Wondering who can start a business in Canada?
In Canada, starting a business is open to anyone who meets the legal requirements and has the necessary resources to set up and run a business.
There are no restrictions on citizenship, residency, or nationality to start a business in Canada.
Here are some of the key requirements to start a business in Canada:
- Legal Age: To start a business in Canada, an individual must be at least 18 years of age or have reached the age of majority in their province or territory of residence.
- Business Name: A business name must be registered with the appropriate provincial or territorial government agency. This process is typically straightforward and can usually be completed online.
- Business Structure: There are several business structures to choose from in Canada, including sole proprietorship, partnership, corporation, and cooperative. Each structure has its advantages and disadvantages, and choosing the right one depends on the type of business and the owner’s personal preferences.
- Permits and Licenses: Depending on the nature of the business, certain permits and licenses may be required at the federal, provincial, or municipal level. For example, a restaurant may require a health inspection and a liquor license.
- Taxes: All businesses in Canada must register for a Business Number (BN) and collect and remit appropriate taxes. The Canada Revenue Agency (CRA) is responsible for collecting federal taxes, while provincial and territorial taxes are collected by the respective governments.
- Financing: Starting a business in Canada can be expensive and often requires financing. Financing options may include personal savings, loans from banks or other financial institutions, grants, or venture capital.
Can a non citizen start a business in Canada?
Absolutely! Regardless of citizenship, Canada is a great place to start and grow a business.
As long as you have the right documents, such as a work permit or visa, you can start your own business in Canada.
Additionally, resources are available to help non-citizens get their businesses off the ground.
Organizations like Futurpreneur Canada provide mentorship and financing for entrepreneurs who are permanent residents or have a valid Canadian work permit.
Even if you’re from abroad and want to start a business in Canada, you don’t have to immigrate.
The Investment Canada Act was made for non-Canadians who are looking to create a new Canadian business or take control of an existing one.
So don’t let your citizenship status stop you from pursuing your dreams – starting a business in Canada is completely possible!
How to Immigrate to Canada and start a business
As a non-resident, it is possible to start a business in Canada by immigrating.
For those looking to do so, there are two visa programs specifically designed for immigrants who wish to operate a business in the country.
a). Start-Up Visa Program
The Start-Up Visa program is designed to support immigrant entrepreneurs who wish to move to Canada and establish a business.
To be eligible, businesses must meet certain criteria.
Your business idea should be:
- Can create employment opportunities for Canadians, and
- Can compete on a global level.
At the same time, you must meet Canadian language requirements and demonstrate that you have enough funds to settle in Canada.
Additionally, those intending to move to Quebec and establish their own business must meet this province’s specific requirements for immigrant entrepreneurs.
To apply, you should obtain the backing of one of the authorized organizations.
b). Self-employed Persons Program
The Self-employed Persons Program in Canada is an option for immigrants who wish to start a business in the arts, entertainment, or sporting industries.
This Program provides an avenue for starting a business in these fields.
To qualify, you must:
- Have relevant experience in cultural activities or athletics, and
- Intend to make a significant contribution to cultural or athletic life in Canada.
This visa could benefit self-employed individuals such as actors, musicians, and athletes.
Applications will be assessed based on experience, education, age, language aptitude, and capacity to adjust and are further subject to medical and safety screenings.
Steps to start a business and move to Canada as a foreigner
If you don’t meet the requirements for the immigration visa programs available, here are the steps to take:
a. Obtain a multi-entry visa
If you’re considering starting a business in Canada, obtaining a multi-entry visa can grant you the freedom to enter and exit the country multiple times over a 10-year period.
This provides you the opportunity to research and explore different areas before committing.
Additionally, research into other visa programs you may be eligible for and familiarize yourself with citizenship requirements.
b. Register your business
It is possible to register a business in Canada without being physically present.
A Canadian citizen or permanent resident is required in certain areas as a company director.
This director might not need to own any equity in the business, but it is crucial to remember that the rules can vary depending on a variety of factors.
Additionally, some jurisdictions may require that the Canadian director assume responsibility for the company.
For instance, 25% of the directors must be Canadian residents if you wish to incorporate in Ontario federally.
Ontario, Alberta, and British Columbia don’t demand a resident director for provincial incorporation.
What is necessary is that you have an address within any of those provinces.
If you don’t live there, Alberta and British Columbia require you to appoint an incorporator or a representative of incorporation, and the individual must be a resident of the province.
If you want to avoid hiring a Canadian director when registering your business, British Columbia can provide an ideal solution.
It is the only province or territory that allows corporations with 100 percent foreign national ownership.
Additionally, you may want to consider BC’s tax rates when deciding.
However, it is important to keep in mind that the right province or territory for your business is not just about location.
Business taxes for corporations vary across the country and you need to be aware of the specific provincial tax laws and federal taxes applicable to your chosen location.
This is why it is important to do your research before making a decision.
c. Apply for an LMIA
Registering a business is an important step, but it does not give you the right to operate straight away.
You must apply for a Labour Market Impact Assessment (LMIA) first.
The LMIA is there to ensure that your business operations, as a foreigner, will not negatively affect the Canadian labour market.
That is, it will not reduce job opportunities for Canadians or permanent residents.
To apply you must provide a detailed business plan which shows that you intend to hire at least one Canadian citizen or permanent resident by the time you start operations.
You must also demonstrate that you can afford to cover the cost of your own, and your family’s, living expenses as well as your business expenses.
d. Apply for a permit to work in Canada
Once a LMIA (Labour Market Impact Assessment) has been approved, submit an application for a work permit.
This is different from a visa in most cases and is essential for conducting business in Canada.
The process of getting a work permit in Canada can take a few months.
Nevertheless, if you have a Temporary Resident Visa or a Visitor Visa to the US, applying for a work permit at the Canadian border may be possible.
Understanding the paperwork and the time it takes to secure a visa and work permit may be overwhelming.
Therefore, you may choose to hire the services of an immigration representative.
Although hiring a professional does not guarantee the approval of your applications, it can help to prevent any administrative errors which could cause further delays in the process.
Canadian Small Business Taxes
Owners of businesses may be eligible to receive a refund of the Goods and Services Tax (GST), and Harmonized Sales Tax (HST) paid for goods and services used for business purposes.
Registration for GST/HST is not necessarily required for small suppliers, who generally earn less than $30,000 in a year; however, registration can provide access to Input Tax Credits, which can be used to obtain a refund of the GST/HST paid.
Micro-businesses can qualify for SR&ED tax credits, regardless of incorporation or affiliation with a university or program. Taking advantage of the SR&ED program and earning tax credits is an achievable goal for small businesses.