In Canada you can incorporate federally, under the Canada Business Corporations Act, or provincially in the province where you will operate. Both create a real corporation; the differences are in name protection, cost and who can sit on the board.
Federal incorporation
- Name protection across Canada.
- Recognised nationally, which some partners and banks prefer.
- At least 25% of directors must be resident Canadians.
- You still register extra-provincially in each province where you carry on business.
Provincial incorporation
- Usually cheaper and simpler if you operate in one province.
- Some provinces, including Ontario and British Columbia, have no director-residency requirement.
- Name protection is limited to that province.
Which suits a non-resident founder?
If no one on your board lives in Canada, federal incorporation is not available to you as things stand, and a province without a residency rule is the practical route. If you have Canadian-resident directors and plan to work in several provinces, federal incorporation is worth the extra registrations.
This post is general information, not legal or tax advice. Rules change; confirm your own situation with a qualified professional before you file.
