Foreign companies have several structures to choose from when deciding to establish a presence in Canada. Among these, the branch office and the subsidiary are the most common, however, there is also the possibility of setting up representative/liaison offices, according to the Canadian law.
Compared to other countries, most of the times it is banks that set up liaison offices in Canada, which is why the Banking Law is the main legal document providing for the establishment of such form of doing business. Our Canadian company formation agents can explain the requirements for setting up a representative office.
Compared to the branch or the subsidiary, the liaison office does not allow a foreign company to carry out commercial activities in Canada; however, there are many companies and banks in foreign countries which set up representative offices here in order to have a contact point between the Canadian customers and the foreign company located overseas.
The Canadian liaison office is usually set up before the parent company decides to register a subsidiary or branch office here. The representative office will first prospect the market and even promote the services of the foreign company.
Foreign companies interested in setting up their presence on the local market can rely on our company registration advisors in Canada.
The Canadian law provides for the following types of liaison offices:
Our local consultants can offer information on the types of representative offices which can be set up in this country.
Even if starting a business in Canada implies filing several documents with Corporations Canada, the country’s Trade Registrar, in the case of a representative office the requirements are less strict. The parent company will be required to file information like:
If you operate in the banking industry and you want to set up a representative office in Canada for your business, you will need to comply with the local regulations concerning the incorporation of this entity.
In the list below, our consultants in company registration in Canada have highlighted some of the main aspects you should be aware of:
Foreign investors must prepare many documents, which are customarily asked when starting the process of company formation in Canada for a commercial company. In the list below, we invite you to discover some of the main documentation you must submit:
During the process of company registration in Canada, investors are required to present the audited financial statements of the foreign bank, from the previous financial year. The company must submit its balance sheet and the statement of income and expenses.
Please know that the numbers have to be presented in Canadian dollars. Along with these documents, investors must submit the decision to establish a representative office in Canada (signed by the board of directors of the foreign bank).
Once the entity becomes active, during its activity, various modifications can occur. When this happens, any of the changes regulated by the Canadian law have to be reported to the Canadian officials. This does not take into consideration only the liaison office, but the parent company as well.
Any changes regarding the person appointed as a representative must also be reported. The law states that the Canadian authorities (Office of the Superintendent of Financial Institutions) must be informed in a period of maximum 1 month from the appointment. The information has to be made in writing.
For other details concerning the list of documents that must be included in the application file, we invite you to address our consultants in company formation in Canada, who can represent you during this stage, as well as in other stages related to the registration/operation of the office.
As presented above, the liaison office is required to pay a yearly fee and this applies to each of the liaison offices operating in Canada, if this in the case. Beside this, the office is required to provide accurate information on the current number of employees.
From an accounting point of view, the representative office in Canada is legally required to submit the financial statements of the foreign bank (the audited version). The procedure must be conducted on a yearly basis and it must be done once the foreign bank issues its financial documents.
In the case in which the audited financial statements are not ready by the time when the representative office must submit the documentation in Canada, the unaudited version can be submitted (Article 9.(2)).
Please feel free to contact us if you are interested in starting a company in Canada.