Register a Subsidiary in Canada in 7 Steps: Benefits & Documents

Canada, with its stable economy, skilled workforce, and strategic location in North America, presents a compelling opportunity for businesses looking to expand internationally. Creating a subsidiary is one of the most popular methods for establishing a presence in Canada.

This article will guide you through the process of subsidiary company registration in Canada, covering essential steps, required documents, benefits, and costs. Whether you’re a small enterprise or a large corporation, this guide will will offer you the information you require to make wise decisions and successfully register a subsidiary in Canada.

Why Register a Subsidiary in Canada?

Canada’s strong economy, highly skilled labor force, and welcoming business environment make it a desirable location for international enterprises. Here are some key reasons to register a subsidiary in Canada:

  • Access to a Robust Market: Canada’s economy is strong and expanding, giving companies access to a wide range of customers.
  • Access to a Strong Market: Canada’s geographical location, sandwiched between the US and Europe, makes it advantageous for international trade.
  • Business-Friendly Environment: Canada ranks highly in ease of doing business, because of its government policies that are helpful and its transparent regulatory system.
  • Skilled Workforce: Canada provides businesses with the talent they need to flourish because to its highly educated and skilled work force.
  • Innovation and R&D: With a wealth of chances for research and development, Canada is a centre for innovation.

Steps to Register a Subsidiary in Canada

1. Choose the Right Structure 

Decide on the kind of subsidiary you wish to register. The most common structures are corporations, limited partnerships, and joint ventures.

2. Choose a Name 

Select a distinctive name for your subsidiary. Make sure it conforms with the naming guidelines established by the Canadian authorities. Make sure the relevant federal or provincial authorities have your preferred name reserved.

3. Create the Articles of Incorporation

Create the articles of incorporation, outlining the purpose, structure, and regulations of your subsidiary.

4. Register with the Government 

Submit your incorporation documents to the appropriate federal or provincial authorities.

5. Obtain Business Licenses and Permits

To operate in Canada, you could require particular licenses and permits based on your industry.

6. Register for Taxes

Apply for additional tax accounts and a company number from the Canada Revenue Agency (CRA).

7. Establish a Bank Account

Establish a bank account for your firm to manage your subsidiary’s finances.

Documents Required for Setting Up a Subsidiary Company in Canada

When registering a subsidiary company in Canada, you’ll need to provide several documents:

  • Articles of Incorporation: This document outlines the subsidiary’s purpose, structure, and governance.
  • Name Reservation Confirmation: Proof that your subsidiary’s name has been reserved.
  • Registered Office Address: A physical location in Canada where official correspondence can be delivered.
  • Director Information: Details of the subsidiary’s directors, including their names, addresses, and consent to act as directors.
  • Shareholder Information: Details of the subsidiary’s shareholders, including their names, addresses, and the number of shares held.
  • Bylaws: Internal rules governing the subsidiary’s operations.
  • Incorporation Fee: Payment of the required incorporation fee.

Benefits of Setting Up a Subsidiary in Canada

Legal and Financial Independence

A subsidiary functions as an independent legal body, shielding it from the parent company’s debts and financial hazards.

Local Market Penetration 

Establishing a subsidiary enhances your ability to understand and cater to the local market, fostering closer ties with customers.

Tax Benefits 

Canada provides firms with a number of tax breaks and advantages, such as R&D tax credits and low corporation tax rates.

Brand Credibility 

Using a local subsidiary helps you gain more credibility and reliability with Canadian customers.

Government Assistance

Government funding programs, grants, and other efforts that assist corporate growth and innovation are available to subsidiaries.

Expected Costs for Subsidiary Company Registration in Canada

The costs associated with subsidiary company registration in Canada can vary based on several factors, including the province of incorporation and the complexity of the business structure.

Here is an overview of potential costs:

  1. Incorporation Fees: The federal incorporation fees are between CAD 200 and CAD 250, however the provincial rates are subject to change. In Ontario, for instance, the cost is roughly CAD 360.
  2. Name Reservation Fees: Reserving a name typically costs around CAD 30 to CAD 60.
  3. Legal Fees: Legal fees for preparing incorporation documents and providing legal advice can range from CAD 1,000 to CAD 5,000.
  4. Business Licenses and Permits: Depending on the region and industry, obtaining the required licenses and permits may cost anywhere from CAD 100 to CAD 1,000.
  5. Office Space and Administrative Costs: Depending on your operation’s size and location, you will need to pay different amounts for office space and administrative costs.

Conclusion

Registering a subsidiary in Canada is a strategic move that offers numerous benefits, from market access to tax advantages. You can effectively create a subsidiary company in Canada by following the instructions in this article and making sure you have the required paperwork and money. You can set up your company for success in the Canadian market with IncPass by streamlining the registration procedure and gaining access to crucial business services like obtaining virtual office space and registering bank accounts. Contact Incpass to register your business in Canada today.