Setting Up a Wholly Owned Subsidiary in Canada: Why Ontario?

Ontario's advantages: population, economy and market

Advantages for incorporation and day-to-day paperwork

Directors don't have to be Canadian. Ontario removed its resident director requirement in 2021. If the parent company is in China or Hong Kong and has no one in Canada yet, people from the parent company can serve as directors — there is no need to find a nominee Canadian director.

Online incorporation can be fast. Ontario incorporation is done online. If you choose Sheng Qian CPA's Express incorporation and provide all documents and complete identity verification before the agreed cut-off time, we file the same day. When the certificate is issued depends on the registry; once it is issued, we go on to register for the Business Number. A named company needs an Ontario NUANS name search report. If you don't want to wait for a name, you can incorporate a numbered company first and change the name later.

Sales tax is a bit simpler. Ontario uses HST (13%), which is combined with the federal GST and reported to the CRA under one account. BC has GST (5%, administered by the CRA) plus PST (7%, administered by the BC Ministry of Finance), and businesses that need to register for PST must register and file separately. Note: which sales tax you charge, and how much, depends on what you sell, where you sell it and who the customer is, not on the province where the company is incorporated — an Ontario company selling into another province may still have to charge tax under that province's rules.

You have local support. Sheng Qian CPA's office is in Richmond Hill, in the Greater Toronto Area. Everything from incorporation, bank account opening, bookkeeping and tax filing to receiving CRA mail on your behalf can be handled locally, and you can talk to us directly in Chinese or English (see "How Sheng Qian CPA can help you get it all done in one place" below).

How BC compares

British Columbia (BC), home to Metro Vancouver, is also a common choice for foreign companies, and it also does not require resident directors. Companies whose business is centred on Metro Vancouver, or that work in trans-Pacific ports and logistics, also consider it. Compared with Ontario, the main differences are:

Setting up in Ontario with EasyU Incorporation: how it works

EasyU Incorporation is Sheng Qian CPA's incorporation service on the EasyU platform. We handle federal or Ontario incorporation for you from start to finish — name search, articles of incorporation, setting up the Minute Book and CRA registration — and Sheng Qian CPA delivers the whole process. Everything is online from the first form, so no one from the parent company needs to fly over.

The parent company usually needs to prepare its business licence or certificate of incorporation, its articles of association, a board resolution approving the subsidiary and appointing authorized signatories, and identification for the individuals with significant control. Banks and government agencies sometimes require notarization, authentication and translation; we list these for you when we give the quote. In the whole process, opening the bank account is often what takes the longest — the incorporation itself is quick by comparison.

To start now, go to incorp.easyu.ca and fill in the information form.

If you later do business in another province, you will also need an extra-provincial registration in that province.

How Sheng Qian CPA can help you get it all done in one place

Our office is in the Beaver Creek business park in Richmond Hill, near Highway 7 and Leslie Street. Highways 404 and 407 are close by, and Viva rapid transit stops nearby. The building has underground and surface parking. From incorporation to getting set up, you can talk to us directly in Chinese or English.

Two incorporation packages (for prices, see "What Sheng Qian CPA Can Do for Foreign Companies: Services from Set-Up to Day-to-Day Operations" in this series):

Virtual office: If the parent company is outside Canada and you are not setting up an office in Canada for now, you can use our business address in Richmond Hill. We provide business address registration, mail and parcel handling, and meeting room rental. When important mail such as CRA letters arrives, we notify you in the way and within the time set out in the service agreement. Responding to it and dealing with it promptly after you are notified remains the company's own responsibility.

Express incorporation: If you provide all documents and complete verification before the agreed cut-off time, we file the incorporation the same day. This suits companies in a hurry to sign contracts, open a bank account or meet a project deadline. When the certificate is issued depends on the registry. The Express fee and cut-off time are set out in the quote.

BC companies: EasyU Incorporation's online process currently handles federal and Ontario corporations. If you need a BC company, please contact us first to discuss your situation.

Once incorporation is complete, we can carry on with opening tax accounts, bank account opening documents, bookkeeping and tax filing, and Payroll (see "What Sheng Qian CPA Can Do for Foreign Companies" in this series). For what to do at each step after incorporation, see "Your Company Is Incorporated: What Comes Next?" For how to choose between federal and Ontario, see "Federal or Ontario Corporation: What's the Same and What's Different?"

How to start: Fill in the information form online at incorp.easyu.ca, or book an initial consultation. We give you an itemized quote based on the services you select, and once you confirm, we work through the checklist.

What about federal incorporation?

A federal corporation's name can be used across Canada (this is not the same as trademark rights). However, the federal rules require at least 25% of directors to be resident Canadians (at least 1 if there are fewer than 4 directors), and operating in Ontario also requires a separate extra-provincial registration. If the parent company has no one in Canada, we generally don't recommend starting with a federal corporation. Manitoba has a similar resident director requirement; Alberta (from 2020) and Newfoundland and Labrador (from April 1, 2022) have removed theirs.