Canada is a preferred destination for foreign enterpriser who can set various types of companies here. The corporation is the most popular type of structure used here as it resembles the limited liability company in European countries. However, there is also a large portion of investors interested in setting up holding companies.
Canada is one of the countries where the concept of holding company is accepted. The taxation system allows for the establishment of holding companies under very advantageous conditions in Canada. Our company formation consultants in Canada can offer information about the holding company.
| Quick Facts | |
|---|---|
| Legal entities used | Corporation |
|
Incorporation method |
The standard registration process applicable to Canadian businesses |
|
Incorporation time |
Between 5 and 30 days, depending on the Canadian province |
| Advantages |
– asset protection, – tax advantages, – capital gains exemptions, – estate planning, – reduced exposure to risk |
| Precautions |
– incorporation costs can be high, – operating costs can be high, – complex administrative procedures |
| Shareholding structure |
The holding company owns at least 50% of the shares of another company. |
| Minimum Capital |
no capital requirements |
| Taxation | Corporate taxes are applied, but there are certain tax exemptions (on capital gains, the small business deduction and others) |
| Control | The holding controls the management of its subsidiaries, but it does not engage in their activities. |
| Accounting and Reporting |
There is an obligation to submit yearly accounting files with the tax authorities. |
| Number of double taxation treaties | 94 |
What is a Canadian holding company?
The holding company is a usual entity which is created for the purpose of gathering various assets such as real estate, shares, assets or even other companies under one umbrella, or better said under another company which has control over these.
There are several types of holding companies which can be registered in Canada, among which the most popular one is the investment holding. Also, Corporations Canada recognizes holding companies.
How to set up a holding company in Canada
The registration process of a holding company is no different from that of starting a company in Canada. The first step is to choose whether the company will be registered at a federal or regional level, followed by the company name reservation with the Trade Register. However, instead of a name, the Canadian holding can be issued a unique number.
Our Canadian company formation agents can assist with the registration of a holding company.
You can read about the main steps of setting up a holding company in Canada in the scheme below:
Advantages of holding companies in Canada
There are various advantages to holding company registered in Canada. These benefits depend on how the company is registered: as an investment holding or as an operating holding.
Those who set up holding companies in Canada will mainly benefit from:
- enhanced protection against creditors;
- capital gains tax exemption which can go up to 750,000 dollars;
- dividend tax exemptions.
The Canadian holding company can also be an excellent estate planning tool. It can also register for VAT in Canada.
We invite you to watch our video on the Canadian holding company:
If you want to register a holding company and need assistance, please feel free to contact our company incorporation advisors in Canada.