Starting a business in Canada


I came to Canada 19 years ago from Italy. I was attracted to the country because of the multicultural society that it represents. Still today, a new census has revealed Canada’s population of 33.5 million is growing faster than that of any other G8 nation — fuelled primarily by immigration — while the booming West continues to reshape the country’s demographic landscape. In fact, according to the latest census, 47 percent of the population living in Vancouver belongs to visible minority groups; this expression is used to define a person who is not of European descent.
 
Canada flag - Starting a business in CanadaWhen I arrived, I started an Italian restaurant on Vancouver Island. The Provincial government helped me a lot to make sure I could immigrate to Canada. The process was not easy but it was worth the effort. When I came I didn’t ask for any professional help and I completed the whole process alone. Of course, if you dislike dealing with paper, questionnaires, and bureaucratic wording, I recommend you ask for help.
 
While all the Canadian provinces are actively looking to attract skilled workers from different categories, this article focuses on providing a panorama for entrepreneurs (Business Immigration) who want to immigrate to Canada. Because I went through this exact process, I hope I can give you some good insights.
 
Through the Provincial Nominee Program (PNP), Canada’s provinces or territories can sponsor immigrants for permanent residency who will be the most beneficial to the local economy. Every year the national government sets and changes the number of visas available to a given province after consulting with local authorities on needs.
 
As their website states, the objectives of the BC PNP Business Immigration categories are to encourage economic development, promote job creation and maintain existing jobs in BC.
 

BC Provincial Nominee Program


The process to apply for the BC Provincial Nominee Program is available on their website . As said before, you do not need any representative and you can apply on your own.

In Canada only the following people may charge a fee or receive any other type of consideration, to represent or advise you in connection with a Canadian immigration proceeding or application:
  • Lawyers and paralegals who are members in good standing of a Canadian provincial or territorial law society
  • Notaries who are members in good standing of the Chambre des notaires du Québec
  • Immigration consultants who are members in good standing of the Immigration Consultants of Canada Regulatory Council
 

The business plan


When you are ready to start a business in Canada, the first thing you need to do is to develop your business plan. The business plan is the road map you need to follow to reach your business objectives. The document is required by the Provincial Nominee Program.  The business plan includes a review of your strengths and weaknesses, industry analysis, marketing research, financial analysis and the identification of your business objectives. Your objectives must be Specific, Measurable, Achievable, Realistic and Time scaled (SMART).
 

Incorporate your company


To start doing business in Canada you need to incorporate your company. Canada has a good website for this. You need a credit card and some business background to complete the process. Of course not everyone enjoys dealing with legal terms and if you do not feel comfortable then ask for professional help. The government has offices located across the country that can assist you to start your own small business. They even offer very inexpensive seminars where you can learn business, network with other people and keep yourself updated with market trends. In Vancouver you can go to Small Business BC in downtown Vancouver.
 
As per the process, first of all you need to choose the name of your company. To retain your name across Canada you need to incorporate federally with Corporation Canada. You can apply for the name on their web site, and after approval, you can proceed to the formal incorporation. If you will do business in only one of the provinces, then you do not need to incorporate federally but only with the province you will conduct business in. In this case the name search is done with the provincial jurisdiction only. Remember that if you incorporate federally you must incorporate also with the province you will conduct business in. In British Columbia you will incorporate with BC Registry. You need to decide the classes and number of shares, their value, the directors, and the location where you will keep your corporate documents.
 

Corporate taxes in Canada


I am sure not many people like to talk about taxes, and I am one of them. Well, somebody said that only two things are guaranteed in life, and they are death and taxes, so we cannot avoid talking about taxes, unfortunately. It is not an easy subject and even if I put sugar on it, it is still a bitter subject. Here in Canada accountants can help you a lot. The Chartered Accountant (CA) is at the top of the accounting qualifications. We also have Certified General Accountants (CGA), Certified Management Accountant (CMA) and bookkeepers if your file is not that complicated, and they are cheaper than a CA.
 
After you complete your incorporation process Canada Revenue Agency will send you a form to complete asking you more questions regarding the nature of your business and they will assign you a business number. You can then apply for a GST-HST number. You also have to decide the date of your financial year end. The date doesn’t have to be 31 December if you prefer a different date (i.e. 31 July). You have to file for corporate taxes within six months after your year-end date.
 
In Canada we have federal and provincial corporate taxes. For Canadian-controlled private corporations claiming the small business deduction, the net tax rate is 11 percent. For other corporations, as per January 2012, the net tax rate is 15 percent.
 

Provincial or territorial tax rates in Canada

Generally, provinces and territories have two rates of income tax - a lower rate and a higher rate.

Lower rate
The lower rate applies to the income eligible for the federal small business deduction. One component of the small business deduction is the business limit. Some provinces or territories choose to use the federal business limit. Others establish their own business limit.
 
Higher rate
The higher rate applies to all other income.
 
The following table shows the income tax rates for provinces and territories (except Quebec and Alberta, which do not have corporation tax collection agreements with the CRA).
 
These rates are in effect on 1 January 2012, and may change during 2012.

Province or territory Lower rate Higher rate
Newfoundland and Labrador
4% 14%
Nova Scotia 4% 16%
Prince Edward Island 1% 16%
New Brunswick 4.5% 10%
Ontario 4.5% 11.5%
Manitoba nil 12%
Saskatchewan 2% 12%
British Columbia 2.5% 10%
Yukon 4% 15%
Northwest Territories 4% 11.5%
Nunavut 4% 12%


More on business in Canada


Another bureaucratic requirement to start a business in Canada is to apply for the Municipal Business License with the municipality where your business is located. In Vancouver you can visit the City of Vancouver website to apply and pay the fees. Some businesses might require a special license.
 
To open your corporate bank account you can choose among all the Canadian banks and credit unions. You need to provide your documents of incorporations, including the articles of incorporation.
 

Last suggestions


You now have all the major information to start your business. What you want to do and where you want to do it is up to you. Canada is a wonderful country to live and raise your family!

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MicheleVincenti's picture
Taranto, Italy
Michele lives and works in Vancouver. He is a university professor, and President of Alvana Business Consulting Inc. He is a...
MicheleVincenti

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