Do US companies always need to setup an entity in Canada?
Often in Canada, US companies do not need to set up a new entity or pay corporate taxes in Canada. It all depends on the type of business you are doing there and the job roles of your employees in Canada. As a general rule, the less customer-facing your Canadian staff are, the more likely it is that you do not need an entity. We advise each client on a case-by-case basis to ensure we find the most cost-effective compliance solution.
How is Canada organized between the Federal State and the Provinces?
Like the US, in Canada compliance and withholdings are split between the Federal and the Provincial level but there are some important differences. US companies need to register for a Canadian Federal Business Number and Federal Employer Registration, while Worker’s Comp is based on a Provincial system.
What is the most difficult Province from a payroll perspective?
Quebec is almost a country within a country. US companies find it much harder to manage their Quebec compliance in-house as the rules are extensive and official documents must be submitted in French. The solution which works well for our clients is to outsource payroll and compliance to a partner who is familiar with Quebec.
What’s your Top Tip for doing business in Canada?
Remember that Canada is a separate country with its own laws and taxes, so expect rules and regulations to be different than the US. Ask us about Expat tax and social security complications too if your US staff are spending a long time in Canada