Canada Company Guide: Federal or Provincial Corporation, Tax and Filings

What a Canada Company Is Used For

A Canada company is, in law, a business corporation: a limited company with shares, its name ending in Inc., Ltd. or Corp. or a French equivalent, incorporated either federally under the Canada Business Corporations Act (CBCA) or under one province’s corporate statute. Foreign owners use it for a business with customers, staff or premises in Canada, as a base for trade across North America, or for holdings within the Canadian tax system.

It is a Canadian taxpayer from day one: the Income Tax Act deems every corporation incorporated in Canada after 26 April 1965 resident there, whoever owns it, and a return is due each year even without trading. A Canadian corporation is therefore never an offshore company; jurisdictions without corporate income tax are covered in our guide to offshore shelf companies.

Canadian Company Forms at a Glance

Whatever its statute, a corporation registers as extra-provincial in every other province where it carries on business. Names, articles and the five federal filing steps are covered on our page on company incorporation in Canada.

Canadian Corporate Tax at a Glance

Who May Own and Run a Canadian Corporation

Shareholders may hold any nationality and live anywhere; the board is where the statutes part ways. Section 105(3) of the CBCA, still in force, requires at least 25% resident Canadian directors on a federal board, and at least one where there are fewer than four; Manitoba applies the same test, while Ontario, British Columbia, Alberta, Saskatchewan, Quebec and the Atlantic provinces apply none. Every director must be an individual of at least 18, not bankrupt or declared incapable. A non-Canadian who establishes or acquires control of a Canadian business notifies the investment under the Investment Canada Act, before it is implemented or within 30 days after.

Owners are recorded in the register of individuals with significant control (ISC): anyone holding 25% or more of the votes or of the shares by fair market value, alone or with others, or with control in fact. Federal corporations file it with Corporations Canada, which publishes part of it along with the directors’ names and addresses; Ontario and British Columbia corporations keep it at the company, unpublished.

Where a federal board would otherwise fall short of the resident Canadians section 105 demands, we can arrange a director who qualifies as a resident Canadian under the Act. That person carries the full duties of loyalty and care set by section 122, which no agreement can lift, may be personally liable for unpaid wages and for payroll deductions not remitted, and does not take the place of the person who actually controls the corporation, who is filed with Corporations Canada as an individual with significant control.

The Yearly Cycle of a Canadian Corporation

• Annual return: a federal corporation files it, with its ISC information, within 60 days after each anniversary of incorporation and never before that date; an Ontario corporation within six months of its financial year end; a British Columbia company files an annual report within two months of its anniversary.
• T2 return: every corporation, inactive ones included, files a corporation income tax return for every tax year within six months of its end.
• Financial statements and audit: given to shareholders at least 21 days before the annual meeting and, in most cases, not filed; shareholders of a non-distributing corporation may agree unanimously to appoint no auditor.
• Changes: new or departing directors, a new office address and ISC changes are reported to Corporations Canada within 15 days.

A federal corporation with overdue annual returns cannot obtain a certificate of compliance, and Corporations Canada’s policy is to dissolve one after two years without filings, following a final notice.

Banking for a Canadian Corporation

Under FINTRAC’s rules, banks confirm the corporation exists, record all its directors and everyone owning or controlling 25% or more, and since 1 October 2025 check a high-risk federal corporation against Corporations Canada’s ISC database, reporting a material discrepancy within 30 days. Expect a branch to be involved: some banks deal with non-residents only through a branch representative, and some accept only Canadian identification in their online channel. An existing account stays with the corporation after a share sale, but the bank reviews the new owners and may keep it, ask for more or close it. See bank accounts for Canadian companies.

Incorporating a New Corporation or Buying a Ready-Made One

A new corporation lets you pick the statute, and with it the board rule, as well as the name or number and the share structure. Corporations Canada’s published service standard for an online federal incorporation is one business day. See company incorporation in Canada.

A ready-made company in Canada brings an earlier incorporation date and a run of annual returns and nil T2 returns, which counts where a counterparty or bank asks how long the corporation has existed. It does not bring CCPC status to a buyer abroad, a sale of control ends its tax year, and its former directors stay on the public record. Match its statute to your board first; our page on the off the shelf company in Canada lists what to check, and our guide to aged shelf companies explains what age proves.

What We Do for Canadian Corporations

We incorporate federal and provincial corporations and supply ready-made ones too. We draft the articles or the transfer resolutions, prepare the director and ISC information, make the registry filings, and help assemble the bank application. If we have a working contact at a bank that suits the corporation, we make the introduction; the bank alone decides.

Frequently Asked Questions about Canada Companies

Is federal or provincial incorporation better for a foreign owner?

It depends on the board. A federal corporation needs at least 25% resident Canadian directors, so it fits an owner who already has a resident Canadian willing to serve, or who wants a federal name usable across Canada. An owner whose directors all live abroad normally incorporates in Ontario, British Columbia or Alberta, where no residence rule applies. Shareholders may live anywhere under every one of these statutes.

Is the Canadian register of individuals with significant control public?

For federal corporations, partly. Since 22 January 2024 a CBCA corporation files its ISC information with Corporations Canada, and the full name, the dates on which the person became or ceased to be an ISC, the description of control and an address appear in the corporation’s public entry, although the database cannot be searched by an individual’s name. Date of birth, citizenship and tax residence are withheld, as is all data on minors. Ontario and British Columbia registers stay at the company and are not published.

Does Canada tax dividends paid to a foreign shareholder?

Yes. Section 212(2) of the Income Tax Act charges non-resident tax of 25% on dividends a Canadian corporation pays or credits to a non-resident. A tax treaty between Canada and the shareholder’s country of residence can lower that rate, and Canada has 92 comprehensive income tax conventions in force. Check the treaty with the shareholder’s country before the first dividend.

Does Canada have VAT?

Not under that name. Canada’s equivalent is the goods and services tax (GST), which Ontario and the four Atlantic provinces combine with a provincial portion into a single HST. GST is 5%, and HST is 13% in Ontario, 14% in Nova Scotia and 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island. A corporation must register once its taxable supplies exceed CAD 30,000 in a calendar quarter or over four consecutive quarters, and may register voluntarily before then.