This article guides you through the fees relevant to globally selling Canadian businesses on Etsy or Shopify. We'll also look at how Wise can help you go global
If you dream of being your own boss, and getting the opportunity to experience every aspect of running and growing a company, you may be thinking of setting up your own business. If this is the case, there are a few steps you’ll need to take. You’ll need to come up with a plan for the type of business you want to run, you’ll need to build a customer base and get connected to suppliers and specialists who can help you grow your enterprise. You’ll also need to register your business with the local or federal government before you can start to trade.
Registering your business is an important step which will ensure you have any necessary licenses or permits, can pay your taxes properly, and get access to all the funding and support available to you from government agencies. This guide covers all you need to know about registering your business in Canada, including:
- The preparation needed before getting registered
- How to get a Canadian visa if you need one in order to relocate
- Opening a non resident business in Canada as Canadian citizen or an expat
- Options for expanding an existing business into Canada to tap in to the market there
Before you can get registered, and get your business officially off the ground, you need to make a few decisions about the company you want to create. The type of legal entity you set up, and the business name you choose are both important foundations, so you’ll want to invest some time in thinking about them, and take professional advice if you need to.
When you register your business you’ll need to confirm the type of legal structure your business will have. The common options are sole proprietorship, partnership, corporation or co-operative. Each business structure has different advantages and disadvantages, so you’ll want to do some research to choose the best fit for your needs.
A sole proprietorship, for example, is simple and easy to register, but means you’ll be liable for any debts incurred by your company. On the other hand, incorporating a business takes a bit more work, but means your company is a separate legal entity and you’re not necessarily personally liable for debts, obligations or actions taken by the company.
Partnerships can be set up as general partnerships, limited partnerships or limited liability partnerships, and usually means you’ll still be responsible for the debts and obligations of the business. Forming a partnership with a Canadian resident can be a smart way to open a business here if you’re not a citizen yourself and don’t intend to move to Canada to run your company. More on that a little later.
If you’re not sure which business structure will suit your needs, you’ll need to take professional advice.
As well as selecting the business type you want to set up, you need to choose a name. This may be very simple if you have a strong view on the name you want to use. However you’ll still need to make sure it’s a name which can be officially registered — and hasn’t already been registered by another entrepreneur for a similar enterprise. Choose something memorable which describes the product or service you provide, for best results.
When you register your business with the federal government, you’ll get a Business Number (BN). This unique number is used whenever you’re dealing with the government, to sort out tax, payroll, import licensing and so on.
If you’re based in Quebec you’ll also need to register with the Registraire des Enterprises to make dealing with the Quebec government straightforward.
In most cases, as well as registering your business with the federal government you also need to register with your provincial or territorial government. The exact process you’ll need to follow will depend on where you live, and where your company is registered. You’ll be able to find all of the details you need for your location, online.
When you register, both with the federal government and the provincial or municipal authorities in your area, you may need to get special permits or licenses to allow you to do business. For example, if you run a food and beverage business, you may need to apply for a Safe Food for Canadians licence. You may also need a permit to supply or make animal products or pet foods, or if you want to sell pets, animals, plants and wood products. It’s a good idea to check online to see if there are permits needed in your location and industry sector, so you can get all your paperwork lined up early. Get all the details you need, over on the Canadian government website.
If you want to start a business in Canada, but you’re not a Canadian citizen or permanent resident, you may need to take a few more steps to make sure you can get your business set up. You’ll need to make sure you have the right visa for your needs, and can access the funding and support you need to break into a new market.
As well as dealing with the legal requirements for your business, you’ll need to think about how you’ll manage your money across different currencies while you make the move, and get your company set up. ⁶ ⁷
You could benefit from getting a Wise borderless account to help you organise your finances personally, and for your business. The borderless account is a multi currency account which lets you hold dozens of different currencies in the same place. You can make and receive payments in a wide range of currencies, and switch between them when you need to for a low fee. All currency exchange uses the mid market exchange rate, which is the one you’ll find on Google. There’s no markup added and no hidden fees to worry about, which means you keep more money for yourself, and spend less on bank fees.
A borderless account for business can also be a great tool for managing your company finances, sending and receiving international payments, and dealing with suppliers, customers and staff all over the world. You’ll be able to activate your own bank details for the US, UK, Australia, New Zealand and the euro area, so you can receive fee free payments and manage your money like a local in these major regions.
