REGISTER FOREIGN BUSINESS IN CANADA

 

If you wish to register your foreign business in Canada (i.e. a company or business that has been incorporated in another country other than Canada), you will need to decide which province or territory you wish to register in.  It will depend on what city in Canada that you wish to conduct business.

Register a Foreign Business in Canada – Types of Registrations

The following are some of the different types of registrations that can be done by foreign owned companies in Canada:

• Limited Liability Companies registered outside of Canada
• Limited Companies registered outside of Canada, i.e. S corporations, C corporations, etc.
• Not-for-Profit Companies and Charities registered outside of Canada

Register a Canadian Business with Foreign Ownership

You can also register a Canadian business with foreign ownership.  Some examples of this are:

• Sole Proprietorship (one-person business) by a non-resident
• Partnership Registrations (two or more persons) by a non-resident
• Limited Partnership Registrations with a non-resident general partner
• Provincial incorporation with non-resident shareholders (owners)

Restrictions on Registering a Canadian Business with Foreign Ownership

The main restriction would be the non-resident requirement for Canadian companies to have at least 25% of the directors of the company be (1) a Canadian citizen or Permanent Resident, and (2) live in Canada.  Otherwise, shareholders (owners) do not have to be residents of Canada.  Below is a list of the jurisdictions in Canada and the requirements to have a resident director:

• Federal Companies – 25% of the directors must be Resident Canadians (see below)
• British Columbia Companies – No requirement
• Saskatchewan Companies – No requirement
• Manitoba Companies – 25% of the directors must be Resident Canadians (see below)
• Alberta Companies – No requirement
• Ontario Companies – No requirement
• Nova Scotia Companies – No requirement
• New Brunswick Companies – No requirement
• Newfoundland and Labrador Companies – No requirement
• Prince Edward Island Companies – No requirement but there are ancillary requirements
• Northwest Territorial Companies – No Requirement
• Nunavut Companies – No requirement
• Yukon Companies – No requirement

The two best provinces in Canada to register in, where there is no residency requirement for directors, are British Columbia and Ontario.  The reason for this is they are high commerce areas in Canada and are a good option for selling products and services.

Definition of a Resident Canadian

A “resident Canadian” means an individual who is:

1. a Canadian citizen ordinarily resident in Canada;
2. a Canadian citizen not ordinarily resident in Canada who is a member of a prescribed class of persons; or
3. a permanent resident within the meaning of the Immigration and Refugee Protection Act (Canada) and ordinarily resident in Canada;

Register a Foreign Business in Canada – Across all Provinces and Territories

If you wish to do business across all of Canada you may need to register in each of the 13 provinces and territories of Canada individually.    Feel free to contact us before purchasing any service to be sure you are on the right track.  In some cases, registering in each province/territory may not be necessary.  Feel free to contact Resources for Canadian Business Owners Inc. to obtain more information.

In particular, you are required to register in every province where (1) you wish to open a bank account, (2) you plan on having employees, agents, representatives, contractors, etc. in a province, OR (3) if you plan on having a warehouse, office, etc. in the province (whether owned or rented).

Choosing to Register a Federal Company versus a Provincial Company to Operate Across Canada

Foreign companies registering to operate in Canada cannot register in the federal jurisdiction.

You may wish to register a Canadian company, with foreign ownership, in the federal jurisdiction in the belief that this will allow you to conduct business across Canada automatically.  This is not true.  All federal companies must register their company in the province where its head office is located and should also register in all other provinces where it

1. has an office, warehouse, etc. in a province,
2. it has employees, contractors, agents, representatives, etc. in a province, and/or
3. it wishes to open a bank account in a province.  

Therefore, it really does not matter if you register federally or provincially, it does not give you any more advantages except the name of your company is easier to obtain in a province or territory.

Further, some individuals will hire a Canadian individual who can act as the non-resident director on a federal company.  This is very expensive and further there is no guarantee this person will continue to act as the non-resident director forever. 

As well, this person has rights to approve certain matters and transactions related to the company.  It would not be advisable to do this.  If a non-resident director changes his/her mind in acting as a director of your company, then the only option is to “continue” (move) the jurisdiction of the company to a province/territory.  This can be expensive.  Contact us if this is an issue for you.

Selling on Amazon Canada

If you are planning on selling your products in Canada on Amazon you will be required to:

1. Extra-Provincial Register Your Company in at least one province in Canada
2. Obtain a federal business number (TAX Id)
3. Open an HST/GST sales tax Account and Import/Export Account

If you require assistance with registering your company in Canada so it may sell on Amazon, you can purchase that service at:  Register to Sell on Amazon

Requirement for an Address

If you register a Canadian company with foreign ownership, you will need to provide a physical address for the company in the province/territory where you are registering.  This can be a virtual physical address. 

You can purchase an address in Ontario from us at:  Ontario Address

Options to Purchase a Foreign Registration in Canada

Agent for Service

If you extra-provincially register your company in Canada you will be required to obtain a person who can act as agent for service.  Additionally, this person must live in the province.  We will be able to assist with obtaining agents for you in the provinces and territories of Canada. 

