Canada has always remained a favourable choice for business persons, who are willing to expand their business worldwide. Canada always be a centre attraction for investors because of some important facts like easy availability of skilled workers, natural resources like gas, oil, and timber available in abundant. Many foreign multinational companies want to open their branch offices in Canada. If you are thinking about business in Canada, you have to know the importance of having a business in Canada. There are five benefits to starting a business in Canada.
There are some major perks of having your business set up in Canada. Canada has conducive trade agreements with other countries like the US. Canada has low taxes, a skilled workforce is easily available here, Canada has a stable economy and its functioning is the same as US markets
5 Reasons Why You Should Be Doing Business in Canada as a Foreign Company
It is already mentioned that there are many benefits of doing business in Canada. There are major five reasons that make this place ideal to establish your company in Canada to expand your business worldwide.
1. Canada Continues to Lower its Corporate Tax Rates
Most of the companies which have their offices or branches in other countries have to pay a heavy amount as income taxes on their earnings. Canadian government has provided some offer on tax for those companies which based out of the US. If any company does not establish itself permanently in Canada, there is no need to pay income taxes on its profits.
A PE shows the legal system of a company. It is a fixed location from where the business is carried forward. If you want to take the privilege of the tax agreement of Canada and the US, then you will have completed its guidelines. You can reduce your PE risk by doing a partnership with a third party contractor who will sell your products to the customers.
To avoid the PE, you can sustain the compliance by paying the required cost according to the terms of the treaty. At the end of the financial year, you can avail your business benefits at the end of the financial year by filing an income tax return as per the rules of the treaty.
U.S. companies making profits by working at the international level concerning tax rates. In the year 2019, the national rate of tax was 21% and the tax rate of the branch was 21% to 31%. It was a big cost for companies.
The Canadian corporate tax rate was 15% in 2019, which was counted as the lowest rate at the international level. To boost up the economic growth of the country, Canadian officials are trying to adjust their tax rates continuously, because it was 18%in 2010.
2. Probable Removal of Burden due to Income Tax Treaty for U.S. based Companies
Some investors want to expand their businesses in other countries because of high taxes in their own countries. Many companies feel that the high corporate tax rates are a huge hurdle in the way of their success. In the economy of the US, the national corporate tax rate is 21% in 2019.
Any Business headquarters which are located in other countries have to pay income tax on their earned profits. But, there is an income tax treaty that can reduce some burdens of tax. If your company has no permanent establishment then you have not to pay income tax.
3. Doing Business in Canada is Familiar
When you want to establish your business in another nation, it is very necessary to know about the social life and cultural norms of that place. Canada has similarities with the US regarding social life. People in both countries greet each other almost in the same manner and have similar population tally.
They have very similar statistics to America in religion, culture and ethics. In Quebec, the most speaking language is French. Canada has many similar traditions with the US, which is very favourable for local business owners.
4. Stability in the Canadian Economy
Forbes ranked Canada 1st in position as the Best Countries for Business, in 2011. Canada is a more stable economy in comparison with the US has rank 17 in the same list. Canada is continuously growing economically from 2005 to 2014. The reasons for the stable growth are the freedom of trade, protection to investors and less corruption and all above low tax rates which attracts the investors to do business in Canada.
Canada has stable economic growth from 2005 to 2014 because it recovered from the financial crisis, which happened in 2008 all around the world because major banks of Canada came out from the crisis. The stability in the Canadian economy occurs due to the intervention of the Bank and organizations regarding its lending policies.
The international thinkers and institutional observers predict the long term growth in the economy of Canada and it is the major reason that many companies prefer to do business in Canada. The traits in the financial services sector and in the renewable energy sector is seemingly good and also favourable for the digital media market.
5. Canada has a Highly Skilled Workforce
If you want to hire skilled employees then Canada is the best choice because it has a huge number of skilled people. It is possible because of its good Educational institutions and Universities which provides vocational training to their students. Highly skilled workers are easy to get here because Canada has a huge skilled workforce.
According to Economic Co-operation and Development (OECD), Canada has the second rank around the world in having a population of the age group between 25 to 34-year-olds; people in Canada who completed their post-secondary education is 62%; Immigration level of Canada is also favourable for the newcomers so that the employable individuals with the age of 18 and above who completed their post-secondary education is 65% which is the highest percentage across the globe.
If you want to expand your business in Canada and want to hire a talented workforce in the country, you will get the quality people here only. You can increase your local sales, there is limited liability and effective tax rates. For a wealthy and successful franchise and tax breaks to increase your business incomes and capital gains, start making a plan of action to migrate to Canada today. Reach out to ImmigToronto consultants to get the quality solutions on how you can plan your migration to Canada in the best manner possible.