Company Formation and Consulting Services in Canada

Canada runs two parallel incorporation systems, and neither is universally better. Federal incorporation under the Canada Business Corporations Act (CBCA), handled by Corporations Canada, gives nationwide name protection: once your name clears federal review, no one else in Canada may register a confusingly similar corporate name. It also carries weight with banks and larger customers, and lets you move your registered office between provinces without re-incorporating. Provincial incorporation — under the Ontario, British Columbia or Alberta Business Corporations Act — protects the name only inside that province, but the paperwork is lighter and the ongoing filings fewer. The practical catch: federal incorporation is not a licence to operate everywhere. A CBCA corporation must still register extra-provincially in every province where it actually carries on business — leasing premises, employing staff, holding a licence — which means a second fee, a second registered address and, in some provinces, an attorney for service. A business trading only in Ontario therefore usually incorporates provincially; one selling nationwide incorporates federally. Federal online filing costs around CAD 200 as of 2025, and the main provincial fees are comparable.

Three provinces account for the overwhelming majority of foreign-founder incorporations: • Ontario — Canada's largest market, home to Toronto and the financial sector, and the natural base for anything sold into the Greater Toronto Area or across the US border. Filings run through the Ontario Business Registry, online since 2021. • British Columbia — the standard choice for technology companies, Asia-Pacific trade and non-residents. BC uses its own Name Request system rather than NUANS and requires a records office inside the province, usually maintained by a law firm. • Alberta — the lowest general corporate tax rate in the country and no provincial sales tax at all, which materially simplifies life for retailers and service businesses. Quebec is viable but adds French-language obligations under the Charter of the French Language, covering corporate names, contracts and commercial documentation. Do not choose on tax grounds alone. Provincial corporate tax follows where income is earned, allocated by payroll and gross revenue at each permanent establishment — not by where the certificate of incorporation was issued.

This single rule drives more incorporation decisions for foreign founders than any other, and it is widely misreported online. Federal (CBCA): at least 25% of directors must be resident Canadians; where there are fewer than four directors — the usual start-up case — at least one must be. This remains in force as of 2025. A resident Canadian is broadly a citizen or permanent resident ordinarily resident in Canada. Ontario: imposed the same 25% rule until it was repealed on 5 July 2021. Ontario corporations now have no residency requirement. British Columbia: never had one. A director need only be at least 18, not an undischarged bankrupt and not found incapable by a court. Alberta: removed its requirement in 2022. Saskatchewan, Manitoba and Newfoundland and Labrador still require resident Canadian directors. So if every director will live abroad, incorporate provincially in British Columbia, Alberta or Ontario rather than federally. The alternative is recruiting a nominee resident director — real legal exposure, since Canadian directors are personally liable for unremitted payroll deductions, GST/HST and unpaid wages.

Corporation (Inc., Ltd., Corp.): the default and, for almost every foreign investor, the correct answer. A separate legal person, liability limited to capital invested, and capable of being owned entirely by non-residents. One shareholder and one director suffice. Sole proprietorship: a registered business name attached to an individual. No liability shield, and income is taxed in the owner's hands — practically unusable without Canadian tax residence. General partnership: two or more persons carrying on business together, each fully liable for partnership debts; registered provincially rather than incorporated. Limited partnership (LP): the structure non-residents ask about most. At least one general partner with unlimited liability, usually a corporation, plus limited partners capped at their contribution. An LP is fiscally transparent — it files an information return but is not itself a taxpayer, and income flows through to the partners. That is why Canadian LPs appear in international structures for software, consulting and e-commerce businesses with no Canadian customers or premises. It is legitimate, but it is not a tax-free wrapper: business carried on in Canada is taxed in Canada, and each partner's home country applies its own rules.

1. Choose a name, or do not. You may reserve a distinctive name or accept a numbered company such as 2856104 Ontario Inc. — instant, free of search cost and entirely respectable; a trade name can follow later. 2. Name search. Federal, Ontario and Alberta filings require a NUANS report (Newly Upgraded Automated Name Search), valid for 90 days, listing similar corporate names and trademarks. British Columbia instead uses a Name Request reviewed by a registry examiner. A Canadian corporate name has three parts: a distinctive element, a descriptive element and a legal ending such as Inc., Ltd. or Corp. 3. Articles of incorporation. These set the authorised share structure, any transfer restrictions and the number of directors. Most small corporations authorise unlimited common shares without par value. 4. Registered office. A physical address in the province of incorporation where documents can be served — not a post office box. 5. Directors and shareholders. Directors appear on the public record; shareholders generally do not. A register of individuals with significant control must be kept, and federal corporations file that information with Corporations Canada. 6. Filing. Online submissions are usually approved within one business day.

