Expanding business to Canada has become a popular option for many businesses. Those with successfully established businesses in their ‘home’ country may look to Canada as a region for their expansion plans based on a number of factors. If you are a business based in the US you may also ask the question, can a US company do business in Canada?
Canada has become a popular place to hire full-time employees or contingent workers for businesses around the globe. With CXC’s services, you can find, engage and pay top talent in Canada. CXC makes hiring easy and fast, alleviating the need for you to setup a legal entity. We know the local laws and tax requirements and ensure all engagements are in compliance. Hire rapidly, anywhere with CXC.
The fact that Canada’s main language is English, and it’s an English-speaking country, makes it an attractive option for overseas expansion.
When it comes to setting up business and engaging workers, as with any other country, Canada also has its own unique set of business requirements that you should be aware of. Adherence to employment and taxation structures, knowledge of market demographics, and regional economic differences all play an important role to ensuring expanding business to Canada is done compliantly and successfully.
Expanding business to Canada
There are a few ways to go about expanding business to Canada. We’ve laid out a few of these below.
New branch office
One potential way of expanding business to Canada is to open a physical office there, as it if was a branch office, like other branch offices you may have in other states. In this scenario, the new branch office would be part of the same business entity. The main difference is that it would be in a different location and would be on Canadian soil.
Another alternative for expanding business to Canada is to set up a subsidiary company. The subsidiary company would be considered a separate entity from the parent company. Using this option may simplify things in terms of tax, and protection of assets.
Acquiring another company that is already existing in Canada is another way of expanding business to Canada. Acquiring an existing company may give you access to systems and markets already established. CXC has assisted companies in the past with mergers and acquisitions and converting full time staff to contractors. Retaining staff during mergers and acquisitions can be challenging. Read our case study to see how CXC assisted three global companies to transition their key staff while enabling continued productivity and growth during a merger.
Whatever the solution you decide on, partnering with specialists in all aspects of the business, but specifically in human resources, finance and compliance is essential.
Professional consultants who are specialists in global expansion and experienced with expanding into Canada, will ensure you minimize your risk and adherence to local laws.
Can a US company do business in Canada?
For a US business looking to do business in Canada, it is much like opening a business in another state. Just as you would for opening a new branch, you will need to check each province and the legislation that governs branch operations.
Things to research and find out more about would include:
- local zoning for potential office space,
- employment regulation
- national tax
- provincial tax
Consider your business requirements and strategy to determine which province is going to suit your business the best. Tax rates do vary between provinces, as they do in the US. A province with a lower tax rate or no tax may be a more cost-effective option.
A global PEO (Professional Employment Organization) takes care of all necessities involved in compliantly engaging and managing your workforce in Canada. CXC partners businesses to provide global solutions in over 100 countries. CXC manages the whole process from the point the talent is identified, to being vetted and onboarded, with right to work checks in place, all in keeping with local Canada in-country laws.
The benefit of working with a global peo is that you have a compliant centralized solution for ongoing management, including time collection, invoicing and payroll. Currency conversion is managed so that workers are paid locally in the currency where they are performing the work, while the businesses received a single invoice to pay in their local currency.
If your company does not have a registered business in Canada, the local government has no legal channels to pursue for any claims brought by a worker. Your local in-country partner will carry full exposure to worker claims. However, Governments can restrict your future rights and privileges and limit any banking and payments flowing through their banks.
Many companies who represent IPEO or GEO are utilizing staffing firms, accountants, legal and payroll companies to onboard and pay workers but with this comes increase cost for service, banking, set up fees and deposits that may not be fully transparent in pricing and fee structures.
When expanding business to Canada, it’s imperative to be in compliance with local laws. A global PEO or EoR (Employer of Record) will enable compliant global worker engagement, global worker classification, global worker payroll and ongoing workforce management. Ensure your workers are paid on time wherever they are.
CXC is a global HR outsourcing organization with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks.