Starting a Business in Canada as a Foreigner: Complete Guide

Canada is a prime location for starting a business, offering a skilled workforce, government support, and reasonable living costs. Foreign entrepreneurs are welcome, with programs like the Start-Up Visa to ease entry. While the process may involve extra steps, Incpass can help you navigate them and unlock your entrepreneurial potential in Canada.

How to Start a Business in Canada as a Foreigner?

The Canadian government recognizes the potential of foreign entrepreneurs and offers a streamlined process for business establishment. Here’s a breakdown of the key steps:

Planning and Research

  • Market Validation: Conduct thorough market research to ensure your business idea caters to a specific need within the Canadian market.
  • Business Structure: Choose a suitable business structure – sole proprietorship, partnership, or corporation – based on factors like liability, scalability, and tax implications.
  • Business Plan: Create an articulated business plan outlining your company’s goals, strategies, financial projections, and marketing approach. A well-defined plan is crucial for securing funding and demonstrating the viability of your business.

Business Registration and Incorporation

  • Business Name: Select a unique and available business name through the provincial or territorial business registry.
  • Business Number: Get a Business Number (BN) from the Canada Revenue Agency (CRA) – a unique identifier required for tax purposes and registering for business permits.
  • Incorporation: For corporations, register with the provincial or territorial government’s corporate registry office. Incorporation offers advantages like limited liability and increased access to capital.

Immigration and Work Permits

  • Immigration Programs: Explore various immigration programs designed to attract foreign entrepreneurs, such as the Start-Up Visa Program and Provincial Nominee Programs (PNPs) with business categories.
  • Labour Market Impact Assessment (LMIA): In most cases, you’ll need a positive LMIA from Employment and Social Development Canada (ESDC) demonstrating that your business won’t negatively impact the Canadian labor market. This typically involves proving your intention to hire Canadian citizens or permanent residents.
  • Work Permit: Once you have an LMIA, apply for a work permit specifically designed for business ownership or self-employment.

Permits and Licenses

Federal, Provincial, and Municipal Levels: Depending on your business type and location, you may require additional permits and licenses from federal, provincial, and municipal authorities. These can range from health and safety permits to zoning approvals. Research permit requirements specific to your industry and location.

Taxes and Accounting

  • Registering for Taxes: Register your business with the CRA for income tax purposes. Understand your tax obligations based on your business structure and consult a tax professional for guidance.
  • Accounting System: Set up a strong accounting system to track your income, expenses, and financial performance.

Ways to Expand Your Existing Business into Canada

Established foreign businesses can leverage Canada’s open market to expand their operations. Here are two primary options:

  • Intra-Company Transfer (ICT): This program allows companies to transfer existing employees with specialized knowledge to their Canadian branch. This facilitates a smooth knowledge transfer and expedites the business setup process.
  • Wholly Owned Subsidiary: Foreign companies can establish a wholly owned subsidiary in Canada, essentially creating a separate legal entity operating under Canadian regulations.

Tips for Starting a Business in Canada

Beyond the formal steps, here are valuable tips to increase your chances of successful business in Canada:

  • Build a Strong Network: Connect with local business communities, chambers of commerce, and industry associations. Networking provides invaluable support, mentorship, and market insights.
  • Embrace the Regulatory Landscape: Familiarize yourself with Canadian regulations regarding business operations, employment laws, and consumer protection. Consulting with a lawyer specializing in business law is highly recommended.
  • Understand Cultural Nuances: Canadians value cultural sensitivity and ethical business practices. Building trust and fostering positive relationships with customers, partners, and employees is crucial.
  • Seek Professional Help: Consider working with experienced business advisors, accountants, and lawyers to navigate the intricacies of starting and operating a business in Canada.
  • Stay Informed: Stay updated on industry trends, economic developments, and government policies that may impact your business. Utilize resources like the Canadian government’s business website and industry publications.

Steps to Start a Business in Canada and Move to Canada as Foreigner

For those seeking to relocate to Canada and establish a business, here’s a streamlined approach:

Choose Your Immigration Pathway

  • Start-Up Visa Program: This program targets innovative entrepreneurs with strong business plans and the potential to create jobs in Canada. Applicants require a minimum viable product (MVP), letters of support from designated angel investor groups or venture capital firms, and sufficient personal funds for initial living expenses.
  • Provincial Nominee Programs (PNPs): Many provinces offer PNPs with business categories specifically designed to attract foreign entrepreneurs. Requirements vary by province, but generally focus on business experience, investment capital, and job creation potential. Research PNP options through the websites of individual provinces.

Develop a Compelling Business Plan

Your business plan serves as a cornerstone for both your immigration application and securing funding from investors or financial institutions. It should demonstrate the viability of your business, including:

  • A clear and concise description of your product or service.
  • Market research validating customer demand.
  • A well-defined marketing strategy for reaching your target audience.
  • Detailed financial projections showcasing profitability potential.
  • A solid management team with relevant experience and expertise.

Secure Funding and Obtain an LMIA

Before applying for permanent residency, secure sufficient funding to support your business operations and personal needs for a set period (typically one year). Funding sources can include personal savings, angel investors, venture capital, or business loans.

Once funding is secured, obtain a positive LMIA from ESDC. Your business plan plays a crucial role in demonstrating a positive impact on the Canadian labor market by creating jobs for Canadians or permanent residents.

Apply for Permanent Residency

With a well-developed business plan, funding secured, and a positive LMIA in hand, you can proceed with your permanent resident application through the chosen immigration pathway (Start-Up Visa Program or PNP). The application process involves submitting detailed documentation, undergoing medical examinations, and attending interviews.


Canada’s hospitable attitude and helpful ecosystem make it a popular choice for overseas businesses. Foreign nationals may successfully traverse the process of incorporating a business and perhaps establishing themselves as permanent residents in this vibrant and rich country by following the indicated stages, completing extensive research, and getting professional advice. Remember that success is dependent on a good company idea, cultural sensitivity, a dedication to creating trust, and a desire to adapt and grow in the Canadian business environment.

Frequently Asked Question

Can a non-resident establish a business in Canada?

Yes, non-residents can incorporate in Canada. Any foreign entrepreneur who wishes to start a business in Canada must go through the business immigration procedure if the entrepreneur intends to operate the business while in Canada.

Can I get my permanent residency after incorporating in Canada?

Yes, you can get your permanent residency after incorporating in Canada through the startup visa program. The Startup visa is a permanent residency permit issued to entrepreneurs who start a firm in Canada. To be qualified for this visa, your Canadian firm must have the assistance of a certain organization. – Your firm has been accepted into an authorized business incubator.

What is the cost of registering a business in Canada as a foreigner?

The cost of registering a business in Canada starts from $49 CAD to $499 CAD. This is determined by whether the firm will be registered in a province or incorporated at the federal level. However, as a foreign resident, you must consider the additional fees of company immigration and start-up.