A helpful guide on how to understand business competitors in a new international market from Wise Business
Canada has the 10th largest economy in the world. It’s dominated by the service industry, but with a healthy slice of gross domestic product (GDP) coming from primary industries like logging. A high level of economic freedom means that Canada is home to some of the largest businesses in the world, with some 69 of the Forbes Global 2000.
But Canada is a great place for small and medium enterprises (SME) too. Over 1.1 million SMEs are registered there, with more than half of these having fewer than four employees. Employing almost 70% of the private sector workforce, these SMEs are the lifeblood of the Canadian economy.
If you're thinking of starting a new business in Canada, you need to know how. Here’s a helpful guide to get you started.
The main types of corporate entities in Canada are:
- Sole proprietorship
Sole proprietorship is intended for very small (or ‘one-man’) businesses, and your business interests are taxed alongside any personal income. This means you only have to do one tax return for yourself and the business, but this can increase your liability overall.
Partnership is a popular option, but has a similar liability issue made more complex by the fact that any partner in a business can be held liable for all the debts of that entity.
Corporations are the most common type of business structure because they are limited liability, meaning they are taxed separately to the individuals who set them up. However, to get this benefit you're required to keep detailed accounts (which come at a cost), and comply with all relevant legislation.
The cooperative is a less common structure which is both owned and controlled by the members.
If you’re not sure which business structure is best for you, then you can find out more by checking out the government of Canada’s handy comparison guide.
Setting up a business in Canada is fairly straightforward. Most of the process can be completed online, and there’s no minimum capital requirement.
You must, however, register at both federal and provincial level. Documents will be needed (which may vary according to the business structure you have chosen), typically including:
- Articles of Incorporation
- Registered office address and board of directors’ details
- Completed provincial registration for
You may also need to register your business for value added tax (VAT).
You can compare the administration needed to start a business in Canada, with that in other countries, on the website of the World Bank's 'Doing Business' report. This helpful site summarises some of the main legal and bureaucratic steps you'll need to take when starting your new venture.
To register your business you must first visit the Business Registration Online (BRO) page. From here you may then need to transfer to your provincial registration centre after registering for national programs.
The process varies slightly between regions, so make sure you understand the requirement for the province in which you're registering your business. A full list of the contact details for provincial and territorial registers are available on the government supported Canada Business Network site.
You're encouraged to apply online to register your business. Check out the BRO’s helpful ‘before you register’ guide available on their website. The information you need to have prepared in advance is set out clearly which can help to simplify the process.
The process to register costs CAD 200 and is impressively efficient. It takes only a short time to complete the online forms, and you'll have your corporate registration number within a day.
For some types of business activities you need further permits beyond simply registering your business. The Canada Business Network site offers a handy permit search by Canadian region tool, for the permits that might apply to your business. You can then get details of how to apply for any permits you require to operate legally.
As soon as you have employees, you have certain responsibilities. Details are set out on the ‘Employer Obligations’ section of the Canada Business network website. For example, you must hold a completed TD1 tax form for each employee, and are responsible for deducting pension contributions, income tax and employment insurance from them. More detail of the deductions required can be found on the Canada Revenue Agency website.
As a business owner, there are federal taxes that apply to your enterprise. It’s your responsibility to understand and a manage these payments, as well as any provincial or territorial taxes that may apply.
Old-world bank accounts only work properly in one country. They hold money only in one currency. And it gets expensive when you try to use them across borders. Wise's new Borderless accounts solve all of this.
Now you can send, receive and organise your money internationally, without crazy fees or even-crazier exchange rates – just a small, fair charge when your money moves between currencies.
The Canada Business Network website has great information that will help you run your business, and also hosts a tender page giving details of the government support (such as tax credit) you may be eligible for. Simply enter some details about the field in which you work, and you'll find any government programs for financing, or other support available.
Some provinces also offer an ‘Ask an Expert’ service, where you can pose questions relating to business growth (as well as tax or legal issues) directly to experts in the field. Alternatively, you might be able to find micro financing or seed capital through the one of the Canadian Government’s programs.
The Canadian Acceleration and Business Incubation organisation is an umbrella operation, helping foster links between start up businesses, government, industry, academia and other stakeholders in the growth of small business. Their website hosts information about topics such as getting a Startup Visa, and can be a helpful resource for anyone planning on moving to Canada for work.
Once you’re in Canada and ready to get going, look for local networking events on sites such as Meetup, Eventful and Eventbrite. Each province also has a ‘Small Business Network’ which run online and offline Meetups and other events. Here you can meet like minded people and build your customer and business contact book.
Every business needs a great plan and a little luck - but with help from your new network and friends, your business will get off to a flying start.
When starting your business, if you find the need to send or receive money from abroad at the least possible cost, consider using Wise. Not only does their real mid-market exchange rates generally beat the banks, but since your money is received and sent locally in both the sending and recipient currency, all those nasty international fees magically disappear. Give it a try.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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