Setting up a foreign company in Canada

Foreign company setup

The subsidiary and mobility
are planned together.

A foreign company setting up in Canada runs two projects at once: incorporating the Canadian entity, and obtaining for its executives the right to work in it. Handling one without the other costs months.

The corporate stream means choosing between a subsidiary, a branch or a joint venture, incorporating the company, registering it and meeting Quebec obligations, including those on the language of commerce and business.

The mobility stream often rests on the provisions applicable to transfers of personnel between related entities, which require a demonstrated corporate relationship and a position meeting the applicable criteria. The corporate structure must therefore be designed with that requirement in mind.

What we do

From the entity
to the team on the ground.

Choosing the vehicle

Canadian subsidiary, branch of the foreign company, or joint venture with a local partner. The choice drives liability, taxation and administrative simplicity.

Incorporation and registration

Federal or Quebec incorporation, registration with the Registraire des entreprises, business numbers and tax registrations.

Mobility of executives

Transfers of personnel between related entities, eligible position categories, demonstrating the link between the companies. The corporate documentation directly serves the mobility file.

Quebec compliance

Language obligations applicable to businesses operating in Quebec, sector-specific requirements, compliance with the provincial and federal registers.

Setup contracts

Commercial lease, intra-group service agreements, local employment contracts, distribution arrangements. See our commercial contracts practice.

Acquisition rather than creation

Where setup proceeds through buying an existing Canadian company, the transaction falls under our mergers and acquisitions practice.

Frequently asked questions

What we are asked most.

Subsidiary or branch?

A subsidiary is a separate Canadian company, which limits the group’s liability and simplifies local banking and contracting. A branch remains the foreign company and carries more exposure. The choice is made with tax counsel in both jurisdictions.

Must a director be resident in Canada?

The Quebec regime imposes no residency requirement for directors, which often makes it the simplest route for a foreign group. Federal requirements and those of other provinces differ and must be verified.

How do we transfer an executive to the subsidiary?

Provisions applicable to transfers of personnel between related entities allow the mobility of certain executives and specialized employees, provided the link between the companies and the nature of the position are demonstrated. The corporate documentation is central to that demonstration.

What language obligations apply in Quebec?

Businesses operating in Quebec are subject to obligations on the language of commerce, signage, contracts and communications with staff. These requirements are planned before opening rather than after an inspection.

The two streams of a setup meet here: incorporation and structuring for the entity, and commercial real estate for the lease of the place of business.