Is Canada a good location for your start-up?

Starting a business is difficult enough without adding the potential bureaucratic issues that may appear along the way. This is the reason why people seek locations that promote a very facile business registration process. Canada is one of these places and that is why it can be found among the top choices for immigrants. Starting your business journey in Canada is a straightforward one, with no intricate details or logical hurdles. The services that the Canadian Government offers make launching a company a commodious process, especially for people who enter the business field for the first time.


Canada’s Business Registration Online (BRO)

The Government of Canada set up an online service that is called Business Registration Online. The tax laws are administered by the Canada Revenue Agency (CRA) which offers all needed information with regard to starting a business. The CRA official website provides people with the needed details in terms of payroll, business number registration, excise taxes, deductions, GST/HST registration and much other relevant information that clarifies any confusion that may appear in launching a start-up.

The BRO platform allows new entrepreneurs to obtain a business number, to register for a program account and even to link to other businesses through a provincial program within the online platform. The CRA program accounts include corporate income tax, GST/HST, payroll deductions and import-export.

The BRO platform can be used by any existent business owner, new business owner or third-party requester. The only conditions to be respected are possessing a Social Insurance Number (SIN) and filing the income tax return. The application process for a SIN differs for people who reside in Canada and people who reside outside of Canada. People can apply for a SIN via email by simply providing the needed documents which are listed on the BRO platform as well.

Tax incentives in Canada – the SR&ED Program

The purpose and benefits of the federal SR&ED Program were presented in a mandate developed by the Review of Federal Support to Research and Development Expert Panel. The main purpose of the program is to simplify the tax credit while also improving its effectiveness. Most people can easily access the SR&ED credit considering the changes that occurred in the past few years. The program is running since 1985 and is constantly expanding to meet the current requirements. The SR&ED tax credit covers spending that falls into categories such as labor, equipment, contract, and third-party payments.

The number of credit claims through the SR&ED Program is promising and continues to rise. Since 2012, the program kept accelerating in terms of popularity. An increase in screening SR&ED claims, in the number of requests for receiving more information about the program, in positive reviews, in the number of audits was visible after modifying the tax law. The program is very helpful for start-ups as it returns around 35% of the R&D spending of their business. The threshold reaches $3 million. The SR&ED Program is unique and it is a solid reason why people choose Canada to start their business.  

Obtaining a business loan to finance your start-up

The increase in lending money was obvious since 2014. The biannual surveys managed by the Government of Canada stated that small and medium businesses borrowed more money in the past couple of years. The net volume of loans was calculated for each quarter and the results were totaled to obtain an annualized value. Financing suppliers stated that the amount of credit granted in the first quarter of 2018 added up to almost $880 billion, which is $40 billion more compared to the last quarter of 2017.

The Bank of Canada stated that ease in obtaining business credits was noticed, and the main factor behind this change is represented by the current price conditions. The high demand for credit is attributed to new business and small businesses that require convenient lending conditions. Lending conditions remained – and are going to remain – steady. Obtaining business loans is visibly easier compared to past years, which is another reason why people should add Canada on their list of potential start-up locations. Moreover, there are various supplier types where to choose from, ranging from domestic banks of all sizes to credit unions and Fintech companies. The economic activity of new firms is constantly tracked by the Bank of Canada and numbers show encouraging signs only.

Immigrant entrepreneurs and the Start-up Visa Program

People from all around the world can immigrate to Canada with the purpose of starting a business. Launching a start-up means that new jobs will be created, which is convenient both for the country and entrepreneurs. There are certain requirements that need to be met to be part of the Canadian Start-up Visa Program. The process takes between one year to one year and a half. Canada supports innovative entrepreneurs who want to launch competitive businesses. Immigrants need to apply for a business loan before moving to Canada because financial support can only be offered after obtaining permanent residence. This can be received only when providing active management proof of the new business within Canada.

The requirements involve a proficiency in English or French, which means any immigrant must take an approved language test and pass it with a Level 5 Canadian Language Benchmark. The Start-up Visa Program started in 2013 and around 2700 visas were granted each year. Numerous foreign start-up owners choose Canada because of the convenient way of obtaining a permanent visa. The only drawback with the process would be that entrepreneurs have to possess the amount of money required for getting started or the company must be selected by VCs, incubators or angel investors running in Canada.

Final thoughts

Launching a start-up in Canada has a series of benefits that cannot be ignored, but one must be thoroughly informed about the requirements and law of the country before engaging in the application process. The federal programs of the Canadian Government support leading-edge ideas, as long as all conditions are respected. If gathering all the needed information beforehand, starting a business in Canada should be an untroublesome, easy-to-manage process.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.