Doing Business in Canada
A Practical Guide for AGN International Firms and Clients from the Americas
Strategic opportunities in the North
Business leaders in the U.S., Mexico and countries across Central and South America, are constantly searching for new business opportunities—more so at a time when economic uncertainty and the possible revision of longstanding multilateral trade agreements make finding new export options more appealing. Finding dynamic new markets may even be essential to their ongoing success.
That’s why now more than ever, expanding into Canada presents a wealth of growth opportunities. Canada’s stable economy, skilled workforce and innovation-friendly environment make it an attractive destination for international businesses. It also offers a foothold in North America and an alternative base from which to tap into the always-lucrative U.S. market.
Doing business in Canada comes with clear advantages—and a few strategic hurdles to navigate along the way. The Adams + Miles team has prepared this guide for AGN International firms and their clients to help them understand the opportunities and nuances of doing business in Canada. We’ll provide an overview of what’s attractive about Canada, potential tax and compliance pitfalls—and how to navigate the tax, legal and business landscape strategically and effectively.
Why Canada?
Stable, predictable and open for business
Canada is one of the most open economies in the world, with strong trade ties, a transparent legal system and a business culture that balances regulation with opportunity. It’s politically stable, economically sound and consistently ranks as one of the best places in the world to do business.
The business culture tends to be ambitious, entrepreneurial and growth-oriented, but more reserved than many other markets. Canada’s population is highly diverse and opens a window to the world without leaving the confines of our vast borders. An economy founded on resource extraction has evolved to host some of the world’s leading manufacturing, information technology, financial services and biotech companies.
Top reasons that companies from the Americas expand to Canada:
- Market access—Canada has free trade agreements with more than 50 countries, including the U.S. and Mexico through CUSMA (the successor to NAFTA).
- Skilled workforce—With high levels of education and bilingual capabilities (English and French), Canada’s multicultural labour force is globally competitive.
- Innovation-friendly—Canada offers generous research and development tax credits and incentives for sectors such as technology, manufacturing, clean energy and life sciences.
- Cultural and business alignment—Especially for U.S. and Latin American companies, Canada’s proximity and cultural ties can make for a relatively smooth market transition.
- Social infrastructure—Canadian provinces maintain robust healthcare, education and social support systems, making entry easier for business leaders and their employees.
The strategic hurdles
Every market has its unique challenges and Canada is no different. While our cultures are similar from afar, Canada’s economic, social, cultural and political systems are different from that of the United States. Federal law takes precedence in areas such as trade and criminal justice, each province has its own business rules and compliance processes can be detailed. Immigration pathways for key personnel can take time. The tax system is efficient and effective, but presents challenges—with overlapping federal, provincial and sometimes municipal considerations.
Here’s what to expect:
Multi-layered tax compliance
Goods and Services Tax/Harmonized Sales Tax (GST/HST), provincial sales tax, payroll taxes and corporate income tax filings require careful planning and execution. In Canada, full tax compliance is a requirement. Understanding and complying with these tax layers is essential for avoiding penalties and optimizing your tax position.
Language and cultural nuances
French-speaking Quebec has a distinct legal and cultural framework. For example, Quebec operates under a civil law system and requires French for many business interactions, while Alberta offers a more streamlined regulatory environment. Understanding local business etiquette is key across provinces, including the Canadian approach to business.
Foreign ownership and immigration
While Canada welcomes foreign investment, some sectors (such as media and real estate) have restrictions or disclosure obligations. Bringing key personnel into Canada involves navigating immigration pathways and understanding employment laws, which can vary by province. This is a process best managed with the assistance of local immigration lawyers.
These points aside, it’s important to note that with the right team of professional service providers and strategic advisors—along with an effective expansion strategy—these challenges are entirely manageable.
Strategic entry points
AGN International firms across the Americas work with clients expanding into Canada through a range of scenarios: greenfield investment, partnerships, acquisitions or cross-border service expansion. The right approach depends on the organization’s size, sector and long-term goals.
Here are three common ways companies break into the Canadian market.
