Easy Guide to Starting a Small Business in Canada for Expatriates

Canada is consistently recognized as one of the most business-friendly countries in the world, thanks to its economic stability, skilled workforce, and government support for innovation. For expatriates, starting a small business here is not just about seeking profit, but also about taking advantage of a high quality of life and a highly open market.

Although Canada’s geography is vast and regulations can vary between provinces, the administrative system is designed to be transparent and efficient. With careful planning and an understanding of local rules, your dream of owning a business in North America can become a reality without having to navigate complicated bureaucracy.

Roadmap of Legal and Administrative Procedures for Starting a Business in Canada

Starting a business in Canada for expatriates is relatively easy. Moreover, Canada is ranked sixth as the best country for business. The economy is stable, free trade is guaranteed, and taxes are considered fair. This is a great opportunity for those who want to open a small business there. Here is a step-by-step guide to starting a business in Canada with ease.

1. Identify the Right Business Visa

First of all, you need to know which visa suits your business in Canada. There are several business visa options to consider, such as the Business Innovation and Investment Visa. For this visa, you need to have personal and business assets of at least CAD 800,000, and you must score at least 65 on the points test. There is also the interesting Start-Up Visa program. This visa can lead to permanent residency if your business is innovative and supported by recognized investors or business incubators.

Another option is the Entrepreneur Work Permits (C11), which is more flexible for entrepreneurs who want to actively manage their business in Canada. If you only have short-term business matters, such as meetings or conferences, you can apply for a Visitor Visa in the business category. The cost is CAD 100 plus a biometric fee of CAD 85.

2. Choose the Right Business Entity

Once the visa is settled, determine the most suitable business entity. In Canada, there are four main choices: Sole Proprietorship, Partnership, Corporation, and Cooperative.

For a simple small business, a Sole Proprietorship is the easiest because registration is fast and operating costs are low. However, the owner is fully liable for business debts. If you want better legal protection and a more credible business name, forming a Corporation is the right choice because a Corporation separates personal liability from company liability.

3. Prepare Complete Documentation

To ensure a smooth business establishment process, prepare complete and correct documents. For business documents, you must have a clear business plan, an invitation letter from a business partner in Canada (if any), and a complete company profile.

Additionally, you must prepare proof of sufficient funds for business operating costs. For a business visitor visa, the minimum suggested savings is CAD 5,000 to CAD 10,000, or approximately Rp 58.5 million to Rp 117 million.

Read Also: Easy Guide to Starting a Small Business in Singapore for Expatriates

4. Name and Register Your Business

Choosing the right business name is important for building your company identity. The name must be unique and not used by other companies. For Sole Proprietorships and Partnerships, you can register the business name with the provincial government.

The registration method varies by province but can usually be done online. For Sole Proprietorships and Partnerships, registration must be renewed every 5 years. Once registered, you will receive a business number to be used for official matters with the Canadian tax office.

5. Choose a Location and Handle Permits

A strategic business location is vital for success. All companies in Canada must have a clear office address for government correspondence. If you open a physical office, ensure the location complies with zoning regulations and obtain a business license from the city government.

Certain businesses like daycare, catering, or those using hazardous materials require special permits from the province. You also need environmental and zoning permits if your business has the potential to cause environmental issues.

6. Open a Business Bank Account

Opening a business bank account separate from your personal account is essential for professional financial management. Major banks in Canada offer various business account packages tailored to the needs of SMEs.

To open a business bank account, you must bring incorporation documents, a business number from the Canada Revenue Agency (CRA), proof of identity for directors or owners, and proof of business address.

Read Also: How to Start a Small Business in Australia with Limited Capital for Expatriates

7. Register a Business Number with the Canada Revenue Agency

Almost all businesses in Canada are required to register a business number with the Canada Revenue Agency (CRA). This business number serves as your company’s official identity in various transactions, including taxes.

Businesses with income of less than CAD 30,000 per year are generally not required to register for federal and provincial sales tax (GST/HST). However, most businesses must still register with the CRA.

Download Transfez App

Transfez App can help you transfer money abroad more quickly and efficiently. Jack Finance can also help your business in making transactions abroad. For those of you who want to send money to relatives who are abroad because they are studying, working, or traveling, Transfez will be ready to help. This app is available on Android as well as iOS.