If you’re considering expanding your business, take a look at what Canada can offer you as a business owner. While it may not have been your first thought, expanding your business into Canada could be a smart move. According to the most recent KPMG study, Canada’s business costs are five percent lower than in the United States and are the second-lowest of all the countries KPMG studied. That means that doing business in Canada can be better for your company financially, and yet you’ll still be able to do business in the North American market outside of Canada because of the North American Free Trade Agreement (NAFTA).
Other reasons to incorporate in Canada include having the choice of federal or provincial incorporation, ease of incorporation due to less strict guidelines than those of other countries, and limited liability on shareholders and company owners if the company does not do well. This last benefit is thanks to Canadian laws that give rights to a company as if they were individuals, rather than seeing the shareholders take the brunt of the responsibility. This is particularly beneficial for rocky economic markets (such as the one we’re currently experiencing) because if the company flounders, the shareholders don’t lose more than they invest.
Leader in Medical, Digital, Food Industry Developments
According to Dun & Bradstreet’s Global Risk Indicator, Canada has a stable banking system and the country is considered one of the world’s safest in which to invest. Canada leads the world in new developments in medical, digital, and food industries and is recognized as a top contender in the fields of pharmaceuticals, engineering, and aerospace. And they have a highly educated and trained workforce. In fact, more adults are vocationally trained and college educated in Canada than in the U.S.
Another advantage of incorporating in Canada is the low tax rates offered to businesses. Last year, the corporate income tax rate fell to 15 percent. The U.S. rate is 30 percent. In Canada, corporations are taxed separately than the owners of the business and the tax rates for corporations are lower than the individual tax rate. Shareholders will be taxed on dividends paid out by the company at the shareholders’ tax rate, however.
Consider A Corporation Status
If you decide to expand into Canada, choosing a corporation status is the recommended way to go. Corporations have an easier time in raising capital and securing loans than other types of businesses. This will allow your business to grow faster. Also, if you are the owner of a corporation, you will undoubtedly have shareholders to invest in the business. If you were to die, your corporation would still live on. That remains true even if your shareholders were to die. Their heirs would receive their share of the company, and it would continue on. In Canada, the laws regarding the passage of shareholders dividends on to heirs upon the death of a shareholder are less strict and the process is more expedited than in the U.S and other countries. This makes having your corporation, or even a part of it, in Canada a beneficial move.