Thinking of Starting a Business in Canada? Here's What You Need to Know

Canada has always been a natural choice for Americans keen on doing business abroad. And after this year's contentious election cycle, there may be U.S. citizens open to the idea of picking up and starting fresh in 'the great white north'.

Although there are plenty of rules, regulations and logistical hurdles you would need to overcome in order to set up a business in Canada, the process itself is typically pretty straight-forward.

To help you get started, here are a few basic tips and tricks that you'll need to sort out before crossing the border.

Starting a Small Business in Canada as an American

Registering Your Company

Assuming you've already got a business idea in mind, your first step will be to ensure you've got all of your legal boxes ticked.

First and foremost, you'll need to legally incorporate your business. As part of this process, you will need to use the Canadian Government's Business Registration Online (BRO) service to register for a business number. This unique number will be used in all future communications or transactions between your company and federal, provincial or municipal governments in Canada, and it lays the foundation for all future accounts processes like payroll deductions and corporation income tax.

After registering for your business number, Americans wanting to start a company in Canada will then need to finish registering their business online with a regional online registry service. From there, each provincial service may differ slightly in its registration requirements. The type of company you choose to incorporate will also dictate which requirements you must fill.

For example, in British Columbia, you will need a Canadian address in order to enjoy the tax benefits of a Canadian Controlled Private Corporation - but that doesn't mean you need to be a permanent resident. There are plenty of ways around this, including forming a business partnership with a Canadian living in Canada and using his or her address to start the business. But when in doubt, seek legal advice on this one.

Immigration and Visas

In addition to registering for tax purposes and legally incorporating your company, you'll also have to think about your own legal status as an individual. In most scenarios in most provinces, you are not required to be a Canadian resident in order to run a Canadian business. But U.S. business owners planning to work at their place of business will need to obtain “working status” from Citizenship and Immigration Canada (CIC).

Even if you are not planning to work at your new business, chances are you'll still need to obtain some sort of temporary work visa in order to conduct business when you're visiting your Canadian business. For advice on your own particular scenario, you should contact the CIC's Temporary Workers Unit. Never make any assumptions when it comes to crossing the border.

Licensing and Permits

After incorporating your company and ensuring you're allowed to work in Canada, you will need to obtain a license from the municipal authority that is responsible for the region where you're setting up your business. In Toronto, for example, you must apply to the city's Municipal Licensing and Standards Division outlining what type of business you're planning to open, and then provide documents like photo identification and proof of work status, proof of your business registration and any other forms that may be needed to show you owns your business.

As with a business in America, Canadian municipal authorities will then most likely have permits for various industries that you will need to obtain before you're allowed to start trading to the public. If you're unsure where to start, Industry Canada's BizPal service offers a free tool that helps you figure out what permits you may need for opening various types of businesses in different parts of the country.

Financing

Just like America, Canada offers plenty of special funding opportunities and wage subsidies that small business owners from all over the globe are free to take advantage of.

The government's Canada Small Business Financing Program offers generous loans for small businesses or start-ups with gross annual revenues of under $10 million. These loans can be used to purchase or improve land or existing buildings, buy necessary equipment or make necessary improvements to any equipment you may already own.

The government has also launched a wage subsidies system for certain industries that gives small business owners huge rebates to help and meet payroll obligations. These incentives vary depending upon the type of worker, type of business and where you're located.

The Bottom Line

Opening up a business in Canada is generally a quick and painless process - especially if you're a U.S. citizen. But there are plenty of rules, regulations and choices you will need to think long and hard about before deciding to take the plunge.

Remember: when in doubt, always seek legal advice before making an international business move. It could save you a whole lot of time and money.

US/Canada Border Photo via Shutterstock

This article, "Thinking of Starting a Business in Canada? Here's What You Need to Know" was first published on Small Business Trends