Canada

Company Formation in Canada

Canada — Corporations Canada (ISED) / Provincial Registries

Formation Time

1–2 weeks

Min. Capital

No minimum

Corporate Tax

15% federal + 8–16% provincial = ~26.5% combined

Foreign Ownership

100%

Overview

Canada is the world's 10th largest economy and consistently ranked among the top countries globally for quality of life, political stability, and ease of doing business. For company formation, Canada offers a choice between federal incorporation under the Canada Business Corporations Act (CBCA) — which allows the company to operate in all 13 provinces and territories under one registration — and provincial incorporation under individual provincial acts (e.g., Ontario Business Corporations Act, British Columbia Business Corporations Act), which is simpler but limits the company to its home province without extra-provincial registrations. The combined federal-provincial corporate tax rate averages approximately 26.5% (15% federal + ~11.5% provincial), though this varies significantly: Alberta has the lowest provincial rate at 8%, while Nova Scotia charges 14%. Canada's Scientific Research and Experimental Development (SR&ED) tax credit programme is one of the most generous R&D incentive programmes in the world, offering refundable credits of up to 35% for small Canadian-controlled private corporations (CCPCs). Canada is a member of USMCA (the US-Mexico-Canada trade agreement), providing preferential access to the US and Mexican markets. Toronto, Vancouver, and Montreal have emerged as world-class technology hubs, with growing ecosystems in AI (Montreal is a global AI research centre), fintech (Toronto), and gaming (Vancouver and Montreal). Canada's Start-Up Visa programme provides permanent residency to immigrant entrepreneurs accepted by designated incubators, venture capital funds, or angel investor groups — one of the most generous entrepreneur immigration programmes globally.

G7 economy — 10th largest globally

USMCA trade access

SR&ED: 35% R&D tax credit

Start-Up Visa — permanent residency

26.5% combined CIT (9% small business federal)

95+ double tax treaties

Why Choose Canada

G7 economy — 10th largest globally, AAA credit rating

USMCA trade access to the US (330M) and Mexico (130M) markets

SR&ED tax credits — up to 35% refundable R&D incentive for CCPCs

Start-Up Visa programme — permanent residency for accepted entrepreneurs

Choice of federal (CBCA) or provincial incorporation

95+ double taxation agreements — extensive treaty network

World-class tech hubs: Toronto (fintech), Montreal (AI), Vancouver (gaming)

Highly educated, multicultural workforce with strong English/French bilingual talent

Business Entity Types

Entity	Ownership	Directors	Capital	Tax	Best For
Federal Corporation	100% (25% of directors must be Canadian residents)	1 (minimum 25% must be resident Canadians; waived if fewer than 4 directors — at least 1 must be Canadian resident)	No minimum	15% federal + provincial rate (8–16%) = ~26.5% combined; SR&ED credits available	Businesses operating across multiple provinces, seeking national brand name protection
Ontario Corporation	100% (no Canadian director requirement for Ontario provincial corps)	1 (no Canadian residency requirement — unique to Ontario)	No minimum	15% federal + 11.5% Ontario = 26.5%	Businesses focused on Ontario/Toronto market; foreign owners who cannot provide a Canadian resident director
British Columbia Corporation	100% (no Canadian director requirement for BC provincial corps)	1 (no Canadian residency requirement — BC is among the few provinces without this rule)	No minimum	15% federal + 12% BC = 27%	Tech companies, gaming studios, Asia-Pacific trade — Vancouver gateway
Extra-Provincial Registration	Per home jurisdiction rules	Per home jurisdiction	None additional	Provincial tax applies in each province where the company operates	Companies expanding from one province to others

Step-by-Step Formation Process

NUANS Name Search

Same day

Conduct a NUANS (Newly Upgraded Automated Name Search) to confirm your desired corporate name is not already in use or confusingly similar to existing names. The report costs approximately CAD 14 and is valid for 90 days. For numbered companies, this step is skipped.

File Articles of Incorporation

1 day (federal online); 1–5 days (provincial)

File Articles of Incorporation with Corporations Canada (federal — CAD 200 online) or the relevant provincial registry (e.g., Ontario: CAD 300 online). Federal incorporation is processed within 1 day online; provincial timelines vary.

Post-Incorporation Setup

1–3 days

Prepare corporate bylaws, issue initial shares, hold an organisational meeting of directors, and set up the corporate minute book. Register for a Business Number (BN) with the Canada Revenue Agency (CRA), which includes GST/HST, payroll, and import/export accounts.

Extra-Provincial Registration (if needed)

1–2 weeks per province

If your federal or provincial corporation will operate in other provinces, register as an extra-provincial corporation in each additional province.

Corporate Bank Account

1–3 weeks

Open a business bank account with a Canadian chartered bank. Most banks require at least one director to attend in person or via video for the account opening process.

Costs & Fees

Government / License Fee	CAD 200 – 400
Our Service Fee	USD 2,000 – 5,000
Annual Renewal	USD 1,000 – 2,500

Fees are indicative and may vary based on business activity, entity type, and additional approvals required. Contact us for a precise custom quote.

