Subject: US citizen running Canadian corporation
Expert: taxman at centa.com
Date: Tuesday September 06, 2005
Time: 06:45 AM -0700
QUESTION:
Is it possible for a US citizen to establish and run a Canadian corporation?
This corporation has been established with a Canadian director and two US
citizens as directors. My question is whether or not the US citizens who
are shareholders and directors can manage the business and provide services
through that business in Canada. Can these US citizen directors live and
manage the business in Canada throughout the year or is there a 6 month time
limit on their activities in Canada? Can the US citizen directors be paid
for their services to the company or must they be paid through dividends as
directors of the Canadian corporation? Are there any restrictions for them
as far as providing services to the Canadian clients through the Canadian
corporation? I understand the tax situation in that all income from their
activities in Canada are reportable to the US tax service, but are they also
liable for taxes on Canadian client services? Can they operate their
business in Canada throughout the year? The directors also have a US
corporation. Should they bill the US corporation for their services in
Canada and then have the Canadian corporation pay the US corporation for
their services? Sorry to be so confused, but I hope you have the answers so
that we can get on with this business in Canada. Thank you.
=====================================================================
david ingram replies:
1. Any citizen from any country can establish and run a business in Canada
from a distance without any specific visa other than a temporary visa as a
business visitor.
If your desire is to come to Canada and live here, there are several
different possibilities.
2. You can simply apply to come under your own qualifications by going to
the Canadian Immigration Site at:
http://www.cic.gc.ca/english/skilled/assess/Education.asp
If you can get enough points (67), you can just move to Canada. At the
moment, that will likely take you about 28 months from start to finish,
3. If you are investing significant monies, you may want to come as an
entrepreneur with an investment of $300.000 Canadian. You can find those
details at http://www.cic.gc.ca/english/business/entrep-1.html. This
requires you to actually fund and run the business and may be the one for
you.
4. A further method is to come as a business investor with a net worth of
$800,000 and a five year investment of $400,000. In this case, you do NOT
have to actually work in a business and it is possible to put the money into
a Government sponsored program and get it back (with no earnings whatsoever)
in five years.
You can find out more at
http://www.cic.gc.ca/english/business/invest-1.html.
5. A third business possibility is to come as a self-employed person. In
general this means farming or the arts. i.e. you have to operate a farm or
some sort of artistic endeavour such as being an actor or musician.
Glad to help if you decide to come.
Answers to this and other similar questions can be obtained free on Air
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, I, david ingram am a
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David Ingram's US/Canada Services
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