Director residency rules decide where you incorporate
The federal Canada Business Corporations Act requires at least 25% of directors to be resident Canadians (or at least one if there are fewer than four). Several provinces have removed residency requirements entirely, which makes them the usual choice for foreign-owned companies: Ontario, British Columbia, Alberta, Quebec, New Brunswick, Nova Scotia, Prince Edward Island and the three territories have no requirement. A few provinces, including Saskatchewan, Manitoba and Newfoundland and Labrador, still require a proportion of resident Canadian directors.
A provincial corporation can still do business across Canada: it registers extra-provincially in each other province where it carries on business.
Subsidiary or branch?
A foreign company has two routes. It can incorporate a Canadian subsidiary (a separate Canadian corporation that it owns), or it can register the existing foreign company extra-provincially as a branch in the province where it will operate. A subsidiary is the more common choice: it limits liability to the Canadian entity, is simpler for banks and customers, and qualifies for Canadian tax treatment as a Canadian corporation. A branch keeps everything in the parent, which some groups prefer for a short-term project.
Either way, the Canadian entity needs a registered office address in the province, a Canadian agent for service in some provinces, and its own CRA Business Number.
Bank accounts for non-residents
This is the hard step. Canadian banks must verify the identity of directors and significant owners and many require at least one director to appear in person; some open accounts for non-resident-owned companies through specific business or international banking teams, by video, or during a short visit. Policies differ by bank and change, so we confirm the requirements with the bank before you travel or apply, and assemble the document kit (articles, registration, Business Number, ownership chart, identification, proof of address) in advance.
Tax basics for a non-resident-owned business
- A Canadian subsidiary files a T2 corporate return and pays Canadian corporate tax on its income; dividends paid to a non-resident parent are subject to withholding tax, reduced by tax treaties.
- A branch of a foreign corporation is taxed on its Canadian-source business income and may pay branch tax; it also files a T2.
- GST/HST registration applies once taxable sales in Canada pass $30,000; non-resident businesses may need to register earlier or provide security, and digital services have their own rules.
- Payroll accounts and provincial workers’ compensation apply as soon as there are Canadian employees.
- A cross-border tax advisor should confirm the structure; we set up the registrations, accounts and bookkeeping and work with them.
Owning a company does not give you the right to work in it
A non-resident can own and direct a Canadian company from abroad. Coming to Canada to run it day to day requires the right status: an intra-company transfer work permit for a parent company opening a branch or subsidiary, the C11 entrepreneur work permit, an entrepreneur stream of a provincial nominee program, or the Start-up Visa for innovative businesses with a designated organization’s support. Each requires a business plan, which we prepare with your immigration representative.
What we do for non-resident clients
- Recommend the province and structure and file the incorporation or extra-provincial registration remotely
- Arrange the registered office address requirement
- Obtain the CRA Business Number and program accounts
- Confirm bank requirements, assemble the document kit and coordinate the account opening
- Set up bookkeeping, sales tax and payroll, and keep the annual returns on calendar
- Write the business plan for an ICT, C11, PNP or Start-up Visa application