consultation and representation to immigrants wishing to relocate, live, start a new business or open a company branch in Canada.
Let’s begin your business immigration journey today!