A Foreign business, incorporated in any country outside of Canada, may register to carry on business in Ontario provided it follows the requirements of the Extra-Provincial Corporations Act (Ontario).
Toronto, is the capital city of Ontario, Canada and it is the largest city in Canada. It is, therefore, a popular place for foreign companies to set up business.
Registration Requirements for Foreign Companies pursuant to the Ontario Extra-Provincial Registration Act
Below are the things to consider before registering a foreign business in Canada along with the requirements under the Ontario Extra-Provincial Registration Act which must be considered before a foreign company starts the process to register to conduct business in Canada.
What Constitutes a Foreign Business Operating in Ontario
The Extra-Provincial Corporations Act (Ontario) governs a foreign business carrying on and operating in Ontario.
The Act defines carrying on business in Ontario if a company:
- has a resident agent, representative, warehouse, office or place where it carries on its business in Ontario
- holds an interest, otherwise than by way of security, in real property situate in Ontario, or
- otherwise carries on its business in Ontario.
What Does Not Constitute Carrying on Business in Ontario
The Extra-Provincial Corporations Act indicates that it does not constitute carrying on business in Ontario if a company
- takes orders for or buys or sells goods, wares and merchandise, or
- offers or sells services of any type, by use of travellers or through advertising or correspondence.
What Documents are Required in Order to Register in Ontario
Ontario NUANS– A foreign business must have its name pre-cleared for use in Ontario by providing the Ontario government with an Ontario NUANS. An Ontario NUANS report provides the government with confirmation that your name is available. A registered NUANS search house specialist must pre-clear your name before it obtains your NUANS report.
If the name is not available for use the company may conduct business in Ontario under a business name.
Appointment of Agent for Service – The foreign company must have a representative, who lives in Ontario, who will act as agent for service and receive correspondence on behalf of the company. This is sometimes not possible for a foreign company, however, there are individuals and/or companies that will act as agent for service for an annual fee.
Certificate of Status – The foreign company is going to have to provide a Certificate of Status from its home jurisdiction. This certificate will need to indicate:
- The name of the corporation
- Date of incorporation/amalgamation
- Jurisidiction in which the company was incorporated
- Confirm the company is valid and subsisting
These certificates are requested from the government pursuant to which the company was incorporated. Not all jurisdictions in every country will provide a certificate of status that show all of this information. In a case where it is not possible to obtain a complete certificate of status, a legal opinion from a solicitor in the company’s home jurisdiction will be accepted.
Licence Issued to a Foreign Company Upon Registration
Once registered the foreign company is provided with an Ontario Extra-Provincial Licence.
Timing of Foreign Registration in Ontario
Once the application has been submitted it will take up to 10 days for the license to be processed.
What Legal Requirements Must be Considered Subsequent to Registration
Federal Tax Return filing requirement – The Canada Revenue Agency governs the collection of taxes in Canada. All companies registered in Canada, including foreign companies registered in Canada, must pay taxes. For to the more information about the requirements refer to: international and non-resident taxes.
Ontario Annual Return filing requirement – The Ontario Corporations Information Act provides all foreign companies registered in Ontario must file an annual return filing each year with the Ministry of Government Services.
Initial Return and Notice of Change filing – The Ontario Corporations Information Act also provides that subsequent to registration (within 60 days) the foreign corporation must file an Initial Return with the Ministry of Government Services. The service that registers your company should also file the Initial Return. Be sure to confirm this upon registration.
The Initial Return outlines the address information, chief officer located in Ontario and the agent for service and its address. If the information changes a Notice of Change is expected to be filed within 15 days.
Federal Business Number – Foreign companies which are registered in Ontario will be required to obtain a Federal Business Number. Further, there are certain accounts that may need to be opened under that Federal Business Number, i.e. (a) HST account, (b) Payroll account, or (c) Import/Export Account.
- HST Account – If the foreign company’s worldwide profits are $30,000 or more the company will be required to collect a 13% tax called Harmonized Sales Tax on all sales in Canada;
- Payroll Account – If the foreign company has employees in Canada it will be required to open a payroll account; and[margin_5t][margin_5t]
- Import/Export Account – If the foreign company intends to import/or export goods it will require an Import/Export Account.
For more information about the accounts refer to Federal Business Number.
Since some companies wish to conduct business in Canada but will not in the beginning have someone living in Canada, it is sometimes beneficial to have a remote phone service and mail pickup. These services are available for those seeking them.
If you require further information about foreign registration in Canada feel free to contact Resources for Canadian Business Owners.