Incorporation of a Canadian Subsidiary
Forming a Canadian corporation gives you a local presence, access to Canadian banking and credit and simplifies contracts with Canadian customers and suppliers. You’ll need:
A Canadian business number and CRA registration (Canada Revenue Agency)
A registered office and a Canadian-resident director in some provinces
Provincial registrations, depending on your location and industry
Learn more about the incorporation process at Innovation, Science and Economic Development Canada
Cross-Border Services and Digital Expansion
Many AGN clients begin by selling into Canada from abroad—digitally, through distribution, or via occasional travel. This approach can be low-risk, but note that even limited activity (such as hiring a Canadian employee or selling digital goods) may trigger tax obligations.
Consult your AGN International tax advisors to avoid unintended permanent establishment risk.
Acquisition of a Canadian Company
Buying an existing business can shortcut your market entry by leveraging an existing workforce, customer base and operational infrastructure. Be prepared for rigorous due diligence and regulatory review, especially in sectors deemed sensitive or strategic.
Taxes, Tax Planning and Incentives
Canada’s tax system is layered, but is also opportunity-rich for organizations that understand its nuances.
Key elements to plan for:
- Corporate income tax rates vary by province, ranging from 23% to 31% combined (federal + provincial)
- GST/HST applies to most goods and services. Rates and rules differ by province
- Payroll taxes include contributions to Employment Insurance (EI), Canada Pension Plan (CPP) and other provincial levies
- Withholding taxes on dividends, interest, and royalties paid to foreign entities can apply—though tax treaties can reduce or eliminate these levies
Canada has tax treaties with many AGN International jurisdictions in the Americas, including the U.S., Mexico, Brazil, Colombia, and Argentina. These agreements help prevent double taxation and create room for strategic tax planning.
Find more on Canada’s tax treaties here
Incentive programs to explore:
- Scientific Research and Experimental Development (SR&ED) tax credits support R&D activities
- Innovation funding through Canada’s Strategic Innovation Fund
- Export Development Canada provides support for global businesses
Taxation: Federal and provincial highlights
Federal Corporate Tax
- General Rate: 15% net tax rate after federal tax abatement and general tax reduction
- Small Business Rate: 9% for Canadian-controlled private corporations claiming the small business deduction
Select provincial corporate tax rates
- Ontario: 11.5% provincial rate; combined with federal, the total is 26.5%
- Quebec: 11.5% provincial rate; combined with federal, the total is 26.5%
- British Columbia: 12% provincial rate; combined with federal, the total is 27%
- Alberta: 8% provincial rate; combined with federal, the total is 23%
Sales Taxes
- GST/HST: Varies by province. For example, Ontario charges 13% HST, while Alberta has a 5% GST with no provincial sales tax
Immigration and talent mobility
If you’re sending team members into Canada, even temporarily, you’ll need to navigate federal immigration rules. Business visitors may not need a work permit or visa, but anyone engaging in hands-on work or management duties likely will.
Popular pathways:
- CUSMA Professionals: U.S. and Mexican professionals in approved roles can get streamlined permits.
- Intra-Company Transfers: Executives, managers or specialists being sent to a Canadian affiliate qualify under the Global Talent Stream or ICT pathway.
- Start-up Visa Program: For entrepreneurs launching innovation-focused businesses in Canada.
Visit Immigration, Refugees and Citizenship Canada to learn more about compliance requirements
Provincial Considerations: Canada is Not One-Size-Fits-All
Each province has its own regulatory and tax environment. Ontario and British Columbia are the most common entry points due to their size and international scope. Quebec offers strong access to European markets and significant R&D credits, but operates under a civil law system and requires French for many business interactions. Alberta is currently Canada’s wealthiest province and is powered by natural resources.
Here’s a quick rundown of the economies in Canada’s largest provinces:
Ontario
Canada’s financial capital, Ontario is powered by manufacturing, services, fintech and healthcare.
British Columbia
Gateway to the Pacific. Ideal for natural resources, film/TV, and Asia-Pacific trade.
Alberta
Canada’s energy hub is driven by the oil and gas, agriculture, clean energy, and technology sectors.
Quebec
With its unique cultural landscape, Quebec is strong in life sciences, aerospace and IT.
Meet the Adams + Miles International Tax team
Tony Sokic
Managing Partner
Glen MacMillan
Partner
Sikandar Khan
Manager
Contact a member of our team now to discuss doing business in Canada
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