Can a non-resident person incorporate the business in Canada?

Recently we received a few questions from our clients around the world, can I open a corporation for my business in Canada?

The simple answer is yes, some provinces do allow you to open corporations even though 100% of the directors are not Canadian Residents, but there is no requirement that all the shares of a corporation have to be held by a resident, which means, a non-resident can own the corporation 100% without any issues.

In most provinces, there is a requirement that at least 25% of the directors should be residents, but Ontario recently removed this restriction.

Having said that, if a corporation is controlled by a non-resident person, you will lose the small business deduction, which means you would have to pay more taxes in comparison to the corporation which is owned by a resident of Canada.

The best you can do is, partner with a Canadian resident, and let him control 51% of the corp. shares, and 49% by a non-resident, in this structure, the corporation will be considered, controlled by a Canadian Resident, and you will be able to take advantage of lower tax rates.

If you have any questions, feel free to contact us at 647-784-5708 or contact@kingsmanassociates.ca