I was wondering what is needed to open a branch of my USA company in Canada? None. Well and if I can send an USA or

Hi, welcome to Just Answer and thank you for using our services. I am Cousell Creed. You will appreciate that a canadian branch office (or a satellite company), of your company is really an extension your company here in Canada. Your Canadian branch office:

1. although it will need to complete the same activities in Canada, as its US parent company, it must obtain its licenses from the Canadian authorities;
2. it will have no separate legal personality from the US company. The US company will be entirely responsible for the Canadian branch’s contractual obligations and its liabilities;
3. this branch will be taxed on the income derived in Canada;
4. it will bear the same name as the parent company;
5. the branch must appoint a legal representative in Canada to receive various court documents and to deal with the canadian (federal, provincial and municipal) agencies and authorities.

How to register a branch office in Canada

A foreign company starting a business in Canada and choosing the branch office to do that must register this structure with the local authorities in the province it will operate. If the parent company wants to operate in several provinces, it needs to register the branch in each Canadian territory. However, the registration requirements for a branch office are simpler than those for a subsidiary company.

When you want to open a branch in Canada you need to prepare and file the following documents: information about the parent company (along with its certificate of incorporation); the incorporation documents of the branch office to be established in Canada; a statutory declaration containing the names of the branch directors and secretaries; and the information about the local representatives. You should be aware that you are legally required to appoint local agents to carry out the Canadian branch registration process who will deal with the incorporation process, with the Trade Register and the tax authorities. It will also be the registered address for services.

Further, the parent company is also required to provide specific information about it, such as: the country of origin of the parent company; the registration number in the US; the legal form and the registered address; the place of registration of the branch office; and the registration of the branch office.

Requirements for branch offices operating in Canada

All branch offices of foreign companies operating in Canada must make sure all the official documents issued by them show the following: information about the parent company, such its address in the foreign country; the name of the parent company must be present on all documents issued by the Canadian branch; the registration number assigned by the Canadian authorities to the branch office; the registered address of the branch office in the Canadian province. Additionally, at the head office of the Canadian branch, the representatives must also display the name of the parent company. Branches are also required to obtain Goods and SErvices Tax (GST) numbers in Canada.

Taxation of branches in Canada

From a taxation point of view, the branch will be levied by the Canadian tax authorities with the profit tax on the income generated in this country. Also, known as the branch profit tax, this levy implies the withholding tax paid by a subsidiary to the non-resident parent company as dividends. The following rates apply in respect to the taxation of branches in Canada:

• a 25% rate on the net income the non-resident company earns through the branch in Canada, provided that the income is not reinvested in the branch;
• under a double tax treaty, the branch profit tax can be reduced even at 5%;
• under some double tax agreements, a foreign company can be exempt from taxes on the first 500,000 CAD from the branch profit tax;
• other withholding rates applicable under Canadian double tax treaties are 10% and 15%.

In respect to the profits reinvested by the parent company in the Canadian branch, these can be exempt from taxation and is usually determined based on the value of the properties employed for the branch’s activities.

Other important aspects to consider related to the taxation of branch offices in Canada is that the profit tax does not apply to businesses in the communications, iron ore mining and transportation industries. Also, non-resident insurance companies benefit from special tax regulations.

AS far as your agent is eligible for a work vise, I suggest that, for the reasons of immediacy and efficiency, you obtain a tourist visa for him for up to six months, which can be extended for another six months. Once your branch is settled there and starts to operate, you will have to decide which of your US employees you want living and working permanently in CAnada. THis person may be eligible for a work visa, if his employer (your branch) completes the Labour Market Impact Assessment that will show that there is no one else available in CAnada who could do his job here.

HI, again. Do you have more questions for me?

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