Setting up a Company in Canada: A Detailed Guide (2025)

Setting up a company in Canada not only opens up business opportunities in the domestic market here, but also helps businesses easily access international markets, thanks to the free trade agreements that Canada participates in.

For the company formation process to run smoothly and efficiently, compliance with legal regulations is very important.

This article by GLA will help businesses understand the detailed process and requirements to establish a company in Canada, from requirements, processes, procedures to compliances to be aware of after opening.

1. Conditions to open a company in Canada you need to know

According to the Canadian Corporations Act (Canada Business Corporations Act), Businesses need to clearly understand the basic conditions required by Canadian law to legally establish a company in Canada. 

Conditions include:

1.1. Company name

Names for Canadian companies must comply with Canadian government regulations

• The company name can be in 2 formats: numeric company name and text company name. For example: 123456 INC or Stellar Note Inc.
• Names must not be duplicated, contain sensitive words, or be prohibited by Canadian law.
• Name should be in French or English.
• The name does not contain words related to government, training institutions, education, or banking.

1.2. Number of shareholders

A company in Canada requires at least one shareholder, who can be an individual or an organization. A shareholder can be a foreign person or company of any nationality and is entitled to own 1% of the company. 

1.3. Company Director

A company must have at least one individual director. at least 18 years old and have no criminal record.

For certain types of businesses, such as federal corporations or certain provincial corporations, at least 25% of the company's board of directors must be Canadian residents or permanent residents to work with the state and federal governments.  

1.4. Minimum capital

Canada does not have a minimum charter capital requirement. Businesses need to declare capital appropriate to the size and business activities of the company. Minimum capital from 1 CAD. 

For some business sectors (Tourism, real estate, manufacturing), the company needs to meet the minimum capital requirement to be granted a business license. 

1.5. Office address

Every company needs to have an official office address in Canada to receive notices and correspondence from provincial government agencies, federal government agencies, banks. The company address must be a physical address in one of the Canadian states. 

1.6. Local Agent

For foreign companies and individuals wishing to open a company in Canada and manage it remotely, the business will need a local agent to assist in opening and managing the company.

GLA is a local agent that helps Businesses open and operate Canadian companies effectively.

2. Detailed procedures for establishing a company in Canada

To establish a company in Canada, businesses need to clearly understand the steps and fully comply with legal regulations.

Below is a detailed process to help companies easily prepare and complete procedures effectively with the support of GLA experts at a very affordable fee but still meet the requirements for opening and operating a company.

3. What do I need to comply with after setting up a company in Canada?

Once a company is incorporated in Canada, it is important to comply with legal regulations and maintain legal operations to ensure the company operates sustainably and avoid legal violations. 

Requirements include, but are not limited to the following, depending on the company's operations.

3.1. Financial and tax reports

Every year, companies are required to prepare financial statements and file tax returns with the federal government (Federal income tax return) and state (Provincial income tax returns).

3.2. Annual reporting to regulatory authorities

All companies in Canada must file annual reports with the regulatory body (Corporations Canada or provincial authorities) to update information about the company such as shareholders, directors, and addresses.

Government agencies will use these reports to evaluate the company's performance. Companies that fail to file annual reports for several consecutive years will be subject to fines and forced to close down. 

3.3. Compliance with labor laws (if any employees)

If your company has employees, you need to comply with employee benefits regulations, contributions to the Contributions to the Pension Plan (CPP) and unemployment insurance (EI), as well as labor insurance regulations.

4. How does GLA support businesses to open companies in Canada?

GLA, with experience in consulting, supporting the establishment of companies in Canada for hundreds of companies and supporting effective operations, working with the government, will support businesses:

• Canadian state consulting tailored to your company needs to open a company.
• Consulting on suitable company types, helping businesses optimize business operations.
• Assisting Canadian companies in complying with laws and annual requirements in a legal, accurate and efficient manner.
• Tax and accounting services and financial reporting according to Canadian standards.
• Register to open and verify a physical bank account in Canada or an account with a reputable digital bank in the US, Singapore, Hong Kong.

5. Frequently asked questions about the process of setting up a company in Canada

Highlights

• Businesses opening a company in Canada need to comply with the requirements regarding company name, director residency status, company address in Canada and charter capital to open a company legally.
• Have 3 types of businesses to choose from is a private company, partnership, corporation in Canada.
• The process includes registering a company name, filing with the government to receive a certificate of incorporation, registering for a tax identification number, and opening a bank account for effective operations.
• Companies are required to file financial statements, declare and pay taxes, maintain resident directors (if required), and comply with labor obligations.