Why start an offshore company in Canada?
Canada is the second largest country in the world. Owing to its natural infrastructure and geographic orientation, it proves itself to be a perfect location for businesses such as logistics, trading, imports and exports. Thus, the industry remains active and functional throughout the year producing export-worthy products, helping Canada’s GDP reach a massive 1.6 Trillion USD and continuing to grow at an impressive 3% annually. Canada offers a perfect business opportunity with a total population of 36 million people and a skilled workforce.
What is an Offshore Company?
A company incorporated in a jurisdiction other than the one where the beneficial owner resides is called an ‘offshore company‘. In other words, an offshore company is a company that is incorporated in a foreign jurisdiction. In contrast to an ‘onshore company,’ which is an entity that does all of its business within the borders of a nation, an ‘offshore company’ is a company that exists and operates outside the borders of a nation where it is incorporated. Since it is owned and exists as a non-resident entity, it is not subject to local taxation as all its transactions occur outside the country’s jurisdiction.
Why start an Offshore Company in Canada?
- A Global Trade Hub: Canada is the global hub for automotive manufacturers, petroleum refinery companies and Original Equipment Manufacturers (OEMs). That’s why Canada is the world’s second-largest exporter of cars, crude petroleum, refined petroleum, and automotive units’ spare parts across the Atlantic trade link, which includes countries like the USA, Caribbean regions and South America. Canada has expanded its range of products, including forestry products, various metals and consumer durables.
- Flexible Government policies: One of the reasons which make Canada’s government popular is the supportive government policies which are available for both citizens as well as business entities which are operating in the country. Like a flexible taxation system based on the internal and external orientation of business from Canada, 0 taxes when the activities are made outside Canada etc. The government also provides a flexible application process for the registration of Intellectual Property Rights. Thus, an offshore business in Canada is sure to prosper.
- Simple Incorporation Process: For the incorporation process of an offshore company in Canada, it is required to be a Private Limited Company. Another essential requirement is that the company must consist of one Director and one shareholder, one of whom must be a local director in the company who contributes a paid-up capital of one Canadian Dollar. This requirement deals with the Canadian Provinces’ federal legal requirements.
- Resourceful Internal Corporate Circuit: Canada has an ingenious internal circuit of corporate professionals that includes advisors, consultants, residential investors, commercial advocates etc. The inner channel is accessible through local nominee shareholders who become pseudo-critical managerial personnel of offshore companies and foreign-based subsidiaries. Networking with the corporate circuit could help in several ways, like:
- Availing a nominee director for the company incorporation.
- Grabbing opportunities to acquire plentiful funding options for building the company’s capital and expanding business.
- Despite the fact that offshore companies do not require any physical address for incorporation, they would still need warehouses and storage spaces for supply chain and trade-related activities.
How to open an offshore company in Canada?
Following are the steps which are required to open an offshore company in Canada:
- Filling of Application Form: An application has to be submitted to the Company Registry mentioning the following particulars:
- A Trade Name
- Details of the Company
- Details of the Shareholder
- Selecting the core services options such as offshore bank account, IP services, virtual offices etc.
- Uploading the requisite documents: After the first step, the applicant will receive a confirmation mail from the authorities. The mail would also include a separate ‘Client ID’ and a request to upload some documents for cross-verification. The following documents must be kept ready:
- Duly filled and signed business incorporation form
- Certified copy of the passport
- A bank reference letter from any institution that has known the applicant for at least two years.
- Copy of any one of these documents:
- Bank statement
- Recent utility bill
- Credit card statement
- Registering the Offshore Canada Company: After the requisite documents have been uploaded and submitted, a fee receipt gets generated, which can be paid using credit/debit cards, bank transfers or in cash at the office. After successful payment, a dedicated account manager is appointed. He will act as the point of contact for the subsequent years. He shall look into the incorporation process and keep the applicant informed regarding the process. After the company gets registered, documents containing consent and the resolution will be sent to the applicant for his signature.The registration of a company stands completed after this step.
- Additional services: In the next step, the account manager proceeds with the additional services opted for by the applicant in step 1. Some of these services are as follows:
- IP services in Canada
- Business License
- Offshore bank account in Canada
- Auditing and Accounting services
- Corporate Secretarial Services
- Nominee Director Services
- Company kit: After successfully processing the services, the applicant receives a company kit at this final step. The kit contains soft copies of all the essential documents such as:
- Business License
- Certificate of Incorporation
- Articles and Memorandum of Association
- Business Registration
- A resolution relating to the distribution of shares and nomination of Director
Thus, starting offshore companies offer many advantages, such as a more extensive consumer base, flexible legislation etc. It is a relatively new offshore location that provides several business advantages, thus making it a perfect location to establish an offshore company. It possesses a wealth of natural resources, a strong economy and cutting-edge technology. An offshore company in Canada will be able to take advantage of the country’s excellent image and reputation.Get in touch with an expert at Enterslice for more information on the same.
Read our Article: What are the Advantages of Company Registration in Canada?
Anjul completed his B.A.LL.B (Hons.) from Barkatullah University. Additionally, he also holds a Master’s degree in law with a specialization in Cyberlaws and Cybersecurity from The Jagran Lakecity University. He chose to pursue a career in legal research owing to his interest in content writing.