Get Custom Quote

Banking

Canada has one of the most stable banking systems in the world, dominated by the 'Big Five' chartered banks. Canadian banks weathered the 2008 financial crisis without any bailouts — the only G7 country to do so. Account opening for corporations typically requires at least one director to attend in person or by video. Online-only banks like Wealthsimple Business and Wise Business offer alternatives.

Account Opening Time

1–3 weeks

Multi-Currency

Yes — multiple currencies supported

Recommended Banks

Royal Bank of Canada (RBC)Toronto-Dominion Bank (TD)Bank of Montreal (BMO)ScotiabankCIBCNational Bank of CanadaWise BusinessWealthsimple Business

Tax Overview

Corporate Tax

15% federal + 8–16% provincial (combined effective: ~26.5% in Ontario; ~23% in Alberta; ~27% in BC); small business rate: 9% federal on first CAD 500,000 for CCPCs

Personal Income Tax

15–33% federal + 4–25.75% provincial (total combined marginal rate up to ~54% in some provinces)

VAT / Sales Tax

5% GST (federal) + PST/HST (provincial: 0% in Alberta; 10% in Maritime provinces; combined HST of 13% in Ontario, 15% in Nova Scotia)

Capital Gains Tax

50% of capital gains are included in taxable income (effective rate ~13.25% for corporations at 26.5%); proposed changes to include 66.7% for gains above CAD 250K

Withholding Tax

25% on dividends, interest, and royalties paid to non-residents (reduced by treaties — e.g., 5% US, 10% UK on dividends)

Double Tax Treaties

95 countries

The Small Business Deduction (SBD) reduces the federal rate to 9% on the first CAD 500,000 of active business income for Canadian-Controlled Private Corporations (CCPCs). The SR&ED tax credit provides 35% refundable credit for qualifying R&D expenditures for CCPCs (15% non-refundable for other corporations). The Lifetime Capital Gains Exemption (LCGE) provides up to CAD 1.25M tax-free on sale of qualifying small business shares.

Visa & Residency

Start-Up Visa Programme

Permanent residency

For entrepreneurs with a qualifying business concept accepted by a designated Canadian incubator, VC fund, or angel investor group. One of the world's most generous entrepreneur immigration programmes.

Intra-Company Transfer (ICT)

1–3 years, renewable

For executives, managers, or specialised knowledge workers being transferred to a Canadian subsidiary or affiliate.

Owner-Operator LMIA

2 years, pathway to PR

For foreign nationals who own and actively manage a Canadian business. Requires Labour Market Impact Assessment.

Provincial Nominee Programs (PNPs)

Permanent residency

Each province has its own entrepreneur or business immigration stream with varying investment and job creation requirements.

Family visa: AvailableProcessing: 4–16 months depending on programme

Frequently Asked Questions

Federal vs provincial incorporation — which should I choose?

Federal incorporation (CBCA) is best if you plan to operate across multiple provinces — it grants automatic name protection nationwide and the right to carry on business in any province (with extra-provincial registration). Provincial incorporation is simpler and cheaper but limits your corporate name protection to that province. For Ontario and BC specifically, provincial incorporation has the advantage of no Canadian director requirement.

Is a Canadian resident director required?

For federal corporations, at least 25% of directors must be resident Canadians (or at least 1 if the board has fewer than 4 directors). Ontario and British Columbia do not require Canadian resident directors for their provincial corporations. Alberta, Saskatchewan, and several other provinces also do not require resident directors. We can provide nominee Canadian directors where needed.

What is the SR&ED tax credit?

The Scientific Research and Experimental Development (SR&ED) programme is Canada's largest tax incentive for R&D. CCPCs can claim a 35% refundable tax credit on qualifying R&D expenditures up to CAD 3 million (15% non-refundable for other corporations). This is one of the most generous R&D incentives in the world, making Canada highly attractive for technology companies.

How does the Start-Up Visa work?

Canada's Start-Up Visa provides permanent residency to foreign entrepreneurs who receive a letter of support from a designated Canadian venture capital fund (minimum CAD 200K investment), angel investor group (minimum CAD 75K), or business incubator. There is no minimum personal net worth requirement. The visa includes family members. Processing takes 12–16 months on average.

What is the small business tax rate in Canada?

Canadian-Controlled Private Corporations (CCPCs) benefit from the Small Business Deduction, which reduces the federal tax rate to 9% (from 15%) on the first CAD 500,000 of active business income. Combined with provincial rates, the small business rate is approximately 12.2% in Ontario, 11% in Alberta, and 12.5% in BC. This makes Canada's small business tax rate competitive with many lower-tax jurisdictions.

Can I open a Canadian bank account remotely?

It is challenging but increasingly possible. The Big Five banks (RBC, TD, BMO, Scotiabank, CIBC) typically require at least one director to visit a branch in person or attend a video call. Some banks have relaxed requirements post-COVID. Wise Business offers remote CAD account opening but is an EMI (not a full bank). We recommend having at least one director attend in person for the smoothest experience.