Canada Company Formation

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Opening a company in Canada

Why open a company in Canada? What are the advantages in the country of Canada?
Canada, one of the largest countries in the world, is an important target market for many entrepreneurs.

The local currency is the Canadian dollar (CAD), and the country is one of the most westernized.

Canada is a convenient gateway to the Canadian and United States markets, with relatively cheap maintenance costs and a local market that speaks English as a mother tongue, but also French.

Canada's strong consumer market, with 40.1 million people, is one of the most important in the world. The country is on the North American continent, and it is a very important strategic location for import/export operations to North America.

Canada's main trading partners are all the most important countries in the world, including the USA, Germany, Russia, France, Hungary, Ukraine, Spain and China.

Canada is a perfect place for investment and business expansion. The Canadian government is eager to boost the economy.

Investors see Canada as one of the most attractive investment destinations in the world.

The process of opening a company in Canada
Opening a company in Canada begins with checking that the proposed name of the company exists.
The purpose of this search is to make sure that no one else has a registered business or trademark with a name similar to the one you have chosen. A company's name must end with one of the following suffixes:

  • Limited or Limitee;
  • Incorporated or Incorporated or
  • Corporation
  • Ltd. Or Ltee.
  • Inc.
  • Corp.

In Canada there is something special about the name: the name of the company can be its own VAT number, that is, the name of the company can only be its registration number.

After that, various documents must be prepared, including what is called a "Memorandum of Incorporation", sign them, and submit them to the Registrar of Companies. The entire process is carried out remotely from anywhere  the customer is.

Canada, like the USA, is a federation of internal countries, so the client is required to decide in which country the company will open: Ontario (where the city of Toronto), Quebec (where the city of Quebec itself), British Columbia, etc.

The company is then opened and the company's registration documents are issued (they are the Canadian certificate of incorporation).

In Canada there is no need for a local director or local shareholder. In Canada you also do not need any Canadian or American citizenship to open a company. You can open a Canadian company even if you are a foreign citizen. This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.

Opening a bank account in Canada - current account for the company
More or less starting in 2018, those who want to open a bank account are required to come to the country. However, there are a number of banks that allow certain customers to open the account remotely, and it is certainly possible to do the entire opening process from abroad.

Equity Capital
In order to open the company in Canada, no deposit of equity is required.

After opening the company, you can use the bank account that was opened for the purpose of depositing the equity capital. In other words, the equity account becomes an active current account for all intents and purposes.

Registration with the Tax Authority
After opening the company, it is not necessarily required to register with the Canadian Tax Authority. However, if it becomes necessary, it will be possible to perform the aforementioned registration for the new company.

Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.
However, all costs in Canada are low due to the relatively cheap cost of living.

Tax in Canada
Corporate tax in Canada is at a rate of 38%, but there is a tax refund of 10% and another 13% general tax reduction, which makes the effective corporate tax to be in the area of ​​only 15%!
For sales to the local Canadian market, the VAT is a measly 5% only.

Questions and answers
Question: Is it necessary to physically fly to Canada to open a company in Canada?
Answer: The entire process is carried out remotely and at no stage is it necessary to physically come to Canada. There is no need to fly to Canada to open the company, nor the company's bank account. The entire process of opening the company and in most cases also the company's bank account, are carried out remotely without setting foot on Canadian soil.

Question: Who provides the local address for the company in New Canada?
Answer: We will provide the local address.

Question: How can I find a good accountant to handle the company in our new Canada?
Answer: We will connect you with a local accountant.

Question: If I want to come to Canada to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you don't just walk around the city in order to find a branch that will accept you and open a bank account for your new company in Canada.

Question: What type of company in Canada should I open?
Answer: In Canada there are two types of companies:
The first type is a limited liability company. This is the LLC.
LLCs are considered more flexible in terms of organizational structure and easier to operate on a daily basis. They are suitable for investments of different scopes.

The second type is "joint stock company", that's how I imagine it can be translated into Hebrew. In English this type is called corporation and in Canada: INC.

INC companies are usually intended for large-scale investments. Startup companies that may want to make an IPO in the future, or bring in investors in return for selling shares, etc., are great for raising capital,

Foreign investors often choose LLC companies, i.e. companies of the first type, unless their business requires that the company be of the Inc type.

Question: Do you need a Canadian passport to open a company in Canada?
Answer: There is no need for a Canadian passport. We can open a company in Canada for any foreign citizen as long as he has a valid passport.

Question: How long does it take to open a company in Canada?
Answer: The process of opening the company, including signing the power of attorney and sending it, should take about 3 weeks. After that, the process of opening a bank account takes between 3-4 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these are times that depend on third parties, so this is only an estimate.

Question: How much does it cost to open a company in Canada?
Answer: Click here and get in touch and get a current quote without obligation!