Doing Business in Canada

Presentation by:

Prashant Ajmera, B.Sc. LL.B. (India) ICSA (UK),

Canadian Citizen and NRI since 1988

Indian Law Office of Prashant Ajmera & Associates

(Ajmera Corporate Services Pvt. Ltd.) Date: 16th May 2015

Venue: AMA, Ahmedabad

Doing Business in Canada

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Introduction

Law Office of Prashant Ajmera & Associates

• Prashant Ajmera, B.SC. LL.B. (India) ICSA( UK)– Institute of Chartered Secretary and Administration– Bachelor of Law, Gujarat University – Bachelor of Science, Gujarat University – 22 yrs Experience in corporate law & international

trade– Member of Gujarat & International Bar Association– NRI and Canadian citizen since 1988

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Videsh Vidya Foundation – Our CSR initiative


Map of Canada

www.AjmeraLaw.comAjmera Corporate Services Pvt. Ltd.

Map of Canada (Major cities)


Doing business in Canada… Today’s Presentation • 4 ways to do business in Canada • Three legal forms • Taxation in Canada• Tax incentives • Investor program • Entrepreneur program • Start Up program for Innovation…


Doing business in Canada…

4 ways of doing business in Canada: •Open a Branch office – Marketing / Sales office • Start a New company or business in Canada•Take over an existing business in Canada•Joint Venture with Canadian company


Doing business in Canada...1. Open a Branch Office in Canada: • Incorporate an Indian company as a Canadian company;• Buy/rent office premises or a virtual office to receive

communication;• Open a bank account in Canada• Obtain necessary business operation licenses in Canada;• Hire local staff to run and manage business operation • Tax benefit as expenses of foreign operation can be

claimed in Indian tax return; • No transfer of employees from India to Canada;


2. Open/incorporate a NEW company or start a NEW business in Canada: (1/3) - Purchase or Acquire an EXISTING business - (WOS 100% or JV - % ): (1/3)

• Incorporate a company • Buy/Rent office premises;• Open a bank account in Canada;• Obtain necessary business operation licenses• No tax benefit in India as expenses of foreign

operation cannot be claimed in Indian tax return• May hire local staff or get key people from India

Doing business in Canada...


2. Open/incorporate a NEW company or start a new business: (2/3) Purchase or Acquire an EXISTING business - (WOS or JV): (2/3)Transfer of employees from India to Canada

Managerial level or Technical persons.

• There should be a relationship between the Indian company and the Canada company such as holding company, subsidiary company, associate company, etc.

• Must have a detailed business plan with 3 years of projection in Canada.

• Business in Canada should be same or related to the Indian business in most cases;

• Must be beneficial to the economy of Canada and job creation.



2. Open/incorporate a NEW company or start a new business: (WOS) (3/3) Purchase or Acquire an EXISTING business – (WOS or JV) : (3/3)

• For Transfer of employees from India to Canada – Managerial level or Technical persons.

• Must be working with the Indian company for at least 12 months in last 3 years.

• Must be at the Managerial level OR have specialized technical knowledge.

• Transfer can be on a temporary work permit basis and may convert to permanent residence at a later stage.




Three types of business entity:-

•Sole proprietor•Partnership •Company



Incorporation of company …..in Canada• Federal or provincial • Federal corporation can do business operation in any

province• Provincial corporation needs separate registration • Incorporation takes 1-2 weeks time • Premium process in three days • Numbered company or named company • Registered office and agent to receive communication • One director and one share holder • 25 % Canadian holding must for Federal corporation



Necessary IDs & Permits:

•Federal Tax Id •Provincial Tax id •GST & PST •Employer ID •Import Export ID •Building permits •Specific business permits


Doing business in Canada...Corporate Tax rate in Canada for 2014

Small Business

Manufacturing General Biz. income

Federal 11 15 15

Combine F & P

Newfoundland 15 20 29

PEI 15.5 31 31

Nova Scotia 14 31 31

New Brunswick 15.5 27 27

Quebec 19 26.9 26.9

Ontario 15.5 25 26.5

Manitoba 11 27 27

Saskatchewan 13 25 27

Alberta 14 25 25

BC 13.5 26 26

NWT 15 26.5 26.5

Nunavut 15 27 27

Yukon 13 17.5 30



• Personal Tax Rates in Canada

• Federal tax rates for 2014• 15% on the first $43,953 of taxable income, +• 22% on the next $43,954 of taxable income (on the

portion of taxable income over $43,953 up to $87,907), +• 26% on the next $48,363 of taxable income (on the

portion of taxable income over $87,907 up to $136,270), +

• 29% of taxable income over $136,270.• .



