Set up a company in Canada.
A G7 economy, USMCA member, and one of the world’s strongest jurisdictions for technology, financial services, natural resources and AI research. Net federal corporate tax is 15%; combined federal + provincial ranges 23–31% depending on jurisdiction. CCPCs qualify for the 9% small business rate on the first CAD 500,000 of active business income. Federal or provincial incorporation; ULC available for US-headed groups.
The standard structure for foreign investors is a Federal Corporation incorporated under the Canada Business Corporations Act (CBCA), giving the company the right to operate under its corporate name across all of Canada. Alternatively, you can incorporate provincially — under the Ontario Business Corporations Act (OBCA), the British Columbia Business Corporations Act (BCBCA), the Alberta Business Corporations Act, or in Quebec under the Business Corporations Act. For US-headed groups, an Unlimited Liability Company (ULC) in Alberta, BC, or Nova Scotia is often preferred — it qualifies as a disregarded or partnership entity under US check-the-box rules.
You file Articles of Incorporation with Corporations Canada (federal) or the relevant provincial registrar, obtain a federal Business Number (BN) from the CRA, register for GST/HST, register for payroll, and complete provincial registrations where you operate. Standard formation takes 2 to 6 weeks. The combined corporate tax rate is 23–31% depending on province (15% federal + 8–16% provincial). CCPCs (Canadian-Controlled Private Corporations) qualify for the small business rate of 9% federal + 0–3.2% provincial on the first CAD 500,000 of active business income.
Grant & Graham coordinates Canadian formations through our San Diego office (our North America base) working with senior Canadian counsel in Toronto, Vancouver, Montreal and Calgary as appropriate. Federal or provincial choice, structure design, ULC structuring for US groups, banking, CRA registrations, payroll, sales tax, and ongoing accounting.
15% net federal CIT. 23–31% combined. 9% CCPC small-business rate.
Canadian corporate tax has three layers. The federal base rate is 38%, reduced by a 10% provincial abatement and a 13% general reduction to a 15% net federal rate. Provinces add their own general rate (8–16% depending on province) for a combined rate of 23–31%. Qualifying CCPCs (Canadian-Controlled Private Corporations) access the Small Business Deduction: 9% federal + 0–3.2% provincial = 9–12.2% combined small business rate on the first CAD 500,000 of active business income. Ontario’s 2026 Budget cuts its small business rate from 3.2% to 2.2% effective 1 July 2026. Pillar 2 GMT is in force in Canada from 2024 ensuring a 15% jurisdictional minimum for in-scope multinationals.
Other notable items: PIT federal 15–33% across 5 brackets + provincial. Dividend WHT 25% statutory, reduced under treaties (typically 5–15% — UK 5/15%, US 5/15%, Netherlands 5/15%). Branch tax 25% on after-tax profits remitted (treaty rates apply). Pillar 2 GMT in force in Canada from 2024 (15% jurisdictional minimum for in-scope MNE groups). SR&ED tax credit — one of the world’s most generous R&D incentives, up to 35% refundable for CCPCs. Carbon pricing applies across the federation. 95+ double taxation treaties — one of the broadest networks globally.
Nine reasons businesses choose Canada.
G7 economy, USMCA insider, world-class tech and AI ecosystem, predictable rule of law, the broadest tax treaty network of any major economy, and one of the most generous R&D incentive regimes globally. A natural North American base for groups that want US market proximity without US-style political and litigation risk.
G7 stability & rule of law
One of the most stable G7 economies. Independent judiciary. Predictable regulatory environment. Strong common-law tradition (civil law in Quebec). Transparency International typically ranks Canada in the top 15 globally for corruption perceptions. The premium for institutional stability is real for long-term capital and senior talent.
USMCA & US market access
Member of the USMCA free trade agreement with the US and Mexico — tariff-free access for qualifying North American content. The 2026 USMCA joint review process is the structural conversation for the region. Canadian operations are a common platform for European, Asian and UK groups serving the US market without direct US corporate exposure.
World-class AI & tech ecosystem
Toronto, Montreal and Waterloo are among the world’s leading AI research hubs — Vector Institute (Toronto), MILA (Montreal), University of Waterloo. Major tech anchors include Shopify, Lightspeed, Open Text, Constellation Software, Cohere, Wealthsimple. Strong fintech, SaaS, and HealthTech ecosystems. Cost-competitive engineering talent versus US West Coast.
