How to Start a Business in Canada

Trying to become an entrepreneur or start a business in Canada can be somewhat daunting, especially if you’re not a citizen of the country. There are so many requirements and tips that you may become stuck learning if you don’t take an action quickly.

Also, taking an action without learning the necessary tips on how to start a business in Canada can be disastrous, since the majority of businesses close down in the first year. Ignorance of government policies, lack of required documents, and poor management are some top reasons why your Canadian business may fail.

In this article, I’ll try to ensure that your business doesn’t fail by providing you with a guide on how to start a business in Canada. From the requirements to the steps required to get started as a foreigner, this article is all you need to get started as a new entrepreneur in Canada.

Requirements to Start a Business in Canada

Like in every other country in the world, you can’t simply show up in Canada with a relatively unknown business and start operating like every other legal business. There are some requirements you must meet to be licensed to operate a legal business within the country.

These requirements differ depending on which part of Canada you live in and your citizenship status. It doesn’t matter what kind of business you’re starting, if you’re relocating to Canada, you must apply for a business immigrant permit. However, that would be unnecessary if you’re planning to run the business from outside the country.

Also Read: how you could avoid business failure

As hinted earlier, the permits you’ll be required to have to operate in Canada will differ based on some factors. For most people, however, here are all they’ll be required to have to start a small or medium business in Canada without too many problems from the government.

1. A Business Number

One of the primary requirements for running a business in Canada is having a business number. The business number is a unique nine-digit number that the government uses to identify your business and process your tax filings.

Note that a business number is different from the Business Identification Number that you get when starting a small business in Ontario. The Business Number isn’t only required for Ontarians, you’ll need it to operate a business anywhere in Canada.

You can register for a business number online, via mail, over the phone, or in person. To do that, however, you’ll need to provide some personal information, your business type, a physical address, a mailing address, a social insurance number, and some other crucial information. Note that it’s usually more tasking if you’re not a citizen of the country.

2. Export Declaration

The export declaration is only necessary if you think your business will ever need to export goods from Canada to other countries apart from the United States. The export declaration is not a document you get once and forget about it; it’s something that you must do each time you’re exporting goods.

It’s crucial to note that Canadians may not be required to register a business that they run under their legal name without processing exports. Also, you can use the BizPal service by the Canadian government to determine what permits you need to run a business legally in the country. You might need to contact a legal agency because there are important legal questions you need to ask before starting a business.

Also, different provinces might have their requirements for starting a business in Canada. If you’re starting a small business in Ontario for example, you may have to get the Ontario Business Identification Number, depending on the industry of your business and its magnitude.

Starting a Business in Canada for Foreigners

Starting a business in Canada without being a citizen is significantly more complicated than starting it as a citizen and resident of the country. Before continuing, it’s crucial to learn that there are different ways to start a business in Canada without being a resident, and the difficulty level will depend on what kind of business you’re starting.

Expanding an existing business to Canada

If you’re only expanding an existing business into Canada without moving to the country, you don’t have to come to Canada as a business immigrant. You only need to have an adult individual who is a resident of the country to represent your business and a physical office.

It’s important to note that the representative must reside in the province where you intend to do business, and of course, the business must also be situated there too. If you’re looking to expand to multiple provinces in Canada, you’ll have to do the same for each province too.

Starting a Business in Canada without Immigrating

It’s possible to also start a business in Canada without having an existing business you’re looking to expand. The process will only be a bit more complicated than when you have an existing business. Before you move on with your business idea, it’s crucial to note that some provinces don’t let you start a business without permanent residency status.

The recommended way to go about starting your business is by partnering with someone else who is already a citizen of Canada. According to the dictates of starting a small business in Ontario, 25% of the directors must reside in Canada, at least.

Starting a Business in Canada as an Immigrant

If you’re looking to immigrate to Canada to start a business, consider applying for a business immigrant visa. You can either use the start-up visa program or the self-employed entrepreneur visa program when immigrating to the country to start a business.

For most small business owners, the start-up visa program is the best option. Consider learning about the requirements to get this visa, try acquiring it, and fly into Canada to start your new business as a Canadian immigrant.

How to Start a Business in Ontario

Starting a small business in Ontario is as easy as registering for a business identification number online and following all the rules. There aren’t too many differences between starting a business here and starting it anywhere else in Canada.

Here are some tips on how to start a business in Canada, Ontario to be precise.

1. Come up with a great business idea

Ontario is one of the most popular provinces in Canada, which means there isn’t a lot of room for new businesses to spring up. If you don’t want your business to die in a matter of years, you’ll have to brainstorm business ideas that’ll remain sustainable over the long term.

Before starting a new business in Ontario, it’s crucial to study the area where you’re starting the business to see if they’re too many competitors. While competition is fine for a business, starting a burger outlet right next to a McDonald’s is a great way to close down your business in the first year.

2. Choose a great name for your business

Unless you’re a citizen creating a small business, you’ll almost always have to choose a unique name before registering your business. There are many guidelines for naming a business in Ontario, and you should consider checking them out before choosing a name.

Some of the most important requirements include not confusing with any existing business names or trademarks. It shouldn’t also contain any prohibited terms and should be distinctive. Even with those requirements, coming up with a name should be one of the easiest steps in starting a business.

3. Get a Business License

After choosing a name, you may have to source for financing, after which you’ll register your business. Registration is usually optional and many small businesses can usually do without it. You should consider contacting a business attorney before assuming that your business doesn’t require any form of licensing or registration yet.

You can also enter your province and industry into BizPal to check what kind of licenses you’ll need to run your business. If you also make a gross income exceeding $30,000, you’ll need to register for the goods and services tax and the harmonized sales tax.

Getting business insurance might be optional or required, depending on your specific industry. Try to ask as many questions as possible about your business to ensure that you’re doing everything correctly as you should be doing.

FAQs

Can a Non-Citizen Start a Business in Canada?

It’s possible to start a business in Canada as a foreigner, but you’ll need more permits than the average Canadian citizen. Depending on the kind of business you intend to run, you may have to get a business immigrant visa. Afterward, the required permits will depend on what business you intend to operate.

How Much Does It Cost to Start a Business in Canada?

The amount you’ll need to start a business depends on what kind of business you’re starting and where you currently reside. The average small business has a startup cost of around $5,000 to $10,000, and the figure is even higher if you’re going into certain industries.

Is Starting a Business in Canada Easy?

Starting a business anywhere is not easy. However, compared to most other countries around the world, starting a small business in Canada is a piece of cake, thanks to many interventions by the government to support business, including foreign investors.

Conclusion

Starting a business in Canada is not very different from starting it anywhere in the world; you’ll need to get some permits from the government, but nothing much more than that. If you reside primarily in the country, you may not need any identification numbers or licenses from the government until you start to scale.

If you’re a foreigner looking to learn how to start a business in Canada, however, the story is a bit different. The steps you’ll need to follow will depend on whether you’re planning to operate the business from within Canada. Either way, this article covers how to start a business in Canada in detail.

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