Setting up a Subsidiary in Canada
Vancouver and Surrey Lawyers for registering your subsidiary in Canada
Need to operate a Canadian subsidiary under your American parent company? Our Vancouver business lawyers have a number of years of experience in registering American companies in Canada and are here to assist with operational and tax questions.
This resource will highlight some of the ways your American business can operate legally from one province to another.
This guide provides a brief overview for American companies wanting to operate in Canada under a subsidiary branch, trust, or partnership.
What is a subsidiary?
A subsidiary is a company whereby the controlling entity is a corporation or whereby the only shareholder of the subsidiary is another company/corporation. The controlling company/corporation is typically known as the “parent corporation”.
Through Corporations Canada, an individual wanting to incorporate federally can incorporate a new company. For individuals wanting to incorporate subsidiaries provincially, the provincial website of the incorporation must be accessed.
How do I incorporate my subsidiary?
There are a number of considerations to make when deciding to incorporate your company:
- Residency Requirements
- Registration requirements for all provincial operations
- Tax considerations
Federal and/or provincial incorporation
When incorporating, incorporation takes place provincially or federally. If you incorporate federally, you must comply with the Canada Business Corporations Act (CBCA), a federal statute. The CBCA requires that at least 25% of directors are Canadian residents. If you incorporate provincially, your subsidiary will need to comply with the laws of that provincial jurisdiction
What are the residency requirements of operating a Subsidiary?
Provinces such as Alberta, Ontario, Manitoba, Saskatchewan and Newfoundland and Labrador require that at least 25% of the company’s directors are Canadian residents. Provinces such as British Columbia, New Brunswick, Nova Scotia, and Prince Edward Island do not have such residency requirements. This means that individuals who are not residents of Canada may incorporate new companies in these provinces.
How can I legally operate in another province?
If you incorporate in a particular province, it means that your newly formed company will be subject to the laws and jurisdiction of where the incorporation took place. For instance, if your subsidiary has been incorporated in British Columbia, your subsidiary will be subject to the laws of British Columbia.
Regardless of whether you are wanting to set up a partnership, trust or subsidiary in Canada, you will want to get in touch with an experienced corporate attorney in Canada.
Our Vancouver and Surrey lawyers are here to assist you with setting up your company. If you have questions regarding your business, get in touch with one of our corporate attorneys today. Call us today at 604-930-9578 or 1-800-930-9986.