Foreign Residents may have Reporting Obligations
If you are a non-Canadian and you are establishing a new Canadian business, you must file a notification to the Canadian government under the Investment Canada Act.
WHO MUST FILE
A “non-Canadian” is:
1. any individual who is not a Canadian citizen or permanent resident; or
2. any entity (e.g., a corporation) that is not controlled or beneficially owned by Canadians.
WHEN TO FILE
A “new Canadian business” is established at the time at which it becomes a “Canadian business”, meaning a business (i.e., capable of generating revenue and carried on in anticipation of profit) that has all three of the following:
1. a business location in Canada;
2. at least one employee (or self-employed) located in Canada; and
3. assets located in Canada used in carrying on the business.
A notification must be filed each and every time a non-Canadian establishes a new Canadian business. There is no investment amount threshold for notification.
The notification must be filed any time prior to or within 30 days of the new Canadian business being established.
HOW TO FILE
Option 1: You may personally file the notification to Innovation, Science and Economic Development Canada on the prescribed form. Visit the government’s website or contact the Investment Review Division officials directly at +1 (343) 391-1887 for more information. Please note there are special filing requirements for investments in cultural activities.
Option 2: Ink LLP can assist in the preparation and filing of the notification on your behalf. Please contact us for more information.
ACQUIRING CONTROL OF A CANADIAN BUSINESS
On a different but related note, non-Canadians proposing to acquire control of a Canadian business are also required to file notifications. Such investments may also be subject to Canadian government review and approval. Please contact us for more information.
Ink LLP is a business law firm that acts as strategic counsel to high-growth companies and those that build them. Contact one of our lawyers to discuss your business and how our team might be able to help you tackle the challenges of your business and the opportunities for growth.
This information is provided for informational purposes only and is not legal advice.