Do the Directors of a Canadian Corporation Have to Be Canadian Residents?

How the federal and provincial rules differ, and how to choose where to incorporate

Scott Tang, CPAUpdated 2026-11-032026 rules7 min read

The question foreign business owners ask most often is: "I don't live in Canada. Can I be a director myself?" The answer is yes, but it depends on where you incorporate. All the directors of an Ontario or BC corporation can live outside Canada; on the board of a federal corporation, a set proportion must be Canadian residents. Being allowed by law doesn't mean there will be no practical difficulties. Without a local director, opening a bank account and borrowing later on are harder, and authorizations with the CRA have to go through a special process.

Not required

Ontario corporations; the resident director requirement was removed effective July 5, 2021

Not required

BC corporations; all the directors can live outside Canada

25%

At least 25% of a federal corporation's directors must be Canadian residents

The rules in each jurisdiction

Where incorporated	Do directors have to be Canadian residents?
Ontario	No (since July 5, 2021)
BC	No
Alberta	No (since 2021)
Federal (CBCA)	At least 25% must be Canadian residents; if there are only 1–3 directors, at least 1
Manitoba	At least 25% must be Canadian residents
Newfoundland and Labrador	No (requirement removed April 1, 2022)

"Canadian resident" here is a corporate law term. It generally means a Canadian citizen or permanent resident who lives in Canada, and it is not the same thing as being resident for tax purposes.

How to choose

All directors outside Canada

Ontario corporation

The parent company appoints the directors directly; no need to find someone local

Incorporate in Ontario

If you operate in another province, register there too (extra-provincial registration); the name is checked under that province's rules

The choice of most foreign companies

A Canadian resident can serve as a director

A federal corporation is also an option

Broader name protection (not a substitute for a trademark or extra-provincial registration)

The resident director must really take part

Not just lend their name

Worth considering if you will operate in several provinces

For the other similarities and differences between federal and Ontario corporations (the tax is the same, the annual returns differ), see "Federal or Ontario Corporation: What's the Same and What's Different?" in this series.

If your directors are not in Canada, also think about these

Where the company is "managed"
A corporation incorporated in Canada is generally a Canadian resident corporation under Canadian tax law (separate rules apply if a tax treaty treats it as resident in another country). But if all the board meetings are held in China and all the major decisions are made there, China may also treat it as a Chinese resident enterprise based on its "place of effective management". If both countries claim it, the two tax authorities decide by mutual agreement under the Canada–China tax treaty. Think through where board meetings will be held and how resolutions will be recorded when you incorporate.
Directors carry liability
In certain circumstances, directors are personally liable for payroll deductions (income tax, CPP, EI) and GST/HST that the company failed to remit. Finding someone to act as a nominee resident director just to make up the numbers for a federal corporation is a considerable risk for that person and leaves the company on unstable footing.
Opening a bank account takes longer
The bank has to obtain the names of all the directors and the beneficial ownership information and confirm they are accurate, and verify the identity of the people authorized to open the account; each bank also has its own requirements. With all the directors outside Canada, you will need more documents and more time (see "Opening a Canadian Bank Account as a Foreign Company: Where the Difficulty Lies" in this series).
Where CRA mail goes
If the directors are not in Canada, it is best for the company to have a reliable Canadian address for government mail; otherwise it could miss penalty notices and review letters.

Allowed by law, but where you can get stuck in practice

Ontario and BC law don't require a local director, but many Canadian systems are designed around "people who are here". With all the directors outside Canada, the following are harder (the right-hand column depends on that director's own circumstances; having a resident director doesn't automatically solve them):

Task	All directors outside Canada	With a Canadian resident director
Authorizing your accountant with the CRA	Directors without a SIN usually can't use the CRA's online self-service account. The CRA has a special process: the accountant submits a request in Represent a Client, the director signs a confirmation page, which is then submitted online, and the CRA may call to verify	A director with a SIN can open an account and authorize online themselves
Opening a bank account	The people authorized to open the account (and anyone else the bank requires) must have their identity verified; those overseas often need a video call or other arrangements, with more documents and a longer timeline	A local authorized person can be verified in person
Loans, lines of credit, corporate credit cards	Neither the company nor the directors have a Canadian credit history; banks often ask for a guarantee from the parent company or a cash deposit as security	Depends on that director's own credit, and whether they are willing to give a guarantee
Renting an office, signing a lease	Landlords often ask for a personal guarantee and run a credit check	Also depends on the guarantor
Receiving CRA mail and security codes	You must have a reliable Canadian address	Needed just the same

Whether to add a Canadian resident director should depend on the company's governance and business needs — whether there is a suitable person who will really take part in management — not just on making bank accounts or authorizations easier. A resident director carries all of a director's legal responsibilities (see "Directors carry liability" above), so don't appoint someone as a nominee.

How Sheng Qian CPA can help

Incorporate online with EasyU Incorporation
Ontario or federal: you fill in the information online, and a CPA reviews it before filing. Express incorporation: if all the information is in and verification is complete before the cut-off time, it is filed the same day.
Settle the structure before incorporating
Who the directors are, how shares are issued and how the fiscal year is set, considered together with your future tax filings.
Premium package
An electronic Minute Book (registers of directors, shareholders and individuals with significant control), a business address and mail handling for the first year, and we let you know when CRA mail arrives, as agreed.
Working with overseas directors
We complete the authorization through the CRA's process for non-resident directors, then handle correspondence and filings with the CRA within the scope of that authorization; we put together the bank account opening package to the bank's requirements.

Sources

Ontario: Incorporating a business corporation
Federal: Corporations Canada – Directors and officers
Newfoundland and Labrador: Removal of the director residency requirement (April 1, 2022)
BC: Incorporated companies
Background reading (unofficial, Alberta): Norton Rose Fulbright
CRA: Confirm my representative (the exception process for non-resident directors) · Authorize a representative
FINTRAC: Beneficial ownership requirements
Canada–China tax treaty: Synthesised text of the MLI and the China-Canada DTA

Disclaimer

This article is general information only and is not tax or legal advice. Every company's situation is different; please consult a CPA or a lawyer about your specific arrangements. Service fees are as set out in our written quote.

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