Yes, as of July 2021, the Ontario Business Corporations Act (OBCA) completely removed the Canadian residency requirement for company directors. You can now form a 100% foreign-managed Ontario corporation, though the provincial government incorporation fee remains $300 CAD.
If you are an international entrepreneur looking to expand your business into Canada, Ontario is often the most attractive starting point. Historically, starting a business here was complicated for foreigners because the law required at least 25% of a corporation’s directors to be resident Canadians. Fortunately, this is no longer the case.
Today, the Ontario Business Corporations Act (OBCA) allows a non-resident to be the sole director of an Ontario corporation. Whether you are aiming to open a tech startup in Toronto, a logistics hub in Mississauga, or a retail store in Ottawa, you can maintain full board control without needing to hire a local nominee director. However, incorporating as a non-resident still involves specific tax and banking hurdles. It is generally recommended to hire a local Ontario law firm from our directory to ensure your business formation goes smoothly.
Step-by-Step Process for Non-Residents Incorporating in Ontario
While the director residency rule has been lifted, the actual process of setting up your corporate entity requires careful attention to detail. This process generally applies to all non-residents, regardless of which Ontario city you plan to operate in. 💼
Step 1: Choose Between Federal and Provincial Incorporation
Before filing any paperwork, you must decide if you want to incorporate provincially under the OBCA or federally under the Canada Business Corporations Act (CBCA). It is crucial to note that the CBCA still requires at least 25% of directors to be resident Canadians. Because of this, most foreign investors specifically choose the Ontario provincial route to avoid the resident director mandate.
Step 2: Obtain a NUANS Name Search Report
If you are not using a numbered company (e.g., “1234567 Ontario Inc.”), you must prove your chosen business name is unique. You do this by purchasing an Ontario-biased NUANS (Newly Upgraded Automated Name Search) report. This report reserves your proposed corporate name for 90 days while you prepare your incorporation documents.
Step 3: File the Articles of Incorporation
Your Articles of Incorporation are the foundational documents of your new company. You will submit these through the Ontario Business Registry. The forms will require you to outline your share structure, list the sole non-resident director, and state your official registered office address. You must have a physical registered office address in Ontario; a simple P.O. Box is not legally acceptable.
Step 4: Apply for a CRA Business Number
Once your company exists provincially, you must register with the Canada Revenue Agency (CRA) to obtain a 9-digit Business Number. 📋 Depending on your global revenue and business activities, you will also need to open specific CRA program accounts, such as a Harmonized Sales Tax (HST) account or a payroll account if you plan to hire local Canadian employees.
Step 5: Navigate Corporate Bank Account Opening
This is often the most challenging step for non-residents. While Ontario law allows foreign directors, Canadian anti-money laundering (AML) laws require banks to verify the identities of corporate officers. Most major Canadian banks will require you to visit a branch in person (in Toronto, Ottawa, etc.) to present your passport and finalize the account setup.
How Much Does it Cost in Ontario?
Setting up an OBCA corporation from abroad involves several distinct fees. All amounts below are estimates in Canadian dollars (CAD):
| Service / Requirement | Estimated Cost (CAD) | Details |
|---|---|---|
| Government Filing Fee | $300 | Mandatory provincial fee for Articles of Incorporation. |
| NUANS Name Report | $8 – $20 | Required unless choosing a numbered corporation. |
| Registered Office Service | $300 – $600 / year | Virtual office providers who supply an Ontario street address. |
| Law Firm Fees | $1,200 – $2,500+ | For drafting the minute book, bylaws, and share certificates. |
How Long Does the Process Take?
The actual filing of the Articles of Incorporation through the Ontario Business Registry is incredibly fast-often processed on the same day or within 24 hours. However, the entire setup, including getting a NUANS report, drafting bylaws with your lawyer, and waiting for the CRA to process your HST registration, generally takes 2 to 4 weeks. Opening a bank account can add additional weeks depending on your travel availability. ⌛
Frequently Asked Questions (FAQ)
Do I need an Ontario address to incorporate?
Yes. Even if you are a non-resident director living abroad, the OBCA mandates that your corporation maintains a physical registered office address within Ontario. Many non-residents use their lawyer’s address or a corporate service provider for this purpose.
Will my Ontario corporation have to pay Canadian taxes?
Absolutely. An Ontario corporation is considered a separate legal entity and a resident of Canada for tax purposes. It must file an annual corporate tax return (T2) with the CRA and pay applicable provincial and federal corporate income taxes on its worldwide income.
Can I move to Canada just because I incorporated a business?
No. Owning an Ontario corporation does not automatically grant you immigration status, a work permit, or permanent residency. If you wish to relocate to Canada to run your business, you will need to apply through the appropriate channels with Immigration, Refugees and Citizenship Canada (IRCC).
What happens to my corporate minute book?
Ontario law requires corporations to maintain a corporate minute book containing bylaws, share certificates, and director resolutions. These records must generally be kept at the registered office address in Ontario, or available electronically.
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