Canada Company Formation FAQs

The use of nominee directors is common in Canada. Nominee shareholders are also permitted in its corporate legislation, but your entity will be subject to filing a universal beneficial ownership disclosure. 

Canada has an Entrepreneur Programme that offers permanent residency to qualified entrepreneurs and their immediate families, defined as spouses and children under the age of 22 for every province except Quebec. You must meet two of the four stipulated conditions to become a Qualified Entrepreneur.  If you are interested in relocating to Quebec, you must apply for the Quebec Immigrant Investor Programme that allows high net-worth individuals to gain permanent residency from a passive investment. 

Canada has residency requirements for its directors. 25% of your board must consist of resident Canadians and at least one your company directors must be a resident of Canada for federal incorporation. Company formation in Canada requires you to have a local address. The following provinces do not have a resident director requirement: Quebec, Nova Scotia, New Brunswick and Yukon. If you choose to incorporate in a province as opposed to federally, you must adhere to the resident director requirements. 

The Canada Revenue Authority offers tax benefits that include the Small Business Deduction (SBD) if you are a small-to-medium-sized business (SMB). The corporate tax rate in Canada is normally lower than the individual tax rate. There are other income tax deductions and tax credits Canadian companies can access to reduce their overall corporate tax burden.

Offshore banking is legal as long as you disclose all of the funds inside the account to the Canadian Revenue Authority.  Canada takes tax evasion seriously and you will have to declare all offshore assets of more than $CA 100,000. There are five major banks in Canada where you can open an offshore account but only two let you open accounts without travelling to Canada. 

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