Canada is the second largest country after Russia. It consists of 3 territories, divided into 10 provinces. Canada has the surplus of natural resources: iron ore, nickel, zinc, lead, wood, water. The capital is Ontario, the largest cities are Toronto, Montreal, Calgary, Edmonton, Winnipeg, Halifax and Vancouver. Canada is considered as one of the three countries most promising for investment. Canadian law is based on the English Common Law system.
The most popular type of company in Canada is Corporation (EPC), it is currently one of the most respectable and reliable solutions.
Advantages of the company registration in Canada:
- More than 90 two-sided DTTs signed with Canada;
- Canada is in the OECD “white list”;
- Opportunity to have company in the jurisdiction with a high prestigious status;
- No beneficiaries registration;
- No residency requirements for the directors and shareholders;
- The company can be controlled by one person, being a shareholder, director and secretary;
- There are no requirements for the share capital amount;
- There are no restrictions on issued capital;
- No tax for income received outside of Canada;
- 25% Withholding tax – tax on dividends paid to non-residents. Double tax treaties help reduce the rate to 5-15%;
- Opportunity to open bank account with a Canadian bank and open an office to manage business in the United States and other countries.
Requirements for the company in Canada:
- Endings that can be used in the company’s name: Limited, Incorporated, Corporation, Limitée, Ltd., Inc., Corp., Ltee;
- The registered office must be in the province;
- At least 1 director and shareholder;
- The minimum share capital is $ 1;
- The company is obliged to submit an annual financial report and pay income tax.
Annual Accounts – contains information about the financial activities of the company. The report must be submitted within 6 months from the end of the reporting period. By default, the reporting period is defined as the calendar year from the date of the company registration. The total income tax rate depends on the company registration place and ranges from 25% to 29%. Corporate income is subject to corporate and federal taxation at the provincial level. There is a possibility to work within the framework of the agency agreement.
All Canadian companies annually submit a Tax Return not later than 6 months after the end of the fiscal year. If the company did not conduct business during the fiscal year, a zero report is submitted to the tax report.
Canadian banks do not collect tax numbers of the individuals and corporations which hold current bank accounts and do not report to the tax authorities or any other government authorities.