Many entrepreneurs from all over the world are looking for a jurisdiction that would be considered respectable by the international business community and would offer excellent conditions for business and low tax rates at the same time. As you probably understand, this combination is hard to find, but it exists: you can establish a general partnership in Canada to take advantage of both benefits. The country offers much more, of course (like the possibility to open an account and enjoy its excellent banking services), and we are going to discuss all the perks later. If you want to get more information and ask questions to get expert advice, read the article on Ontario GP registration on a trusted portal and use live chat for communication.
Why Canada?
Canada is a hospitable country when it comes to business founders from across the globe, and it offers a high level of data security and low (or even zero) taxes. Non-residents are free to start a general partnership in Canada on the best terms possible as Canada actually offers benefits similar to offshore destinations, namely:
- Safety and security for foreign businesses
- The possibility of full foreign ownership
- Easy access to its top-notch banking services
- Paid public register of beneficial owners
- Zero tax on profits generated abroad
Sounds interesting? Let’s look at the details.
General Partnership in Ontario: Peculiarities
Many business people who want to set up a legal entity are interested in confidentiality. As for Canada, keep in mind that the register of beneficial owners is available to the public, but is fee-based. You can officially use nominee services if you want to have the highest privacy level possible.
Authorized Capital
There is no minimum or maximum threshold set, so you can have any authorized capital or choose to have no authorized capital at all.
Legal Form
The general partnership registered in the province of Ontario is required to have the presence of business at the place of its establishment, including a mandatory registered and postal address.
GP Director
You don’t need to appoint a director for your general partnership in Ontario as the governing role is performed by the partners.
GP Secretary
A secretary is not required by Canadian laws in the case of a non-resident general partnership, but you are free to appoint one if you need to.
GP Taxation
If you generate 100% of your income from foreign sources, you are not required to pay any corporate taxes in Canada. The income tax shall be individually payable by each partner in the country of fiscal residency under the local requirements.
Reporting and Auditing
Canadian general partnerships are not required to keep financial records or submit tax returns and reports to any authority – and neither are they obliged to have their financial reports audited. However, they still need to keep records – well, just in case. This is a recommendation rather than an obligation.
If the amount of income/expenses of the Ontario general partnership is more than 2 million Canadian dollars during the reporting period or the total assets owned by the GP cost more than 5 million Canadian dollars, the entity may be required to submit a Statement of Partnership Income (form T 5013).
GP partners
At least two partners are required to form a general partnership. They may be residents of any country, individuals or legal entities.
The governing body of Ontario General Partnerships is flexible, which is great if you establish a business with a sole foreign founder:
- When you establish a GP in Canada, your corporate documents have to bear the names of two partners. One of them is required to be a Canadian resident and own the majority interest in the general partnership.
- This requirement may sound tough, but the problem is easily solved if you use a nominee. Such a partner will make it possible for you to open a bank account without much hassle and manage your business without the engagement of third parties or other beneficial owners (partners).
- The Ontario General Partnership is unofficially owned by a non-resident founder mentioned in the documents as a second business partner. This is in fact the only interested person who owns a full interest in the Ontario partnership and draws profit from the business.
- The nominee and the actual owner of the general partnership sign an agreement where they set out the rules of receiving profit from the business activities.
Documents Required to Establish a General Partnership
Here is a package of documents you will need to set up an Ontario GP:
- Proof of state fee payment
- Application to register a general partnership in Canada
- General Partnership Resolution
- Each partner is required to provide a copy of an international passport valid for no less than 6 months from the date of registration application
- General Partnership Agreement
- Proof of residence address (a bank statement, a utility bill, or an extract from the register of residents). The documents should be no older than 3 months.
- If the partner is a legal entity, it has to submit the Articles of Association.
- A photo of each GP’s individual partner with a passport held in hands to pass the identification procedure.
- The name of your partnership. Keep in mind that it cannot include the founders’ names or the words that refer to specialized/governmental organizations, such as “trust”, “government”, or “bank”.
All documents are submitted in English or accompanied by a translation into English and apostilled.
Can I Establish a General Partnership Remotely?
Yes, you can do that! In theory, you can even venture on your own – some people do succeed. However, we strongly recommend that you rely on expert assistance. You can follow the above link to contact a specialist and see what practical assistance you can get – and decide whether you need it.
You may wish to delegate the following:
- Registered agent’s services
- Making arrangements for a registered office in Ontario
- Preparation, thorough check, and submission of the required package of documents
- Obtaining a correspondence address
And other aspects that you may have no time for.
Anyway, you can book an initial free session with a professional to discuss your requirements and see what help you may need.
We wish you luck with your business!