Resources for Canadian Business Owners Inc. acts as agent for service in Ontario for companies extra-provincially registering, the Ontario Securities Commission (OCS), the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and Vessel Registration.

Free Consultation

If you wish to register your business in Canada or, alternatively, register a Canadian business with foreign ownership fee free to contact us for a free consultation.

Additional Municipal Licensing Requirements

There may be additional municipal licensing requirements depending on the nature of business you wish to conduct in Canada. If you feel that you wish to register your business right across Canada then please send us a note outlining your plans and the type of business you wish to conduct.

Nuans Name Search Report

All provinces and territories will require you to provide a name search report.  We will assist you with performing searches of your company’s name to ensure there are no other companies in Canada that have the same or too similar a name.

Register Foreign Business in Canada – Canadian Taxes

You may be subject to filing a Canadian tax return in Canada.  You will need to contact a Canadian accountant and/or Revenue Canada Agency immediately to obtain advice as to the rules and regulations for the province or territory in which you register.  

Federal Business Number

All foreign corporations registered in Canada must obtain a Federal Business Number.  This is a 9-digit number which is allocated to the company.  Please see the section on Federal Business Number for more information.

Goods and Services Tax/Harmonized Sales Tax

If your worldwide profits are more than $30,000 a year you will need to charge HST/GST on services provided and goods sold in Canada by the foreign company.  Refer to the section respecting registering for a Federal Business number for more details on these requirements.  The Revenue Canada Agency will expect you to report annually on the tax charged.  As part of our service of obtaining a Federal Business Number for your foreign company, we will discuss with you whether you will need a GST/HST number.  The HST/GST account will be open as an account connected to your Federal Business Number.

Importing and Exporting

If you intend to import or export goods to and from Canada you will be required to obtain an Export/Import Number.  This is an account number that will be connected to the Federal Business Number and if you purchase our federal business number service we will obtain an import/export number for you if it is required at the same time.  The Revenue Canada Agency will require you to report on the amounts imported and exported on an annual basis.

In order to determine whether you need to be registered it helps to understand what the legal requirement for registration is.  Feel free to contact us if you wish to be registered and we will be glad to assist in helping you to determine what the requirements would be for your particular situation.

Provincial/Territorial Annual Return Reporting

Most provinces and territories require that any company registered in its province/territory must submit a corporate annual return to the Companies Office in the province or territory the company is registered.

What Constitutes Carrying on Business in Canada

Before registering in a province of Canada you should first determine whether under what circumstances registration is required.  For the statute requirements for registering in the various provinces see below:

• Statute Requirements to Carry on Business in British Columbia

• Statute Requirements to Carry on Business in Nova Scotia

• Statute Requirements to Carry on Business in Saskatchewan

 Ontario

The Extra-Provincial Corporations Act (Ontario) governs foreign companies carrying on business in Ontario.  Sections 1(2) and (3) indicate that “(2) For purposes of this Act, an extra-provincial corporation carries on its business in Ontario if, (a) it has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario, (b) it holds an interest, otherwise than by way of security, in real property situate in Ontario, or (c) it otherwise carries on its business in Ontario.   (3) An extra-provincial corporation does not carry on its business in Ontario by reason only that, (a) it takes orders for or buys or sells goods, wares and merchandise; or (b) offers or sells services of any type, by use of travellers or through advertising or correspondence.“

Alberta

The Business Corporations Act (Alberta) governs foreign companies carrying on business in Alberta.  Sections 277(1) and (2) describe carrying on business in Alberta as follows: “For purposes of this Part, an extra-provincial corporation carries on business in Alberta if (1) its name, or any name under which it carries on business, is listed in a telephone directory for any part of Alberta, (b) its name, or any name under which it carries on business, appears or is announced in any advertisement in which an address in Alberta is given for the extra-provincial corporation, (c) it has a resident agent or representative or a warehouse, office or place of business in Alberta, (d) it solicits business in Alberta, (e) it is the owner of any estate or interest in land in Alberta, (f) it is licensed or registered or required to be licensed or registered under any Act of Alberta entitling it to do business, (g) it is, in respect of a commercial vehicle as defined in the Traffic Safety Act, the holder of a certificate of registration under the Traffic Safety Act, unless it neither picks up nor delivers goods or passengers in Alberta, (h) it is the holder of a certificate as defined in section 130 of the Traffic Safety Act, unless it neither picks up nor delivers goods or passengers in Alberta, or (i) it otherwise carries on business in Alberta.  (2) The Registrar may exempt an extra-provincial corporation from the payment of fees under this Part if the Registrar is satisfied that it does not carry on business for the purpose of gain.“

Manitoba

The Corporations Act (Manitoba) governs foreign companies carrying on business in Manitoba.  Section 187 of the statute indicates that a business is deemed to be carrying on its business or undertaking in Manitoba if (a) it has a resident agent or representative, a warehouse, an office or a place of business in Manitoba; (b) the name of the company or the name under which the company carries on business, together with the address of the company, is listed in a Manitoba telephone directory, (c) the name of the company or the name under which the company carries on business, together with the address in Manitoba of the company, is included in an advertisement promoting the business in Manitoba; (d) the company is the owner of registered real estate in Manitoba, or it otherwise carries on business in Manitoba.