Incorporation creates the company; the Canada Revenue Agency (CRA) makes it operational. Every Canadian business receives a nine-digit Business Number (BN), usually generated automatically within a day or two of registration. The BN alone does nothing. Activity runs through program accounts appended to it as a two-letter code plus a four-digit reference: • RC — corporate income tax. Opened automatically for every corporation; the annual T2 return is filed against it. • RT — GST/HST. Required once you register for sales tax. • RP — payroll deductions. Required before your first Canadian employee is paid; income tax, Canada Pension Plan and Employment Insurance are remitted through it. • RM — import/export. Required to clear goods through the Canada Border Services Agency. One company may therefore hold 123456789 RC0001, RT0001 and RP0001 at the same time, and accounts are free to open. Non-resident directors frequently hit an identity-verification wall when telephoning the CRA, whose authentication questions assume a Canadian filing history. Appointing an authorised representative in advance saves considerable frustration.

Canada's federal Goods and Services Tax (GST) is 5%. In the participating provinces it is blended with the provincial component into a single Harmonised Sales Tax (HST) — 13% in Ontario and 14–15% in the Atlantic participating provinces as of 2025 — collected and administered by the CRA. Registration becomes mandatory once worldwide taxable supplies exceed CAD 30,000 across four consecutive calendar quarters, the small supplier threshold. Below it, registration is voluntary — and voluntary registration is usually the right call, because a registrant recovers the tax paid on its own purchases as input tax credits, while an unregistered business absorbs it as pure cost. If you import inventory, buy equipment or pay Canadian professional fees, register from day one. Non-resident vendors of digital products and platform operators have had a simplified regime since July 2021. Provincial sales taxes are a separate registration outside the HST provinces: • British Columbia — PST at 7% • Saskatchewan — PST at 6% • Manitoba — RST at 7% • Quebec — QST at 9.975%, administered by Revenu Quebec • Alberta and the three territories — no provincial sales tax

The federal general corporate rate is 15%: a 38% basic rate less the 10% federal abatement and the 13% general rate reduction. Each province adds its own rate, so the combined burden varies materially by province — roughly 23% in Alberta to about 31% in Prince Edward Island, with Ontario and Quebec near 26.5% and British Columbia around 27% as of 2025. There is no single Canadian corporate tax rate. Now the point that catches nearly every foreign investor. The celebrated small business deduction, which cuts the federal rate to 9% on the first CAD 500,000 of active business income, is available only to a Canadian-Controlled Private Corporation (CCPC) — a private corporation resident in Canada that is not controlled, directly or indirectly, by non-residents or by public corporations. A company wholly owned by a foreign individual or foreign parent is therefore not a CCPC. It pays the full general rate on its first dollar of profit and forfeits the enhanced refundable SR&ED credit. Dividends paid to non-resident shareholders attract 25% withholding tax, commonly reduced to 5% or 15% under a tax treaty.

Banking is the hardest part. Under FINTRAC anti-money-laundering rules, Canadian banks must verify identity and beneficial ownership. In practice RBC, TD, Scotiabank, BMO and CIBC expect at least one signing officer to attend a branch in person with original identification, the certificate of incorporation, the articles and the director register. Allow several weeks and expect refusals from branches unused to non-resident files; a commercial banking centre is far more productive than a retail branch. Annual compliance is light but unforgiving: 1. An annual return to Corporations Canada or the provincial registry — an existence filing, not a tax return. Persistent failure leads to dissolution. 2. A T2 corporate income tax return within six months of fiscal year-end, even when dormant. Tax owing is due two months after year-end. 3. GST/HST and payroll returns on their assigned cycles. 4. Minute book, share register and significant-control register kept current. Incorporating confers no immigration status. A Canadian corporation may be owned and directed from abroad indefinitely, but working in Canada for it requires a work permit — the Start-up Visa Program, intra-company transfers and provincial entrepreneur streams each have entirely separate criteria.