SR&ED — world-leading R&D incentive
The Scientific Research and Experimental Development (SR&ED) programme is one of the world’s most generous R&D tax incentives. CCPCs can claim up to 35% refundable federal tax credit on eligible R&D expenditure. General corporations claim 15% non-refundable. Provincial top-up credits add 3.5–30% depending on jurisdiction (Quebec and Ontario particularly attractive).
Big 5 banks & deep capital markets
RBC, TD, Scotiabank, BMO, CIBC are among the world’s most stable major banks. TMX Group (Toronto Stock Exchange + TSX Venture) is a globally significant capital market — particularly for mining, energy, and growth-stage technology. Strong VC and PE ecosystem. Deep insurance and asset management base.
Natural resources & energy
Alberta oil sands, BC natural gas, world-class mining (gold, copper, nickel, uranium, potash, lithium). Major operators include Suncor, CNRL, Cenovus, Barrick, Teck, Cameco, Nutrien. Forestry, fisheries, agribusiness all globally significant. Critical minerals strategy increasingly aligned with US/EU partnerships under USMCA.
Bilingual market access
Officially bilingual (English/French). Quebec’s 8.5m residents are a strategic market for European groups, particularly French and EU brands. Montreal-anchored businesses gain access to the French-speaking market in North America alongside English Canadian and US English markets. Strong French-Canadian creative and media production base.
Global Talent Stream & immigration
Canada’s Global Talent Stream provides expedited work permits (2-week processing) for high-skilled tech workers. Express Entry permanent residency for skilled workers. Some of the most pro-immigration policies in any major economy. Critical for tech and engineering businesses that need to recruit global talent quickly, particularly relative to US H-1B uncertainty.
The broadest tax treaty network
Canada has 95+ double taxation treaties — among the broadest networks of any major economy. Combined with the country’s G7 reputation and stability, this makes a Canadian corporation a credible holding or operating structure for international groups. Reduced WHT rates on dividends, interest and royalties to most trading partners.
Six legal structures — one usually fits.
For most foreign investors, a Federal Corporation (CBCA) is the practical default — nationwide name protection and credibility. Provincial corporations work for province-specific operations. The ULC is the structure of choice for US-headed groups due to its US tax treatment. Branches and rep offices have specific narrow use cases.
Federal Corporation
The most common structure for foreign-invested companies operating nationally. Right to operate under the corporate name across all Canadian provinces (subject to extra-provincial registration). No share capital minimum. Resident-director requirement: at least 25% of directors must be Canadian residents (unless wholly foreign-owned subsidiary qualifying for exemption).
Provincial Corporation
Incorporated under the relevant provincial Business Corporations Act. Cheaper and simpler than federal incorporation, with no Canadian-resident director requirement in some provinces (BC, Ontario since 2021, Alberta in many cases). Must register extra-provincially in each additional province of operation. Recommended where operations are clearly confined to one province.
Unlimited Liability Company
The vehicle of choice for US-headed groups. Treated as a corporation under Canadian law but qualifies as a disregarded entity or partnership under US check-the-box rules — enabling pass-through US tax treatment whilst maintaining Canadian corporate form. Shareholders accept unlimited liability for company debts (typically mitigated through intermediate structures). Particularly common for US tech companies with Canadian subsidiaries.
Limited Partnership
Limited Partnership (LP): general partner(s) with unlimited liability + limited partners with capped exposure. Common for funds and investment vehicles. Limited Liability Partnership (LLP): for professional services (law, accounting, medicine, depending on provincial rules). General Partnership (GP): rarely used by foreign investors due to unlimited joint liability.
Branch Office
Foreign company conducting business in Canada through a branch. Must register as an extra-provincial company in each province of operation. Taxed at the same general corporate rates on Canadian-source income plus a 25% branch tax on after-tax profits (treaty rates may reduce, e.g. 5% under Canada-US treaty). Used where parent-level booking is structurally necessary.
Representative Office
Limited to liaison, market research, and promotional activities. Cannot sign binding commercial contracts or generate revenue. Lower setup cost than branch or subsidiary. Used by groups exploring the Canadian market before committing to a full structure. Less common in Canada than in many other markets — most groups proceed directly to a CBCA corporation.
