Canada

Canada is a mature economy with a strong business reputation.

For international businesses, it offers a number of important planning opportunities.

The jurisdiction enjoys a wide network of tax treaties with countries such as the UK, Japan, Germany, Italy, New Zealand and the USA.

The use of a locally-registered company in conjunction with an overseas principal can enhance international trading or asset holding activities.

Pearse Trust has a track record of advising on the formation and management of such structures.

Canada Key Facts

Formation:
3-5 working days

Shelf Companies:
Available

Directors:

  • Minimum number of directors: 1
  • No restriction on residence or nationality
  • Corporate directors not permitted

Secretary:

  • Not applicable

Shareholders:

  • Minimum number of shareholders: 1
  • No restriction on residence or nationality
  • Corporate shareholders permitted

Public Filing:

  • Annual reports must be filed every year
  • Financial statements and tax returns must be filed every year

Corporation Tax rates:
28.5%

Double Tax Treaties:
87

Canadian Tax 

Canadian companies are taxed on their worldwide income. However, it is possible to significantly reduce taxation exposure by creating and properly managing a structure that involves the use of a locally-registered company, in conjunction with an overseas principal.

Correctly structured, no tax exposure will arise where income is from non-Canadian sources and no activities in connection with the trading or overseas asset(s) being held have taken place in Canada.

Other notable features of the local taxation system are:

  • Corporation tax rate of 28.5%
  • An extensive network of double taxation treaties

Pearse Trust provides access to local taxation expertise to enable clients to plan their tax affairs and ensure compliance with company law.

Canadian Incoporations

Companies can be formed in Canada within three to five working days.

A minimum of one director and one shareholder is required to establish a company and there are no restrictions governing residency or nationality.

An annual report is required to be prepared and submitted to the Corporate Registry and accounts and tax returns must be prepared and submitted to the Canadian Revenue Agency on an annual basis.

Provided the shareholders do not request it, the annual accounts will not be required to be audited for private companies.

Pearse Trust offers a full incorporation and compliance advisory service in Canada.

Canadian Corporate Compliance

Under Canadian company law, an annual report must be filed within two months of the anniversary date of its incorporation.  The annual report presents a ‘snap-shot’ of the company’s statutory particulars as at the date of filing to include, office address and director details.

Canadian private companies are not required to have their annual accounts audited unless requested to do so by their shareholders. Annual accounts and tax returns are however required to be prepared and submitted to the Canadian Revenue Authority within six months of the year end.

The accounts and tax returns are not accessible to the public.

Pearse Trust has experience of advising overseas investors on meeting their compliance obligations in Canada.

Canadian Solutions

Pearse Trust advises clients on the creation of efficient trading and asset holding vehicles, which utilise Canadian registered companies and overseas principal companies.

Correctly established and managed, they can significantly reduce exposure to Canadian tax.

Canadian registered companies benefit from being:

  • Established onshore;
  • Within an OECD member country; and
  • From a legal system based primarily in common law.

Our Canadian services include:

  • Formation of new companies;
  • Formation of new partnerships;
  • Agency advisory services;
  • Legal advisory services; and
  • Taxation advisory services. 

Canada - Resources

Canada (British Columbia) - Limited Liability Partnerships - December 2014


Canada - Blog Posts