The number of people moving to Canada has steadily increased over the years. An average of 250,000 new immigrants have poured into the country each year over the past decade. Canadian officials seek skilled migrants to strengthen the nation’s workforce. Here’s what to know about moving a business to Canada.
Considerations Before Relocating to Canada
One of the top considerations before moving to Canada is the cost of living, which is generally higher than in the United States. Numbeo’s Cost of Living Index lists the U.S. at number 21 and Canada at 31 for 2020. High rents in Toronto and Vancouver make it cost prohibitive for some companies to relocate to the “Great White North.”
Another issue to think about is climate. Will you and your employees be able to adapt to cold weather most of the year? With colder temperatures come higher energy bills unless your home is well weatherized. You’ll still need to invest in warmer clothes and items like shovels to clear snow from walkways.
Canada offers high quality healthcare and education, largely paid for by taxpayers. The nation uses a graduated tax system, which means the more income an individual makes, the more they pay in taxes. Canada was rated as having the world’s third best education system by U.S. News & World Report in 2019. The main reasons people enjoy Canada is they prefer wilderness and dense population. The nation also has a low corporate tax rate at 15 percent.
Canadian Requirements for Business
Just like in the United States in which each state has its own regulations about operating a business, Canadian provinces each have their set of distinct requirements. The province of British Columbia has the most flexibility for allowing businesses run by non-residents, as the path is much easier to start a sole proprietorship, partnership or corporation. Here are key requirements for launching a business in British Columbia:
- The business must have a physical address and not just a P.O. Box.
- The owner must be granted a work permit from Citizenship and Immigration Canada.
- The owner must submit an Investment Canada application.
Expanding Business Into Canada
It’s possible to expand an existing business into Canada without moving there. The legal process, however, can take up to 18 months. But not all businesses are eligible to operate in Canada. Those that comply with Canadian regulations can enter the market through the Intra-Company Transferee (ICT) Program. Here are the main requirements to gain program eligibility:
- Your company must already be active selling products or services.
- The firm needs to be at least one year old.
- At least one employee must work for the company.
- The organization should have sufficient funds to operate, such as $100,000.
- The company must be officially registered in its native country.
- Evidence of company tax records should be available for review.
Making the Move to Canada
The next step to set the transition in motion is to choose a business structure and a province where your company fits. If your company is a corporation, most provinces require at least one board member be from Canada. To work in Canada you’ll need to apply for a work permit, which is usually renewed every year.
After the first year of operating in Canada, you will need to show federal immigration authorities important documentation to continue operating. You need to demonstrate the business actively sells goods or services in Canada, but isn’t required to be profitable. You must also have a physical office within the nation’s borders and not just be an online entity. You should also have at least one Canadian worker on your staff.
Conclusion
Relocating your business to Canada is fairly straight-forward if you follow the formalities. It’s mainly a matter of showing your commitment to run an active legitimate business that’s open to hiring Canadians.
