Canada

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DOING BUSINESS

 


Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

The governments, at a federal and province level, encourage investments in high unemployment rate areas or when the economic development is low. Incentives are mainly tax exemptions, regressive tax rate, guaranteed loan, aids granted for Research and Development. Then, each province should be contacted in order to find out about the different aids. Canada counts 12 provinces and territories: New-Foundland , Prince Edward Island, New Scotland, New Brunswick, Quebec, Ontario, Manitoba, Saskatchewan, Alberta, British Columbia, Northwest and Yukon Territories. The investment Agency of Canada also provides with useful information.

 

Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Sole Proprietorship 1 person. No minimum capital. The individual entrepreneur is liable for company's debts on his personal assets. Lower expenses as compared to a Private or Public Corporation. No
Private Corporation Maximum 50 partners. No minimum capital. Liability is limited to the amount contributed. They can vary from 315 to 500 dollars depending on the Provinces. No
Public Corporation No minimum. No minimum capital. Liability is limited to the amount contributed. They can vary from 315 to 500 dollars depending on the Provinces. Yes
General Partnership No minimum. No minimum capital. Partners' liability is joint and unlimited. Lower expenses compared with a Private or Public Corporation. No
Limited Partnership Maximum 20 partners. No minimum capital. At least one sleeping partner must have an unlimited liability, as well as active partners. Lower expenses compared with a Private or Public Corporation. No

Registration and licensing procedures
The drawing up of status is not subject to any specific obligation. Capital and status registration must be made with the Province where the activity is carried out, and within 30 days following the beginning of the activity.

Legal framework
The Investment Canada Law (LIC) regulates foreign investments in Canada. This law was passed on the 20th June 1985. Since then, some modifications have occurred since January 1st 1995, following the compliance with the WTO.

Foreign exchange control
There is no currency exchange control or regulation for capital transfers between Canada and foreign countries. Free conversion of currencies is carried out as well as the right to transfer profits, capital, dividends, interests and royalties.

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal as long as the project's close examination procedure is respected.  


Foreign Direct Investment inflows in Canada

FDI inflows 2003 2004 2005 World rank (*)
2005
FDI inflows (USD million) 7 615 1 533 33 822 97/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

 

Last modified in 2006 - ongoing update
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