Why Register a Company in Canada

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Canada is one of the most economically stable countries in the world. It is not surprising because the business climate is highly favorable in the country. In accordance with the Canadian legislation, any foreigner can start a company in the country. He or she has to come up with an original business idea and register the company with the authorities. Company ownership and business activities can make the foreigner eligible for legal residence in Canada. After only three years, he or she can become a Canadian citizen.

Reasons to invest in Canadian economy

This highly stable economy of Canada attracts entrepreneurs from all around the globe. Canada is especially popular with residents of Asian countries but people from other companies immigrate there and launch business ventures too. The main advantages that Canada offers to business people include the following ones:

A favorable taxation system. The corporate income tax rate is 15% in Canada, which is low by global standards.
A stable economy. Canada ranks 9^th for its macroeconomic indicators. The contribution that Canada makes to the world economy amounts to almost 1.5%.

A large number of qualified specialists. There are several world-class universities in Canada and finding qualified personnel is easy there.
Growth of prices in the real estate market. Over recent years, the prices for real property in Canada have been growing by 10% to 15% per year. This is good news for a foreign investor because a) it is an indication of economic growth, and b) purchasing some real estate in Canada is a good investment option.

Threats and difficulties that entrepreneurs face in Canada

Besides important advantages, business people find some disadvantages in Canada. The main of them include the following ones:

Delays in obtaining some licenses. For instance, the procedure of obtaining a construction permit consists of 12 steps, and the process can take up to 250 days.
Cybercrime. According to the official data, the number of cybercrimes has increased by more than 160% in Canada since 2015. This fact is certainly of concern to those companies that do business via the Internet.
Different provincial regulations. Each province in Canada sets its own rules and puts forward its own requirements, which may complicate international trade operations, for example.

How to start a business in Canada

A foreign national has to take several steps to start a company in Canada:

1. Develop a detailed business plan based on a central business idea. When applying for company registration, a foreign candidate has to present a business plan for 5 years ahead.

2. Choose the company ownership form. Foreign nationals can establish Sole proprietorships, Partnerships or Corporations in Canada.

3. Choose the company name. When registering companies in Canada, a foreign entrepreneur has to read the local business register attentively. They have to choose a name for their company that would be different from the names of all existing companies in Canada.

4. Register the company. A foreign national has to register the company with the provincial authorities if they intend to carry out business operations only on the territory of a particular Canadian province. If they want to do business in the entire Canada, they have to register the company with the Federal authorities.

Please visit the International Wealth web portal to find out about detailed procedures of registering companies in Canada.

Business idea

According to the Canadian statistical service, 99.8% of all companies in the country are small- or medium-size companies with less than 500 employees. They turn out nearly 38.4% of the country’s GDP. The following spheres of economy are most popular with immigrants in Canada:

Agriculture;
Restaurant business;
Wholesale and retail;
Construction;
Professional and technical services.

A business plan is a key factor determining the success of the prospective company. This document has to be submitted to the financial and administrative agencies that facilitate launching companies in Canada. A well-thought-out business plan has to contain the following elements:

Prospective company name;
Results of market research;
A marketing plan;
Company form of ownership;
An HR plan;
A needs analysis;
Key financial data.

Company insurance

Insuring a business company is not obligatory in Canada but it can protect the company from acts of god and unlawful activities of third parties. Company owners in Canada have a wide choice of insurance policies that cover different areas of business operations.

The amount of the insurance premium depends on the following factors:

The size and location of the company;
The company’s term of existence;
Annual turnover and gross income;
The number of company employees;
Claim history.

A business insurance policy covers only (some areas of) business operations that the company carries out. It does not cover the company owners nor employees.

Licenses and permits

The owner of a Canadian company may have to apply for a license or a permit depending on the area of their business operations and types of business activities. Licenses and permits are granted by the municipal or the provincial authorities and they can be applied for online.

Small- and medium-size company owners usually apply for the following licenses in Canada:

General business license — acquired in the municipality or in the province;
DBA license — mandatory for those sole proprietors who do business under a name that is different from the legal company name;
Sales tax permit — mandatory for companies engaged in online sales;
Zoning permit — may be required in some Canadian cities;
Home occupation permit — required if business is done from home;
Health permit — mandatory for companies working with food;
Environmental permit — mandatory for companies using any chemicals or pollutants;
Police and fire permits — mandatory for almost all types of companies in Canada;
A signage permit — required if the company has its sign in the street.

State support

The Canadian authorities finance small- and medium-size companies as well as corporations, not-for-profit organizations, and research institutions. The state support programs can be divided into 4 categories in Canada:

Grants and loans for business expansion;
Contributions to the company charter capital;
Grants to find qualified personnel to staff the company;
R&D grants.

Extensive state support is probably one of the main reasons why the Canadian economy has been steadily growing for years and years. The Government of the country does its best to boost the entrepreneurial spirit of its citizens and legal residents. The fact that business is well-regulated and everybody follows the rules in Canada makes carrying out business operations in the country a rather simple matter.

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