Incorporation in Canada

Setting up a subsidiary company in Canada is often chosen to get a free access to foreign markets. A Company registered in Canada and exporting locally manufactured products and services to the United States and Mexico can do so free of custom duties (North American Free Trade Agreement).  Canada also has signed free trade agreements with many countries.

• The federal tax rate for Canadian-controlled small businesses only reaches 11% (small business deduction). Corporate tax rates payable at the provincial level are in a range of 3% to 16%.
• Business setup in Canada also confers certain tax benefits; losses can be carried forward up to twenty years. It is also possible for a shareholder to defer some personal income tax by retaining earnings at the company level.
• Canada has 95 double taxation avoidance treaties currently in force with countries including (i) the United States (ii) Australia (iii) Singapore (iv) the United Arab Emirates (v) India (vi) Germany (vii) France (viii) Russia and (ix) the UK. These treaties provide several advantages to reduce withholding tax payable after Canada business formation;
• For all the reasons listed above, Canada is ranked by the World Bank as the 9^th best country in the world for its tax system. Total taxation over a business’ earning only averages 21%, to be compared with 41% amongst OECD countries.