Incorporation in Canada for Non Residents

Nov 13, 2023

Incorporation in Canada for Non ResidentsIncorporation in Canada for Non Residents


Non-Resident Incorporators in Canada – All you need to know.

Can I incorporate as a non-resident?

Yes, there are no limitations in Canada on foreign incorporators. You must only pay attention to the 25% of directors rule. Ontario, British Columbia and Alberta do not need to appoint 25% of directors as Canadian citizens or Permanent Residents and therefore are the best options for incorporating by non-residents.

Watch our video about Federal vs. Provincial Corporation here:    • Federal vs  Provincial Incorporation …  

Watch our video about Ontario Corporations here:    • Ontario Incorporation – is this the B…  

Can I incorporate as a work/student permit holder?

Yes, there are no limitations on incorporating as a work/student permit holder, but you must be careful with everything related to the “operating” of your business as this might be contrary to the terms of your work permit. Make sure that your work permit condition allow you to work for any employer.

As a non-resident, can I register a sole proprietorship?

In my opinion, the answer is NO. Sole proprietorship is based on a personal income and Social Insurance Number, so it is not available for non-residents who are not in Canada.

I my opinion, it will also be contrary to the terms of a work permit (or student visa) since the work permit allows its holder to be “employed”, while sole proprietorship in its essence is not “employment” but rather operating your own business. Anyone who is not a Canadian citizen or PR must consult with an immigration consultant to decide before starting a sole proprietorship.

What would be corporate tax rate?

Canadian corporate tax system is based on provincial tax rates, so some differences could be between the provinces. The basic corporate tax rate in Canada is approximately 26%. There is the tax deduction rule called Canadian Controlled Private Corporation (CCPC), which reduces the tax rate of a Canadian owned corporation from 26% to 12% (with some minor deviations). If 51% of the shares of a corporation are owned by a Canadian tax resident, the corporate tax rate will be reduced.

Do I need a local address in Canada?

Yes, it must be located in the province where you want to register. The address could be either commercial or residential property. We at CBES provide registered address services for our clients in multiple provinces.

Do I need to come to Canada to incorporate?

No, the incorporation could be done online, we only need your ID’s and some personal information. All corporate documents issued by the Registrars in Canada are in a digital form, there are no hard-copies of the documents. We at CBES can provide incorporation services online without the need for you to come to Canada.

Can I use a Corporation for Immigration purposes?

Yes, there are multiple business related immigration programs. We at CBES do not offer immigration services, but we work closely with many immigration companies and provide them with incorporation and corporate setup services in support of their immigration applications.

How do I take money out of a Corporation?

This should be discussed with a tax accountant to make sure you make the right decision. You could be paid dividends, management fees, or can bill your Canadian company for the services that your foreign business renders to it (administration, management, accounting and more).

Speak with us before you make the decision and we will provide the best strategy for taking the funds out of your corporation in Canada.

Useful Links:

Our video about Sole Proprietorship:    • Sole Proprietor in Canada. What you s…  

Our video about corporate tax system in Canada:    • Taxes in Canada. Personal Tax and Bus…  

You can find Contracts and Documents for Business Owners in Canada here

Launch Your Business in Canada

Contact us right now and we will help You!

Capital Cost Allowance (CCA)

Capital cost allowance (CCA) is one of several methods to lower your business's taxable income in Canada. The Canada Revenue Agency (CRA) describes it as "a tax deduction that Canadian tax laws allow a business to claim for the loss in value of capital assets due to...

Motor Vehicle Expense Claims on Income Tax in Canada

Did you use a vehicle for your business last tax year? This article outlines the motor vehicle expenses you can claim on your income tax in Canada and details the necessary documentation to support your expense claims. The examples provided here illustrate how to...

Canada Pension Plan (CPP)

The CPP, also known as the Canada Pension Plan, is a national program that aims to assist Canadians in securing income for their retirement or in the event of disability. It was instituted by Lester B. Pearson's Liberal government in 1965, except in Quebec where a...

Independent Contractor vs Employee in Canada

Understanding whether you are classified as an independent contractor or an employee is crucial for your Canadian income tax, especially if you believe you are a contractor but the Canada Revenue Agency (CRA) later decides otherwise after you have filed multiple tax...

Red Flags That Will Get Your Small Business a CRA Audit

Receiving a letter from the Canada Revenue Agency (CRA) announcing an audit is something every business or individual fears. Tax experts say about 35,000 such letters were issued in 2023. Business tax returns undergo intense scrutiny, and although there is no...

How to Manage Business Expense Records in Canada

Imagine if you were to create a comprehensive list of all the responsibilities necessary for running your business, and then arranged them according to your personal preference. Where would managing business expense records fall within that hierarchy? Would it be...