If you are looking for a respectable jurisdiction where company registration is not very hard, take a look at Canada. This is a safe and reputable destination that offers excellent conditions for businesses that you are planning to expand to international markets. If your partnership does not make any profit within Canada, you will not be liable for any local taxes. What is more, Canada is an excellent starting ground for those who want to conquer the enormous US market, which may be a critical advantage for you. What is more, this is a good country for those seeking confidentiality as it has no public register of beneficial owners. If it looks like exactly what you need, you are welcome to get more information on limited partnerships in Canada for non-residents on the trusted portal. You can ask questions using the live chat available there – it’s absolutely free!
Why Opt for Ontario?
Ontario is the best-developed Canadian province, so it would be natural to choose it for company registration. This is the second largest province in the country that borders some US states, including New York. It is home to Greater Toronto, a huge metropolitan area that is home to 5.5 million people.
Toronto, Ontario’s capital, is a well-known financial hub where you will find the ninth-largest stock exchange in the world if we take into account market capitalization. Ottawa, the capital of Canada, is located in this province as well, and there are a lot of financial institutions and businesses located here. You can opt for it instead of Toronto if you feel that a large megalopolis is not exactly what you need.
Registered Office
If you register a partnership in the province of Ontario, you are required to have an official mailing address (also called a registered address in other countries). If you are not sure how to do that by yourself, you can follow the above link to get help with that.
Canadian Partnership: Organizational Structure
A limited partnership is a structure that requires at least two partners, and the number of business activities it can engage in is virtually unlimited on the condition that they are legal. One of the partners is a General Partner, which means that his/her liability is unlimited (that is, he/she is liable for the partnership’s debts with all his/her personal property). All the remaining partners may be Limited Partners, and their liability cannot exceed their contributions to the partnership. Limited Partnership, or LP, is one of the most popular forms of business in Canada and beyond.
A General Partnership is a structure where all partners are general partners and consequently all of them bear unlimited liability. Banks love GPs – well, simply because they are absolutely transparent. There are numerous industries, including web design, web auctions, consulting services, and online sales, where a GP would be an excellent choice.
Partners can be individuals or legal entities that reside in any country.
Ontario Partnership: Main Benefits
- You are not liable for corporate tax.
- You are under no obligation to submit corporate tax returns or schedule annual audits.
- There are no requirements for minimum or maximum partnership capital.
- Partners will not have to pay income tax in Canada if their business activities are carried out outside the country.
- You have an opportunity to open a corporate account with the best Canadian banks if you engage a professional nominee partner for that purpose.
- Partnership founders can be citizens of any country.
- Canada is a respected jurisdiction in the world of business.
If you want to set up a business in Canada and later obtain the right to permanent residence, we recommend establishing a Canadian corporation. It will help you create a favorable credit history and simplify your path to permanent resident status.
Local Nominee
If you want to open a corporate bank account in Canada, you cannot do so without a professional nominee partner. The latter will represent your partnership before banks and local authorities, and this is an important role in many instances as you may need to prove that your business is managed from Canada and has real substance in the country.
Canadian nominees have to comply with Ontario and Canadian AML laws and regulations. The person has to make sure your business activities are absolutely legitimate before he or she can take complete responsibility and represent you locally.
A nominee is not the person who will trust you silently and will not ask any questions as this would mean totally irresponsible behavior. Your relations will rely on trust that you will build over time along with your track record. All transactions you make will have to be supported with proper documents and checked to ensure compliance with international compliance regulations. The local nominee must have sufficient evidence to prove to the bank that all your activities are legal.
Ontario Partnership: Taxation Matters
An Ontario partnership is not regarded as a legal entity in Canada, and consequently, it is not a taxable entity, either. Profits are included in the individual tax returns submitted by partners in the country of their fiscal residence.
If your Ontario partnership has no income generated in Canada, it will not be required to submit any income tax returns or annual reports. They are still required to duly keep their financial records as these may be required in the future.
Partners pay taxes using the rates applicable in the countries of their fiscal residence, and this is true for individuals and legal entities.
If one of the partners is a Canadian resident, the respective profit must be included in the tax return submitted locally with respective taxes paid. As far as the nominees are concerned, they only pay taxes on the fees they receive for their services, and they take care of it by themselves.
As the Ontario partnership is not a taxable legal entity, it cannot benefit from double taxation treaties where Canada is a party.
Interested in setting up a partnership in Canada? Follow the above link to find out how you can do it online, how to choose a name, and what documents partners will need to submit. We wish you luck with your business endeavors!