If you’re planning on investing in Canada, by expanding your business here, you’ll find plenty of support, advice and even funding to help you get started. There’s information online from the Canadian Trade Commissioner Service, and Invest in Canada, as well as resources from regional government authorities.
As an example, if you want to invest in Ontario, you’ll be able to get information and support covering the local incentive programs, business support services and industry specific market intelligence. You can also find details of properties and land available, including pre screened properties which come with information about zoning and the types of business they might be used for.
In terms of the structure of your business, you might consider opening a branch office in Canada or incorporating a subsidiary to your business here. If you plan to open a branch office you’ll have to register in every province or territory you operate in. With either option, there are also rules you need to know about regarding the residency status of your directors. These vary by province but broadly mean that a set percentage or number of your directors need to be Canadian citizens and residents. Make sure you get the right information for your location to help you decide the option which suits you best.
If you’re a foreigner and are planning on moving to Canada to start your business, you’ll need to get the right visa for your needs. There are two ways to go about this - through the start-up visa program, or as a self-employed person. The full eligibility requirements for these visas are available online, but here’s an outline of the basic criteria:
If you want to apply for a start-up visa you’ll need to fulfil the following requirements:
- You are eligible to apply for a visa in Canada, and meet the general admissibility requirements applied to all immigrants
- You have a qualifying business and a letter of support from a designated organization
- You meet the language requirements and have enough money to pay your way while your business is getting off the ground
To qualify under this scheme you need to show the following:
- You meet the general admissibility requirements imposed on all immigrants to Canada
- You have at least 2 years of relevant experience related to the work you intend to do
- You’re planning on being self employed you arrive in Canada
- You’ll make an economic contribution to Canada - assessed using a selection grid, on which you’ll need to score at least 35 points
Of course, you may want to launch or expand your business in Canada without actually moving here. That’s still possible, but exactly how you arrange it will depend on your circumstances.
If you’re a Canadian citizen but don’t live in the country, you can still open a business but you’ll need a Canadian address to use as the official base of your company.
If you’re not a Canadian citizen you can start a business in Canada by forming a partnership with a Canadian resident, or incorporating your business.
If you choose to create a corporation you’ll find there are rules about residency for directors — these vary by province so it’s important to check the legislation wherever you’re planning on basing your business. Federal rules state that a quarter of directors must be Canadian residents — or one director if the total number of directors is less than 4. There are also some restrictions based on the sector you want to work in. Some cultural fields such as book retailing or film production for example, require a majority of Canadian shareholders, while other sectors such as airlines also have restrictions in terms of the number of foreign directors allowed.
Whether you live in Canada or not you have the option of forming New business there with a Canadian business partner. In this case you can form a partnership and simply use your partner’s address as the location of the business, or incorporate in Canada bearing in mind the restrictions imposed on foreign directors.
Canada is an attractive place to do business. Whether you’re a Canadian citizen or not, you may decide that the Canadian market is a good place to launch or expand your company. You’ll have a number of different options available in terms of how to structure your company, and will find a lot of support available online courtesy of the Canadian federal and regional authorities.
It’s good to know that the exact process you follow will depend on the location of your business, as different provinces and territories have different requirements. Getting some professional advice can be a smart way to make sure you comply with all relevant legislation, and will also help you to tap into some of the support and funding available to your new company.
While you’re thinking about how to make sure you hit the ground running in Canada, don’t forget to get set up with a simple and convenient way to manage your money while you’re making the move there. A borderless account for personal and business use could be a good way to save time, and can cut the fees you need to pay for sending and receiving foreign payments. You’ll be protecting your profits and helping your business get the best possible start, as well as freeing up valuable time to invest in settling into your new life as an entrepreneur in Canada.
- Government of Canada - Registering your business
- Government of Canada - Business types
- Government of Canada - Permits and Licences
- Government of Canada - Search permits
- Canadian Food Inspection Agency - Centre of Administration for Permissions
- Government of Canada - Innovation Canada,
- Government of Canada - Innovation Canada - Find help for your business
- FedDev Ontario Small Business Services - Foreign Investment in Ontario
- Government of Canada - Business Immigration Programs
- The Balance Small Business - Can Start a Small Business in Canada as a Non-Resident?
- Corporations Canada - Directors and Officers
All sources checked 16 July 2019
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from Wise Payments Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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