Canada is an attractive destination for all Italian companies that want to invest in the North American market. There are two main ways to open an office for your Italian company in Canada that we recommend: the branch office and the subsidiary company but before we start looking at the possibilities let’s answer some questions:
1- Do I need to be a resident to open a business in Canada?
The law is different province by province but the short answer is NO you don’t need to be a resident to start a Canadian company. However, we strongly suggest you have a Canadian resident on your team. These are some reasons why: you need somebody to do the leg work on the ground; most of the banks require a Canadian resident to open and manage the bank account; you need a Canadian address in order to register new assets for the company.
2- Canada is a federal country, do I need to incorporate federally or provincially?
The answer depends on the scope of the company. The main difference between federal and provincial incorporation is that federal incorporation gives your business increased brand name protection and wider rights to carry on business throughout the entire country. If you incorporate provincially you can still operate everywhere in the country and outside the country but one day you may have a problem with a company with your same name in a different province.
3- Do I need a special license to operate a business in Canada?
According to your business, you may need a license to operate in Canada. The best resource to understand if you need a license is the Business and Licence permit website https://www.bizpal.ca/
Let’s go back to the possibilities. What are the main differences between a branch and a subsidiary?
A branch is connected to the parent organization and report to the main office in Italy.
A branch is created by the parent company to perform more or less the same business as the parent company but at a different location.
A subsidiary is a separate legal entity. This makes it easier for a subsidiary to conduct business in Canada and create local partnerships. A subsidiary enjoys a greater degree of flexibility because it can issue or transfer shares to third parties like investors, partners, employees, or venture capitalists. Since a subsidiary can be listed on the stock exchange, it can also issue public stocks or bonds.