• Ontario - 5.05% on the first $39,723 of taxable income, +9.15% on the next $39,725, +11.16% on the next $429,552, + 13.16 % on the amount over $509,000

• Manitoba -10.8% on the first $31,000 of taxable income, +12.75% on the next $36,000, +17.4% on the amount over $67,000

• Saskatchewan -11% on the first $42,906 of taxable income, +13% on the next $79,683, +15% on the amount over $122,589

• Alberta -10% of taxable income• British Columbia - 5.06% on the first $37,568 of taxable income, +

7.7% on the next $37,570, +10.5% on the next $11,130, +12.29% on the next $18,486, +14.7% on the amount over $104,754



Tax incentives:-• Bigger the investment – Bigger Tax saving• Such as:-• R& D – IT, Pharma, Bio Tech etc…• Tax Holiday for Foreign Researchers and Specialists• Tax Credit for - Acquisition of Manufacturing & Processing Equipment• Tax Credit for Job Creation• Tax Credit to Promote Workforce Skills and Development• Tax Credit for Market Diversification for Manufacturing Companies• Investment Tax Credit (Federal)• Development of E-Business• Cultural Industry Tax Credits• Tax Credit for Multimedia Titles



Tax incentives:-• Creation of New Financial Services Corporations;• Technological Adaptation Services• Large investment in Canada • On-the-Job Training• Temporary Tax Credit to Foster the Modernization of the

Accommodation Offering


Doing business in Canada...Minimum wage

Province Date Amount Alberta 01-Sep-12 $9.75

British Columbia 01-May-12 $10.25

Manitoba 01-Oct-12 $10.25

New Brunswick 01-Apr-12 $10.00

Newfoundland and Labrador 01-Jul-10 $10.25

Northwest Territories 01-Apr-11 $10.00

Nova Scotia (see note 2) 01-Apr-14 $10.40

Nunavut 01-Jan-11 $11.00

Ontario 31-Mar-10 $11.00

Prince Edward Island 01-Apr-12 $10.00

Quebec 01-May-13 $10.35

Saskatchewan 01-Dec-12 $10.00

Yukon 01-Apr-13 $10.72



Business Investment for a businessman who wish to settle with family in Canada:

• Investor–No need to start any business – (Investment in GOVERNMENT SECURITIES)

• Entrepreneur– Start or Purchase or Partner

• Start UP–NEW IDEA & NEW Technology


Doing business in Canada...Investor program: ( Opening on 31st Aug. 2015)

• Most trusted and popular program since 1986. • Must have assets of 1.6 million CD$ = Rs. 8.8 crores.• Must have 2 years of experience of running and

managing business, profession or Sr. executive;• Must invest CD$ 800,000 in a government bond for 5

years at no interest. • 100% Loan available with interest of CD$ 220,000• Quota of 1750 files for this year –• No need to set up any business in Canada; • Can settle in anywhere in Canada – Fee education &

medical



Entrepreneur–Start or Purchase or Partner• 10 provinces and 2 Territories = 12 programs+ Fed. • Assets of 300,000 CD$ to 600,000 CD$• 2 years and more business experience in India• 25% and above ownership of business in India in some

province Executive can start • Investment in Canada 100,000 to 400,000 CD$• Security bond of 75,000 – 150,000 CD$ • Job creation 1-4 • Related to business in home country • Exploratory trip & Business plan



Start UP–NEW IDEA & NEW Technology • Must be a new business idea or new technology • 2750 applications per year – April 2013• 5 person per business proposal • Out Side Quebec • Language requirement - IELTS 5 band • 1 Year Post secondary education - country of study -

Completion is not necessary - good standing –• Online course and distance education is ok. • Minimum fund to establish in Canada;



Start Up–NEW IDEA & NEW Technology • From Business Incubators- acceptance or • From Angel Investor - 75,000 or • From VC - 200,000 CD$• Commitment certificate to be issued with Term sheet – identify 5 people

essential for new venture • Letter of Support - Commitment Certificate• Immigration to Canada with family for all founders New business in Canada • Applicant must have 10% and more • Other individual or company - can not hold more then 50% except

participating entity• Pear Review - Syndication - Substituted Evaluation •



Sectors most likely to looked favorably for Start Up visa:

• Information Technology • Pharmaceutical • Bio-Technology • Telecommunication



How to Establish:• Starting is challenge • Start with market research• Visit Canada for just exploration• People, cultures and consumer behavior• Invest in local office



Some tips to do business in Canada: • How to greet people in Canada• Business meetings in Canada• Official correspondence in Canada• Dealing with government departments• Introducing yourself• Jokes and funny talks are part of discussion



More tips……….: • Canadian are sometime very straight in saying NO…..• Canadian never jumped in to agreement in first meeting• Canadian decides on basis of research & data• Inviting people to home is not common• Liquor & Non-Veg food are common in business

reception but not in lunch• Attending calls during meetings is NOT common


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THANK YOU FOR YOUR TIME

Q & Awww.AjmeraLaw.comAjmera Corporate Services Pvt. Ltd.

Ajmera Corporate Services Pvt. Ltd. &

Indian Law Office of Prashant Ajmera & Associates

[email protected]

www.ajmeralaw.com

• + 91 98986 98184(India)

• + 1 514 697 1597 (Canada)

• + 1 212 461 0005 (USA)