Business owners looking to massively scale their business should all be considering one thing;
Expanding to Canada.
Doing business in Canada can put you on the fast-track to multi-million-dollar revenue. From stellar tax breaks to additional write-offs, conducting business in Canada has numerous advantages for wealth builders.
It’s crucial, however, to set things up right from the beginning. Canadian laws are different and it can be difficult to navigate the complexities of international insurance, taxes and trusts.
Your first step is to take advantage of a free Gap Analysis with a member of our team. Our cross-border specialists will help you create a plan that is individually tailored to your needs. Next, check out these three ways you can start doing business in Canada.
1. Sole Proprietorship
Sole proprietorships are similar in Canada and the U.S. A main benefit is that they can give you write offs towards your taxable income.
For instance, Canadian sole proprietors can write off 10 to 20 percent of their houses if they’re used for business. There are many similar write offs you can take advantage of on your T4 income – which is filed every year through the Canada Revenue Agency.
The many write offs make a sole proprietorship a great option for new businesses. Many business owners choose to go this route as they get established and have low profitability.
As their revenue generation grows, however, so do their tax burdens. If you start making seven figures, you can be taxed upwards of 50 percent. You will want to look at other entities if you expect to build wealth fast.
Partnerships are an option for those looking to set up a business with others. In addition to combining financial resources, starting a Canadian partnership is an inexpensive way to establish a business.
While a partnership may be a viable option for those with business partners, they do have their disadvantages. Each partner is responsible for doing their own tax return. This means that any money you make on the partnership goes straight to your taxes.
You also need to be careful of your liability. Canadian partnerships have unlimited liability – so personal assets may be required to pay off debts.
3. Limited Companies
Setting up a limited company in Canada is a great way to have flexibility as a business. You can enjoy the benefits of more write off opportunities, more asset protection and more legal structure.
Canada also allows you to set up companies as C-Corps – and the structure is similar to C-Corps in the U.S. If you have C-Corps in both the U.S. and Canada, you can easily transfer money without paying lofty international fees.
For example, exchanges between U.S. and Canadian C-Corps have a 5 percent withholding tax. Bringing in money to Canada through an LLC? That has a much higher withholding tax at 15 percent. You can also avoid exchange rates by keeping your money in U.S. accounts. Using a U.S. credit card can help you keep avoid paying wiring fees and high Canadian taxes.
Starting a Canadian company is all about planning and having the correct team in place right from the beginning. By establishing your business the right way, you can get on the fast track to seven figure income. You can protect your assets, reduce your taxes and see much higher returns by establishing yourself as a Canadian business.
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