Types of companies in Canada
- Limited liability corporation -LLC
- Responsibility
- Minimum capital
- Min. shareholders
- Recommended for
- Limited liability corporation -LLC
- Limited
- No min.
- 2
- SMB
- Corporation
- Limited
- No min.
- 1
- Big companies
- Soleproprietorship
- Unlimited
- No min.
- 1
- Sole holder
- Partnership
- Unlimited
- No min.
- 2
- SMB
- Limitedpartnership
- Limited
- No min.
- 1
- Big companies
Corporate tax rate in Canada
In Canada, the corporate tax is divided into two parts:
- A federal part applying two different rates depending on the company’s size. For medium and big companies the rate is 38%. Yet this rate benefits from two abatements: one of 10% and another of 13%. So the corporate tax rate is reduced to 15%. For small companies*, this rate was fixed at 9% in 2019,
- A regional part which distinguishes small and medium/big businesses. For small business, an inferior rate is applied: 2 to 4% depending on regions. For medium and big businesses, a superior rate is applied: 11.5 to 16% depending on the region.
Globally, the corporate tax rate is:
- 5-31% for medium and big businesses,
- 11-13% for small businesses.
*Are considered as small businesses: companies with 1-50 employees, having less than 25 million Canadian Dollars in assets (16.5 million euros) and whose capital is not possessed at 25% or more by a bigger company.
Questions
Why should I incorporate my company in Canada?
• The American market is very close to the Canadian one and doesn’t stop developing commercial exchanges with the EU.
• The country has numerous energy and mineral resources. They are very diversified which makes Canada the fifth biggest producer of petroleum and gas in the world.
• The banking sector is very stable.
Which difficulties can be encountered in Canada?
- The country remains reliant on the US economy and their energy prices.
- Investments in research and development remain too low.
- Households are indebted at 170% of their disposable income, especially seeing as real estate prices are very high.
- The country loses competitiveness in the manufacture sector because of its low productivity.
- Energy exportations are weakened because of the lack of deliveries towards the US.
Which are the cultural specificities of the world of work in Canada?
- The atmosphere at work is not very formal.
- The hierarchy is not very pronounced.
- An oral agreement is as important as a written one.
- Punctuality is very important.
- To greet, it is recommended to shake hands firmly, if it is weak it is perceived as a lack of self-confidence.
- Eye-contact is important during a conversation, otherwise it is impolite.
