Canada

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Canada

GENERAL INFORMATION ABOUT THE JURISDICTION

Canada is one of the richest countries in the world with high income per capita. Despite the fact that this country is a member of OECD, G8, NATO, WTO, Union Francophonie, OAS, APEC and UN, it without doubt included into top 10 trading countries in the world. You would be offered a very good tax planning conditions for your business and country’s reputation leaves no uncertainty in legality of your business.

After signing North American Free Trade Agreement (NAFTA) between Canada, Mexico and the United States of America creating a trilateral rules-based trade bloc in North America with aim of elimination any boundaries in trade and investments between these countries. This provides not only with good logistic network and with more than 451 millions of customers but also good time zones for trading on American quote-driven market.

Owning business in Canada can help you to obtain permanent resident status.

BENEFITS:

  • Canada is a stable jurisdiction with very good reputation.
  • No annual report required if business held outside of Canada.
  • No general shareholder meeting is mandatory in Ontario province.
  • Registering a company in Canada and doing business is cheaper than in the United States.

LEGISLATION

At the federal level, offshore activities are regulated by the Canada Business Corporations Act (CBCA).

TYPES OF COMPANIES:

The most popular legal forms for offshore operations are Limited partnership, Limited Liability Partnership  and Corporation.

Name of the company must include its organization form (variants on English and French possible as Canada has 2 official languages) – «Limited»/«Limitée», «Incorporated»/«Incorporée» for Limited partnership or Corporation (or abbreviations «Ltd. », «Ltée», «Inc. » or «Corp.» respectively).

Name of the company in British Columbia can be also a number but it needs to be additionally registered in special register. 

It is forbidden to use words that might be interpreted otherwise for instance (including French equivalent) “bank”, “trust”, “insurance”, “stock exchange market”, “university”, etc.

COMPANY REGISTRATION IN CANADA

Ontario Limited Partnership (LP):

  • Minimum authorized capital - not established, can be contributed by cash or property.
  • Founders - at least one partner, natural or legal person. There are no residency requirements for individuals. For legal entities partners, there is an obligation to obtain the required local license. There is a possibility to use the nominee service.
  • The Partnership must have a general partner (fully responsible and responsible for the debts and obligations of the Partnership) and a limited partner (is responsible for the amount of its contribution to the Partnership). If one person acts as the founder, he is appointed by both the general and limited partner.
  • Director (General Partner) - at least one, natural or legal person, is appointed from among the partners.
  • If partners operate outside the country - no reporting is submitted and no audit is carried out.
  • "Offshore" in Canada must have a registered office in the country.
  • From June 13, 2019, every company incorporated under the Canada Business Corporation Act (CBCA) must maintain a register of individuals with significant control (ISC). Information about the beneficiaries is available only to the competent authorities.

British Columbia Limited Partnership (LLP):

  • Minimum authorized capital - not established, can be contributed by cash or property.
  • Founders - at least one partner, natural or legal person without residency requirements. Nominee service is possible.
  • In LLP, all limited partners are liable only in the amount of their contribution.
  • If partners operate outside the country - there is no need in submitting the reports and no audit should be carried out.
  • The company must have a registered office in the country.
  • From June 13, 2019, each company registered in accordance with the Law on Business Corporations must maintain a register of individuals with significant control (ISC). Information about the beneficiaries is available only to the competent authorities.

British Columbia Corporation (CORP, INC, LTD):

  • Minimum authorized capital - not established, can be contributed by cash or property.
  • Shares - you need to issue at least one share with a minimum value of USD 1.
  • Shareholders - at least one natural or legal person, without residency requirements. There is a possibility to use the nominee service.
  • Director - at least one individual without residency requirements. The director and the shareholder can be the same person.
  • Confidential information - data on beneficiaries is available only to competent authorities. From June 13, 2019, each company registered in accordance with the Law on Business Corporations must maintain a register of individuals with significant control (ISC).
  • The company is required to complete and submit an annual tax return.
  • Meetings of shareholders are mandatory, but there are no requirements for the venue.
  • The corporation must have a registered office in the country.

TAXATION

For any corporation in British Columbia, the corporate tax ranges are from 2% to 12%, regardless of where it operates. A reduced rate of 2% may apply if the company has a turnover of not more than CAD $ 500 000 and the director is a resident in this province.

Sales tax - 5-13%.

Partnerships (LLP, LP) do not pay taxes, therefore all operations carried out outside the country are not subject to taxation. This is a very important factor for anyone looking to start a business in Canada.

EXCHANGE CONTROL

Absent.

DUAL TAXATION TREATIES

The country has signed over 100 double taxation treaties.

FEATURES

Canada is not a member state of the 1961 Hague Convention, so that, documents cannot be apostilled in this country. The entire package of documents during registration is notarized and this is included in the cost indicated on the website. As an alternative to apostilization, our company can offer certification of documents in the Department of Ministry of Foreign Affairs of Canada and, if necessary, certification in the embassy of the client's country in Canada.

Canada is the only country in the Big 20 where bank account holders are not disclosed. Also, information about companies that are registered in the territory is not covered (according to the Privacy Act and Personal Information Protection and Electronic Documents Act). But, do not forget that there are agreements on the mutual distribution of information in the jurisdiction.

We also draw your attention to the fact that Canada is not "offshore" in the classical sense of the word. This concept can often be found in materials due to the fact that all activities of firms carried out outside the country are not subject to taxation and reporting. But this is not an offshore zone, and Canada has never been blacklisted by other countries.

If you are planning to register an offshore company in Canada, please contact our lawyers for advice:

+38 (098) 737-88-88

We will help you buy offshore in Canada or anywhere else on the most favorable terms.