Sole Proprietorship
Single individual carrying on business without separate legal entity. Owner has unlimited personal liability and reports business income on personal tax return. Not suitable for foreign investors or any meaningful commercial operation — included for completeness only. Most local consultants and freelancers move to a CCPC structure for tax and liability reasons.
Talk to us first
Federal CBCA for most foreign investors operating nationally. Provincial corporation for single-province operations. ULC for US-headed groups needing US flow-through treatment. Branch only where parent-level booking is structurally necessary. Rep office for market exploration.
Book a call →From decision to live entity.
The end-to-end registration sequence for a Federal CBCA Corporation or a typical provincial incorporation, coordinated by Grant & Graham and senior Canadian counsel. Standard timeline 2 to 6 weeks — Canada is one of the more efficient G7 formation jurisdictions, with digital filing now standard at federal and most provincial levels.
Federal vs provincial decision
Federal CBCA (Corporations Canada) for nationwide name protection and multi-province operations. Ontario OBCA, BC BCBCA, Alberta BCA, Quebec for province-specific operations. ULC (Alberta, BC, Nova Scotia) for US-headed groups. Cost and director-residency requirements differ — we recommend the federal route for most foreign-invested operating companies.
NUANS name search
Conduct a NUANS (Newly Upgraded Automated Name Search) report to verify the proposed corporate name is not confusingly similar to existing entities. Required for named corporations. Numbered corporations (e.g. "1234567 Canada Inc.") avoid the NUANS requirement and are commonly used for simple incorporations or where the operating brand differs from the legal name.
Articles of Incorporation
Draft and file Articles of Incorporation with Corporations Canada (federal) or the relevant provincial registrar. Define corporate name, share structure, restrictions on business activities (if any), number of directors. For federal CBCA: at least 25% of directors must be Canadian residents (with limited exceptions). Filing fee CAD 200 federal online; provincial fees vary.
Corporations Canada →Organisational resolutions & minute book
Adopt initial corporate by-laws, appoint directors and officers, issue founder shares, approve banking arrangements, set fiscal year-end. Maintain the corporate minute book — mandatory under Canadian law and regularly requested by banks, the CRA, and during due diligence. Senior local counsel typically prepares the full organisational resolutions and minute-book set-up.
Business Number (BN) & CRA registrations
Apply to the Canada Revenue Agency for a Business Number (BN). This is the federal identifier used across CRA program accounts: corporate income tax (RC), payroll (RP), GST/HST (RT), import/export (RM). Register for GST/HST once gross revenue exceeds CAD 30,000 in a quarter or year (mandatory) or voluntarily to recover input tax credits from day one.
CRA →Provincial registrations
Register for provincial sales taxes where applicable (Quebec QST, BC PST, Saskatchewan PST, Manitoba RST). Register with provincial workers’ compensation board (WSIB Ontario, WorkSafeBC, WCB Alberta). Quebec corporations register separately with the Registraire des entreprises and Revenu Québec (which administers Quebec corporate tax separately from CRA).
Extra-provincial registrations
If incorporated federally and operating in multiple provinces, register as an extra-provincial company in each province of operation (Ontario: simpler post-2021; Quebec: required, with French-language requirements for the corporate name in many cases). If incorporated provincially and operating in additional provinces, register extra-provincially there.
Bank account opening
Open the corporate account at a Canadian bank (RBC, TD, Scotiabank, BMO, CIBC, HSBC Canada, National Bank, or one of the digital alternatives like Wealthsimple Business). KYC including beneficial ownership disclosure, foreign shareholder documents (typically notarised), Articles, BN. CAD operating account; USD account commonly opened in parallel for cross-border operations.
Payroll & benefits setup
Register for payroll source deductions (CPP, EI, federal and provincial income tax withholding) with the CRA RP account. Register for Workers’ Compensation in each province of operation. Set up group benefits if applicable (extended health, dental). Engage a payroll provider (ADP, Ceridian/Dayforce, Wagepoint, Wave, QuickBooks Payroll) or outsource via Grant & Graham’s coordinated providers.
