Canadais a preferred destination for foreign enterpriser who can set various types of companies here. The corporation is the most popular type of structure used here as it resembles thelimited liability companyin European countries. However, there is also a large portion of investors interested insetting up holding companies.
Canadais one of the countries where the concept ofholding companyis accepted. The taxation system allows for theestablishment of holding companiesunder very advantageous conditionsin Canada. Ourcompany formation consultants in Canadacan offer information about theholding company.
| Quick Facts | |
|---|---|
| Legal entities used | Corporation |
Incorporation method | The standard registration process applicable to Canadian businesses |
Incorporation time | Between 5 and 30 days, depending on the Canadian province |
| Advantages | – asset protection, – tax advantages, – capital gains exemptions, – estate planning, – reduced exposure to risk |
| Precautions | – incorporation costs can be high, – operating costs can be high, – complex administrative procedures |
| Shareholding structure | The holding company owns at least 50% of the shares of another company. |
| Minimum Capital | no capital requirements |
| Taxation | Corporate taxes are applied, but there are certain tax exemptions (on capital gains, the small business deduction and others) |
| Control | The holding controls the management of its subsidiaries, but it does not engage in their activities. |
| Accounting and Reporting | There is an obligation to submit yearly accounting files with the tax authorities. |
| Number of double taxation treaties | 94 |
Table of Contents
What is a Canadian holding company?
Theholding companyis a usual entity which is created for the purpose of gathering various assets such as real estate, shares, assets or even other companies under one umbrella, or better said under another company which has control over these.
There are severaltypes of holding companieswhich can be registeredin Canada, among which the most popular one is the investment holding. Also,Corporations Canadarecognizesholding companies.
How to set up a holding company in Canada
Theregistration process of a holding companyis no different from that ofstarting a company in Canada. The first step is to choose whether the company will be registered at a federal or regional level, followed by the company name reservation with the Trade Register. However, instead of a name, theCanadian holdingcan be issued a unique number.
OurCanadian company formation agentscan assist with theregistration of a holding company.
You canread about themain steps of setting up a holding company in Canadain the scheme below:
Advantages of holding companies in Canada
There are various advantages toholdingcompany registered in Canada. These benefits depend on how the company is registered: as aninvestment holdingor as anoperating holding.
Those whoset up holding companies in Canadawill mainly benefit from:
- enhanced protection against creditors;
- capital gains tax exemption which can go up to 750,000 dollars;
- dividend tax exemptions.
TheCanadian holding companycan also be an excellent estate planning tool. It can alsoregister for VAT in Canada.
We invite you to watch our video on theCanadian holding company:
If you want toregister a holding companyand need assistance, please feel free tocontact our company incorporation advisors in Canada.
By canadacompanyformation.comOn
