Starting a small business in Canada as an American? Here’s what you need to know.
March 4, 2019
Canada is always a top choice for Americans looking to start a small business abroad. Moreover, there are likely to be U.S. citizens ready to pack and start life a fresh in this country, with a business prospect in mind.
In addition, it is near and most Americans are likely to be familiar with its provinces, territories, cities, laws and customs as well as currency and currency exchange locations Ottawa, Toronto, Montréal, and Vancouver among other major cities. Most things about starting a business in Canada you can just look online, at relevant websites.
Even with the rules and regulations as well as logistical obstacles, you will have pass through in order to set up a small business in Canada. It is all straightforward and easy.
Here are some basic tips and things you should know, before starting a business in Canada, as an American.
1. You need a business plan to succeed
There are loads of businesses started each year, most fail due to poor planning or lack of it. Therefore, you should write a proper business plan before you start out to run it, in Canada.
This is because starting a small business in another country is likely to take much of your time as well as resources. It would be a shame if it was all for nothing. Write an elaborate business plan and you are likely to succeed.
2. It is easy to start a business in Canada
Starting a business in Canada is very easy. The procedure is straightforward and it can take roughly five days to register it. It is a no brainer and requires less effort.
3. You will have to be a Canadian citizen or a landed immigrant
You cannot start a business in Canada if you are a tourist, visitor, a student or on a work permit. Collaborating with some Canadians for a start-up, does not mean you can reside in the country. You will need to immigrate to Canada to do so.
4. Not all Canadian businesses need to be registered
You do not need to register your business, especially if it is a sole proprietorship, with your legal name as its name, in any Canadian province.
Moreover, in Newfoundland and Labrador province you do not have to register your business if it is a partnership or a sole proprietorship.
However, take note that you will still need to register your startup with your municipality, regardless of the Canadian province or territory you are located.
5. Registering a business name in Canada does not protects its name
Registering your business name does not guarantee that it is protected and no one can use it. Although, there are different forms of business ownership, none of them can offer full name protection.
6. Most Canadian startups are self-bankrolled
As an American starting, a business in Canada may require you to dig into your own pocket for funds. This is what most Canadian startups do, with most starting with less than $5,000.
7. There are many sources of business loans
Canada small business loans financing program is well known for its support for Canadian startups as well as established businesses. There are also investor groups, non-profit and government-sponsored agencies that offer small businesses loans. You can also lean on banks for startups loans.
8. There are few grants for Canadian businesses
The Canadian government is not all about handouts, but they can help you a bit with some strings attached. It is hard to find no-strings attached grants, as they usually come with a set of conditions. For example, they may promote entrepreneurship among a certain group of people, location and even industry.
9. Small businesses can qualify for SR&ED tax credits
Your startup does not have to be incorporated or affiliated to a certain program or university in order to participate in SR&ED and earn its tax credits.
10. Canada’s system of incorporation is different from the American one
There is no LLCs or S corporation in Canada, but you can find some limited liability company options available for some professionals like accountants, lawyers and doctors
Moreover, incorporation can be provincial or federal. For the reason of potential liability, it is always a form of business ownership that you consider when starting your business.
In conclusion, starting a business in Canada as an American is not that hard, as you have seen above. You just have to know what you want to do and make a plan for it. The rest is basic research that is required of anyone, looking to start a business abroad.