Ongoing tax, statutory & compliance
Annual corporate income tax return (T2) within 6 months of fiscal year-end (tax balance owing due within 2 or 3 months depending on size). Quarterly GST/HST returns (or monthly/annual depending on revenue). Monthly payroll source deduction remittances. Annual corporate return to Corporations Canada (federal) and provincial registrars. T4 / T4A / T5 information slips by 28 February. Pillar 2 GMT for in-scope multinationals.
What it costs to incorporate & run.
All figures are indicative for a Federal CBCA Corporation incorporated by a foreign corporate shareholder, with operations based in Ontario (Canada’s largest provincial market). Canada is one of the more cost-efficient G7 formation jurisdictions — lower than the US in many respects, materially lower than Germany or France. Provincial incorporations (BC, Alberta) cost slightly less; Quebec slightly more due to French-language and bilingual requirements.
One-time setup
Provincial incorporation (BC, Alberta) typically €500–1,000 cheaper. Quebec adds €800–1,500 for French-language and bilingual Registraire requirements. ULC structures (for US-headed groups) typically add €1,500–3,000 for the additional structuring work. SR&ED setup advisory available as add-on.
Ongoing monthly / annual
Audit not required for most private CBCA corporations (shareholder waiver permitted unanimously). Audit threshold and waiver provisions vary by province. SR&ED claim preparation typically priced separately on contingency or fixed-fee basis. Quebec separate Revenu Québec compliance adds ~30% to provincial-element pricing.
Get an estimate in 30 seconds.
Three quick questions. We will give you a realistic cost range and timeline for your situation, and route the answers straight into a fixed-price quote request.
Which company structure are you considering?
How is the shareholding structured?
What do you need from us?
The legal framework to know.
A summary of the core legislation governing companies in Canada. Substantive work delivered through Grant & Graham and senior Canadian legal, tax and accounting counsel in Toronto, Vancouver, Calgary and Montreal.
Corporate Law
- Canada Business Corporations Act (CBCA) R.S.C. 1985, c. C-44
- Provincial BCAs (OBCA, BCBCA, ABCA, etc.)
- Quebec Business Corporations Act
- Securities legislation (provincial)
Tax Law
- Income Tax Act (federal) R.S.C. 1985, c. 1 (5th Supp.)
- Excise Tax Act (GST/HST)
- Provincial tax statutes (esp. Quebec Taxation Act)
- Pillar 2 GMT (in force from 2024)
Employment Law
- Canada Labour Code (federally-regulated)
- Provincial Employment Standards Acts
- Workers’ Compensation legislation (provincial)
- Human Rights Codes (federal & provincial)
Privacy & Data Protection
- PIPEDA (federal privacy) S.C. 2000, c. 5
- Quebec Law 25 (substantial 2023–24 reform)
- BC PIPA, Alberta PIPA (provincial)
- Office of the Privacy Commissioner
Trade & Investment
- Investment Canada Act R.S.C. 1985, c. 28 (1st Supp.)
- USMCA (CUSMA in Canadian acronym)
- CETA (Canada-EU)
- CPTPP (Trans-Pacific)
Intellectual Property
- Patent Act
- Trade-marks Act
- Copyright Act
- Canadian Intellectual Property Office (CIPO)
Canada, answered.
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, sector, province preference, federal vs provincial decision, ULC suitability if US-headed, SR&ED eligibility, and director-residency planning. Honest assessment of fit.
Recommendation
Senior advisory on the right structure, province, name and capital, resident director arrangements (if needed), banking partner, SR&ED strategy. Fixed quote in EUR or USD.
End-to-end formation
NUANS, Articles, minute book, Corporations Canada or provincial filing, CRA BN, GST/HST, payroll/WCB registrations, banking. San Diego-coordinated, executed through senior Canadian counsel.
Ongoing support
Retained accounting, quarterly GST/HST returns, monthly payroll remittances, annual T2 corporate return, T4/T5 information slips, annual corporate return filing, SR&ED claim preparation, Pillar 2 GMT for in-scope groups.
Ready to incorporate in Canada?
Tell us in 25 minutes what you need. We will tell you honestly whether Canada is the right fit, whether federal or provincial incorporation makes sense, whether a ULC structure adds value for your US group, and whether SR&ED is worth optimising for — then handle the setup end-to-end through our San Diego North America base and senior Canadian counsel.