As the world’s ninth largest economy and a member of the G7, Canada offers a stable, business-friendly environment with strong institutions and a skilled workforce. The key sectors driving growth include technology, natural resources, financial services, and advanced manufacturing, creating opportunities for businesses across diverse industries. The government provides significant support for innovation, R&D, and foreign investment through various incentive programs.
Unlock growth opportunities in Canada with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating Canada’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in Canada, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR Structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with Canada’s employment and tax laws, helping you scale confidently and compliantly.
A subsidiary is a separate Canadian corporation that is wholly or partially owned by a foreign parent company. This structure provides complete legal separation between the parent and subsidiary, offering maximum liability protection.
A branch office allows a foreign corporation to conduct business in Canada without creating a separate legal entity. The branch operates as an extension of the parent company and must register in each province where it operates.
The most common business structure for international expansion, offering limited liability protection and tax advantages. Corporations can be incorporated federally (under the Canada Business Corporations Act) or provincially. A corporation is managed by directors and officers, with shareholders owning the company through shares.
Same director requirements as a regular corporation, with at least 25% Canadian resident directors for federal incorporation.
A branch office must appoint a chief agent who is a Canadian resident to represent the foreign corporation in Canada.
For federal incorporation, at least 25% of directors must be Canadian residents. For provincial incorporation, requirements vary by province. Some provinces require a majority of Canadian resident directors.
In Canada, bank account setup can be initiated during the incorporation process but typically requires the corporation to be fully registered before becoming operational.
Bank Account Setup in Canada: What’s Possible and When
Before Incorporation:
After Incorporation:
Note: Documentation must be prepared by the filing due date of the tax return (6 months after fiscal year-end) but does not need to be submitted unless requested. For calendar year entities, this is typically June 30 of the following year.
Canadian banks have robust know-your-customer (KYC) requirements and may require in-person meetings or video calls for account opening. The process typically takes 1-2 weeks once all documentation is provided.
Required documents include the certificate of incorporation, business number from CRA, directors’ identification, corporate resolution authorizing account opening, and beneficial ownership information.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in Canada is primarily governed by the following laws on the federal level:
Canadian employment agreements can be written or verbal, and both are legally binding and enforceable, although written agreements are usually preferred for ease of enforcement.
Some of the standard details mentioned in the written contract include:
The different types of employment relationships are:
Full-Time Employment
Also known as permanent employment or indefinite employment, these positions have no predetermined end date and provide job security and stability. Permanent employees must work at least 40 hours per week and are entitled to full benefits and statutory protections under employment standards legislation.
Fixed-Term Employment
Fixed-term employment contracts have a specific end date and are used for temporary projects, seasonal work, or specific assignments. In most provinces, repeated short-term contracts may be deemed permanent employment.
In Canada, a probationary period typically lasts up to 12 months, depending on the length of employment.
The regular working hours in Canada are eight hours a day and 40 hours a week. This varies by province and some provinces have 44-hour work weeks as the standard.
Overtime
Any hours worked beyond the stipulated working hours are considered overtime. Daily overtime may also apply in some provinces for work beyond 8 hours per day.
Notice periods vary by province and length of service, typically ranging from 1 week to 8 weeks for statutory minimums.
Severance pay is required for:
Common law reasonable notice may exceed statutory minimums, particularly for long-service employees or those in senior positions.
Foreign nationals can live and work in Canada by securing a work and residence visa. With a valid job offer and employer sponsorship, individuals with the right skills or qualifications may be eligible for temporary or long-term work authorization.
Work Visa & Permit Options in Canada
1. Temporary Foreign Worker Program (TFWP)
For employers to hire foreign workers when qualified Canadians are not available.
2. International Mobility Program (IMP)
For workers whose employment benefits Canada’s economic, social, cultural, or competitive interests.
3. Global Talent Stream
Fast-track program for highly skilled workers and unique talents.
Employers must be pre-approved and adhere to the Labour Market Benefits Plan (LMBP).
4. Start-up Visa Program
For entrepreneurs with innovative business ideas supported by designated organizations.
5. Express Entry System
For skilled workers seeking permanent residence through:
Key Notes:
Work permit eligibility depends on job role, employer compliance, and applicable stream-specific criteria. Many permits can transition to permanent residence pathways.
Employees in Canada are entitled to:
Female employees receive up to 15 weeks of maternity leave.
Parental leaves range from 35 to 61 weeks for both biological and adoptive parents.
Sick leave provisions vary significantly by province, and federally regulated employees receive up to 10 days of paid sick leave per year.
The following statutory national holidays are observed in Canada:
Additionally, Canada observes provincial holidays.
Payroll frequency in Canada is usually weekly, biweekly, semi-monthly, or monthly.
The law does not require employers to pay a mandatory bonus or the 13th month salary, but some employers give a bonus to their employees.
Employees in Canada are required to pay Social Security taxes, which contribute to Social Security benefits.
The mandatory benefits in Canada include:
Accounting standards must adhere to:
Corporations in Canada must file annual returns and financial statements:
Statutory audit requirements vary by province and corporation type:
Federal Corporations (CBCA):
Provincial Requirements:
The corporate tax in Canada is a two-tier system and is:
Canada has GST/HST depending on the province or territory, which typically ranges from 5% and 13% to 15%, respectively.
Canada follows OECD Transfer Pricing Guidelines:
Canada has implemented CbC reporting requirements:
Transfer pricing documentation requirements:
Master File
Local File
Deadline: The Master File and Local File must be prepared and available by the filing due date of the corporate income tax return (typically 6 months after fiscal year-end). These documents are not required to be submitted unless requested by the Canada Revenue Agency (CRA).
The Personal Information Protection and Electronic Documents Act (PIPEDA) and GDPR aim to protect individuals’ privacy and personal data.
Canada’s AML framework is governed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA):
Obligated entities: Financial institutions, casinos, real estate professionals, accountants, legal counsel, and money service businesses.
Key requirements:
FINTRAC: Canada’s financial intelligence unit oversees compliance and receives reports
Penalties: Administrative monetary penalties up to $5 million for entities.
Reasons you should setup legal entity in Canada:
Cerity Global ensures your business expansion in Canada is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your Canada business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in Canada.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location.
To discuss your needs and how we can help you achieve a compliant and efficient expansion.