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Canada Business Structure Essay

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You’re growing yet again, and this time you’re moving across borders. Your business is expanding into Canada.

Before you move north of the border, however, you’ll need to carefully consider the structure you should give your Canadian operations. Fortunately, there are a number of different ways to structure a business expanding into Canada. Unfortunately, so much choice makes it more difficult to choose a structure.

All business structures come with pros and cons. You’ll need to do some research, talk to the experts, and determine which structure really suits the needs of your business. Here are a few types of business structures you should consider when you’re expanding into Canada.
1. Branch Office
A branch office is one of the structures …show more content…
Your Canadian operations are taxed differently, although not always advantageously. Why would anyone set up as a branch office in Canada, especially if there are other, better options available?

The answer lies in the idea that the branch office remains closer to the parent company. It is not independent, so all income flows back to head office. This can create an advantageous tax situation in some cases. It also provides other benefits, such as not needing to place a certain number of Canadians on the board of directors.
2. Subsidiary
A subsidiary is another popular business structure for businesses expanding into Canada. In fact, the subsidiary is the most common way for foreign firms to structure their Canadian operations. Why?

The answer is easy to see. Subsidiaries create a wholly Canadian entity operating in Canada. This has two major advantages. The first is favourable taxation. The Canadian subsidiary is treated as a Canadian business and so it’s taxed like one.

The other major advantage is that this type of business structure insulates the parent company. If you’re unsure about your Canadian operation’s profitability, it might be better to structure as a subsidiary. This way, your company is insulated from debts and losses the Canadian subsidiary

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