Grow your business in Canada: The land of maple and momentum
Canada is one of the most business-friendly countries in the world, ranking 23rd out of 190 countries—and second in North America—for ease of doing business.
This nation has a stable economy, high living standards, and a highly skilled workforce. Low corporate tax rates, government incentives, and trade agreements such as the USMCA (United States-Mexico-Canada Agreement) make it an attractive option for international companies.
However, navigating the company registration process in Canada can be complex. This guide will walk you through each step and show how an employer of record (EOR) could simplify your growth here.
The business benefits of registering your company in Canada
Canada offers several advantages for businesses looking to enter a stable and competitive market.
Here are key reasons they choose to expand into Canada:
- Access to North American markets: Canada’s trade agreements, including USMCA, allow seamless trade with the U.S. and Mexico.
- Competitive tax system: The federal corporate tax rate is 15%, with additional provincial rates depending on location.
- Skilled workforce: Canada has a highly educated talent pool, with strengths in technology, healthcare, and finance.
- Government incentives: Foreign investors can access tax credits, grants, and funding programs to support innovation and growth.
- Ease of doing business: Canada consistently ranks high due to its transparent legal and regulatory environment.
While these advantages are compelling, companies must choose whether to establish a local entity or opt for an EOR model to simplify operations.
What is the difference between standard company registration and expanding through an EOR?
How you expand into Canada depends on your business goals, timeline, and resources. Some companies establish a legal entity for full control, while others opt for an EOR to reduce complexity and move faster.
Here’s a comparison:
Aspect | Company Registration | Employer of Record (EOR) |
Purpose | Establish a legal entity for long-term operations | Test new markets or manage remote teams without establishing a legal entity |
Control | Full control over operations | Limited control; EOR handles HR and administrative functions |
Cost | High initial investment (registration, legal fees, etc.) | Predictable, bundled service fee |
Compliance | Full responsibility for legal and tax compliance | EOR ensures compliance with Canadian laws and regulations |
Setup Time | Several weeks to months | A few days to weeks |
Scalability | Complex and time-consuming | Quick and flexible workforce adjustments |
If you want to build your own internal systems for payroll or access certain R&D credits, you may need to register a company in Canada. If not, partnering with an EOR can be a low-risk, efficient alternative.
How an EOR simplifies Canada company registration
Setting up a business in Canada can be lengthy and costly. However, if you partner with an EOR like Multiplier, you can skip this process. An EOR will hire and manage payroll for your Canadian workers on your behalf.
Here is how that helps:
- Faster market entry: You begin operations in weeks instead of waiting months for entity setup.
- Built-in compliance: EOR ensures adherence to Canadian labor laws, tax regulations, and employment standards, lowering your risk significantly.
- Lower upfront costs: Avoid entity formation and legal setup expenses.
- Streamlined payroll and benefits: It’s easier to handle compensation, benefits, and tax filings through a single provider.
- Focus on growth: The EOR will manage HR, global payroll, and compliance, so your teams don’t have to.
Now that we’ve covered the EOR model, let’s look at what’s required if you choose to register a company in Canada through traditional means.
A step-by-step guide to registering a company in Canada
For businesses opting for traditional company registration, the following steps must be completed:
Step 1: Choose a business structure
Select a structure based on your business goals, liability preferences, and tax considerations. Common options include:
- Sole Proprietorship: A simple structure for individuals with personal liability.
- Partnership: Owned by two or more individuals who share profits and liabilities.
- Corporation: A separate legal entity with liability protection, preferred for larger businesses.
Visit the Government of Canada’s business structure guide for more details on business structure.
Step 2: Register your business name
Ensure your chosen name is unique and complies with provincial and federal regulations:
- Name availability search: Conduct a name search through NUANS (Newly Upgraded Automated Name Search).
- Trademark check: Verify name trademarks through the Canadian Intellectual Property Office (CIPO).
Step 3: Register with federal and provincial authorities
Depending on where you operate, registration may be required at federal or provincial levels. You can either choose to go for federal incorporation through Corporations Canada for nationwide operations or provincial incorporation if operating in a specific province like Ontario, British Columbia, or Quebec.
Step 4: Obtain a Business Number (BN) and tax accounts
Businesses must obtain a BN from the Canada Revenue Agency (CRA) for tax purposes:
- GST/HST registration: Required if annual revenue exceeds $30,000 CAD.
- Payroll accounts: These are needed if hiring employees in Canada.
Step 5: Apply for necessary permits and licenses
Some industries require additional licensing:
- Local business licenses: Issued by municipalities.
- Industry-specific permits: Required for finance, healthcare, or food-related businesses.
You can check permit requirements on BizPal, a service provided by the federal, provincial, and municipal governments.
While Canada has a relatively straightforward business registration process, navigating legal, financial, and compliance requirements is an ongoing requirement. For foreign businesses, these steps can be time-consuming and resource-intensive.
To move faster, many companies partner with an Employer of Record (EOR). An EOR allows businesses to hire talent in Canada, manage payroll, and stay compliant without establishing a local legal entity. It also reduces many expenses associated with setup and ongoing adherence to employment laws.
The real cost of registering a business in Canada
Cost Category | Company Registration (CAD) | EOR with Multiplier (CAD) |
Setup Fees | $200–$300 CAD (plus optional legal fees if using third-party services) | $0 (covered by EOR) |
Legal Documentation | $500–$2,000 | Included |
Payroll & Compliance | $300–$500/month | Included |
Ongoing Maintenance | $1,000/year (including legal or consulting fees) | Included |
Time Investment | 3–6 months (including operational setup for payroll etc.) | 2–4 weeks |
Note: The facts and figures in this article are subject to change. We recommend consulting a local expert before making any decisions. You can also reach out to our team. They can tailor a precise and up-to-date comparison based on your business vertical and needs.
Take the stress out of your Canada expansion with Multiplier
Expanding into Canada can be complex, but Multiplier’s EOR solutions provide a hassle-free, compliant, and cost-efficient alternative.
Why choose Multiplier?
- Local hiring expertise: Easily onboard talent in Canada.
- Effortless payroll management: Ensure compliance with Canadian labor laws.
- Comprehensive HR solutions: Manage employee benefits and time off seamlessly.
- Regulatory compliance assurance: Navigate Canadian employment regulations with expert guidance.
- Attractive benefits packages: Offer competitive, localized benefits.
Book a demo today and discover how Multiplier’s EOR services can help you expand into Canada without the stress of company registration!
