The first issue facing foreigners setting up a business in Canada is the type of entity which should be used to operate the business. Among the most commonly used are:

• Canadian corporations

• Unlimited liability companies

• Branch of foreign corporation

• Various forms of partnerships

• Co-tenancies and joint ventures

• Agency and distribution arrangements

• Franchise arrangements

The choice of form of business organization is dependent upon a number of factors. The nature of the business and taxation issues which may revolve around the desirability to consolidate income for tax purposes are two important criteria. Availability of incentive or assistance programs may also impact the decision. Foreign investors should obtain professional legal and accounting advice to determine the most advantageous method of conducting business.


Most businesses in Canada are carried on by corporations. A corporation is a distinct legal entity which has perpetual existence and is afforded the same right to own property and the right to conduct business as is enjoyed by a natural person....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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