Business immigration: starting small business in Canada
Canada is often chosen as a country for business immigration due to the opportunities that this state can offer to foreign entrepreneurs. The basis of this statement is a number of indisputable facts:
- In the world, the Canadian economy ranks 14th in terms of GDP when it comes to purchasing power parity, and GDP per capita is almost $ 47,000;
- Proximity to the US has become an incentive to sign free trade agreements between countries;
- The Canadian economy is based on industry and services, which employ about 70% of the population. The tertiary sector of the economy generates 23% of GDP;
- Sources of substantial income include tourism – Canada is one of the five most visited countries;
- A foreigner from any country has the right to register a business. The procedure takes from 24 hours to five business days. However, some types of entrepreneurial activities, for example, the provision of medical services, can only be done by Canadian citizens who have documented their level of professionalism;
- Local tax authorities are loyal to the mistakes of beginning businessmen and help entrepreneurs correct them in a timely manner.
Business immigration to Canada is the best way to obtain Canadian citizenship for citizens of the Russian Federation, Belarus, Ukraine and other countries. Developed infrastructure, low level of corruption and crime, the presence of highly qualified specialists contribute to the development of business in this country. The vast territory allows you to choose the most suitable region for business. And the support of compatriots will help minimize the period of adaptation to living in new realities.
3 Main Types of Business Visa to Canada
A foreign entrepreneur who has decided to register a company in Canada must obtain a visa according to one of the business programs, each of which presents to the applicant certain requirements regarding education and the amount of investment in the economy. The applicant can use one of three types of visas:
- Self-employed Persons Program. The labor activity of an immigrant should be related to: culture, art, sports, farming. Immigrants can be professional: writers, designers, athletes, artists, librarians, journalists, musicians, engineers. The advantage of the Self-employed Persons Program is the lack of age restrictions and strict requirements for knowledge of English or French;
- Start-up Visa. To take advantage of this program, it is necessary to prepare a business project, correctly present it and find a Canadian sponsor (angel investor). The difficulty lies in the fact that it is important for a foreign entrepreneur to prove the profitability of a future enterprise. On the other hand, the process of evaluating start-ups is well-established – 7 methods that have proven their effectiveness are widely used;
- Immigrant Investor Venture Capital Pilot Program. The program is intended for the most wealthy foreign entrepreneurs. According to the conditions, the businessman must invest 2 million Canadian dollars in the economy. The money will be spent on funding Canadian startups. The state does not guarantee a refund. Also, a foreigner must have at least 10 million Canadian dollars earned from conducting a legal business in his bank account.
In addition to the 3 indicated types of business visas, there are also their provincial counterparts – immigration programs aimed at attracting businessmen. For example, Self-Employed Farmer Stream operating in the province of Alberta.
Forms of Business and Their Impact on Citizenship Leadership
In Canada, there are 3 ways of doing business, according to the territorial scope:
- Federal. A company can conduct business throughout the country, but at least a quarter of its leaders must be Canadian citizens;
- Provincial. The functioning of the company should not go beyond the boundaries of the province in whose territory it is registered. In most regions, 25% of a company’s management team should be Canadians;
- EPC (Extra-Provincial Corporation). Such an enterprise may be registered outside the province. To conduct business in this region, he allows a special license.
4 forms of distribution of responsibility between partners are also different:
- Corporation – personalized for everyone;
- General Partnership – collective;
- Limited Partnership – on the basis of a partnership agreement between the partners;
- Sole Proprietorship – complete for a single owner for all obligations.
For small businesses, the latter option is considered the most optimal in terms of complexity and registration time. It includes entering the name of the company in a special registry and processing the personal data of the registrant. The amount of working capital is minimal, but the personal responsibility of the entrepreneur is unlimited. But: losses are allowed to be used to reduce tax obligations, spouse’s wages are deducted from income. The regulation of the work of individual entrepreneurs by the state is very transparent, the rules of work change extremely rarely and not significantly.
Small Business Registration Process
According to the Doing Business Report for 2019, Canada takes the honorable second place out of the 190 countries analyzed in terms of the complexity of the business registration procedure. In addition, in terms of the total amount of doing business, it is stably located within the first half of the third ten. The vast majority of small companies open within 36 hours of filing.
Some requirements for start-ups vary in different provinces. But you can always apply for the registration of a small company through the website, an authorized lawyer or in person.
After approval of the application and the provision of a package of documents, the new company or private entrepreneur is registered with the provincial executive authority, and then the tax payer number registered with the Canada Revenue Agency is assigned. If the company’s turnover exceeds CAD $ 120,000 per year or $ 30,000 per quarter, then you cannot avoid registering as a VAT payer, this procedure will require you to contact the Revenue Office of Canada Revenue Agency. And this action can be performed remotely, for free.
You can open a start-up or buy an existing business – it is up to you. We advise you to deeply analyze the features of the type of activity that you liked and of the province. You should always start by reading the terms of the provincial immigration programs targeted at businessmen and investors. Naturally, do not forget to get advice on the features of the Start-up Visa program in adapting to your realities.
Lending programs Relevant to Start-up Immigrants
Representatives of a small business are actively using loans – they resort to the services of the following banking institutions: Royal Bank of Canada (RBC), Bank of Montreal (BMO).
Separately, it is necessary to highlight the Business Development Bank of Canada (BDC) specializing in providing loans to start-ups, small and medium-sized companies. If your age is in the range of 18 to 29 years – visit one of the BDC offices for a loan on favorable terms under the program of support for “young entrepreneurs”.
The Canada Small Business Financing (CSBF) is a state-owned non-agricultural small business loan program. Consider the possibility of obtaining a loan at a rate of 2 to 3% per year in the amount of up to CAD $ 250,000 if the annual income of your company does not exceed CAD $ 5 million and the lending period is not more than ten years.
The Canada Immigrant Investor Program (CIIP) is a targeted immigrant business support program funded by entrepreneurs who have settled in Canada. It is widespread due to provincial support. We recommend that you familiarize yourself with CIIP details at the Business Service Center of the province that has fascinated you.
Really low interest rates and equal access to credit for small, medium and large businesses have made Canada a haven for progressive start-ups and corporations from all around the world. Hundreds of thousands of individual entrepreneurs from all over the CIS have found their “place in the Sun” here.
Actual Tax Rates for Small Businesses – Start-ups
Since 1976, Canada has been part of the G7, not least because of the expanding influx of inventors and business executives, businessmen of various calibers. The Canadian government is promoting start-ups and small businesses with a long history, not just in words but in deeds. Tax rates in Canada are among the lowest when it comes to the most economically developed countries:
At the Federation level, the corporate income tax rate is 15%. In the provinces, income tax rates range from 11.5 to 16%;
VAT i.e. sales tax also has a two-tier structure. 5% is paid to the budget of the Federation, an additional 7 to 10% to the provincial budget, where economic activity is registered;
The size of income tax is tied to the level of income – it ranges from 15 to 33%. With an increase in income, the tax rate increases.
Canada has already become home to hundreds of thousands of Russians, Belarusians and Ukrainians. So the number of Canadians of Ukrainian origin exceeded 300,000 in 2019, and Russians altogether 600,000. Of course, not all of them are entrepreneurs today, but many found their dream thanks to business immigration programs and reliably entrenched in Canada.
If you want to change your place of residence to a much more stable and safe one, give your children a thorough education and create a business that is protected from the whims, bribes of officials, the lawlessness of the judiciary – feel free to contact us. We will help you move to Canada as quickly as possible according to the program convenient for you, adapt, open or buy a small business and start a new, happy life.
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