How to Start a Company in Canada: A Complete Guide

How to Start a Company in Canada: A Complete Guide

Canada is one of the most business-friendly countries in the world. With its stable economy, access to both U.S. and global markets, skilled workforce, and strong legal protections, it’s no wonder many entrepreneurs choose Canada as their base. Whether you’re a local or a foreign investor, setting up a company in Canada is relatively straightforward if you know the steps.

Why Start a Business in Canada?

  • Stable economy – Ranked among the world’s strongest economies.
  • Low business costs – Competitive tax rates compared to other G7 countries.
  • Global market access – Free trade agreements (like CETA, USMCA, CPTPP).
  • Skilled workforce – Multilingual, highly educated labor force.
  • Immigration opportunities – Business owners may qualify for residency programs.
  • Strong legal system – Transparent and supportive for entrepreneurs.

Step 1: Choose Federal or Provincial Incorporation

In Canada, you can incorporate either at the federal or provincial level:

  • Federal incorporation:
    • Allows you to operate across all provinces under one business name.
    • Offers strong name protection nationwide.
  • Provincial incorporation:
    • Limits operations (and name protection) to the chosen province.
    • Usually simpler and less expensive.
    • Popular provinces: Ontario, British Columbia, Alberta, Quebec.

Step 2: Decide on a Business Structure

Common options in Canada include:

  • Sole Proprietorship – Simple, but owner is personally liable.
  • Partnership (General or Limited) – Shared ownership; liability varies.
  • Corporation (Limited Company) – Separate legal entity; protects personal assets.
  • Co-operative – Member-owned structure.

👉 Most entrepreneurs choose corporation status for tax advantages and liability protection.

Step 3: Name Your Company

  • Conduct a NUANS name search (required for incorporation) to ensure your business name is unique.
  • Alternatively, you can use a numbered company (e.g., 1234567 Canada Inc.).

Step 4: File Incorporation Documents

You’ll need to submit:

  • Articles of Incorporation.
  • Registered office address in Canada.
  • List of directors (at least 25% of directors must be Canadian residents, unless exempt in some provinces).

Step 5: Get a Business Number (BN)

Issued by the Canada Revenue Agency (CRA), the BN is required for:

  • Filing taxes.
  • Opening a business bank account.
  • Registering for GST/HST (if annual revenue exceeds CAD $30,000).

Step 6: Open a Corporate Bank Account

You’ll need incorporation documents, your BN, and ID for directors/shareholders.

Step 7: Apply for Licenses & Permits

Depending on your industry, you may need additional approvals (e.g., food service, healthcare, finance).

Step 8: Stay Compliant

  • File annual returns with the government.
  • Maintain proper accounting records.
  • Pay corporate income tax (federal + provincial).

Costs & Timeline

  • Incorporation fees: CAD $200 – $500 (depending on federal or provincial level).
  • NUANS name search: ~CAD $13 – $75.
  • Legal/accounting support: CAD $1,000 – $3,000+ if using professionals.
  • Timeline: 1–2 weeks on average.

Final Thoughts

Canada offers entrepreneurs a strong foundation to start and grow their businesses. The combination of market access, skilled talent, and government support makes it an ideal location for both startups and established companies.

If you’re an international entrepreneur, Canada also provides immigration pathways for business owners, making it possible to run your company while gaining residency.