If you register your foreign company in a low-tax jurisdiction, you might face some image issues when dealing with international partners. It is possible, however, to open a business company in a foreign country that has an impeccable reputation in the world market. Canada in particular offers a splendid opportunity to register a Limited Partnership in the province of Ontario. If your Canadian LP does not derive any profits from business operations on the territory of Canada, the company will not be liable to any Canadian taxes. Besides, there are no limitations as to the minimum or maximum amount of the partnership charter capital.
What are the main advantages that you can find when registering an LP in Ontario, Canada? First, the country is among the major players in the world markets of natural resources, commodities, and services. It is true that Canada’s economic growth has slowed down a bit over the recent years, but the country remains economically strong anyway and the current problems are certainly going to be overcome in the near future. Since the time when Canada became an independent country, it has demonstrated a stable economic growth.
This sort of stability gives Canadian business companies a perfect reputation. Suppose that you have two foreign companies registered in offshore jurisdictions. Make them partners in the Canadian LP and there you go: you can do business via your Canadian company that has a Canadian identification number. We would like to stress that both physical persons and legal entities (such as an offshore-registered company, for example) can act as partners in a Canadian LP. We also must point out that it does not matter where the person comes from or what country the company is registered in: all nationalities are welcome to register LPs in Canada.
Another great advantage that your Canadian-based LP can bring is the possibility to bank in the country. Royal Bank of Canada, CIBC, Bank of Montreal… These and many other Canadian banks have an extremely good standing in the international financial markets and you can set up a corporate account for your Canadian LP in one (or more) of these world-famous banks. At this point, we have to issue a serious warning, however. If you are planning to open a bank account for your company in Canada (you don’t have to but you can), we suggest that you shouldn’t make an offshore company a partner in your Canadian LP.
The Canadian dollar is the official currency in Canada. The US dollar is almost an official currency there! When you open an account in a Canadian bank, they will set up a US dollar account for you by default. The banking systems of the two countries are integrated to a very large extent and registering a Canadian LP is a legal opportunity to have a US dollar account. Many foreign nationals establishing LPs in Canada open merchant accounts in the country, which facilitates their online business operations greatly. We must note at this point, however, that Canadian banks are not very good at working with other currencies. That is to say, if you would like to have a euro account, for example, you will be well advised to bank in Europe rather than in Canada.
What does it take to register an LP in Canada? What requirements do you have to meet? First, one of the partners in a Limited Partnership has to have unlimited liability while the liabilities of other partners are limited by the amounts of their respective contributions to the company’s registered fund. We have to be honest and tell you that banks in Canada are more willing to deal with General Partnerships where every partner has unlimited liability. This said, a GP can also be established by a foreign national in Canada. Please click here if you would like to learn more about these opportunities.
The next important requirement is that your Canadian-based LP shall have at least one partner who is a citizen or a legal resident in Canada. Nominee partner services are readily available in the country and you wouldn’t have to pay a full salary to the Canadian partner in your LP. At the same time, you will have to pay them some money for their services. The matter is that your Canadian nominee partner is not going to be a completely silent partner. He or she is going to interact with the banks on behalf of your company. When dealing with the banks, this person will have to comply with all the anti-money-laundering regulations and meet all the due diligence requirements. This is the reason why your Canadian nominee partner has to be knowledgeable about your business operations. The person has to be hundred percent certain that you are engaged in legal business only. Thus, at least at the beginning, all your transactions will have to be carefully documented. As time goes by, trust will build between you and your Canadian nominee partner and then you can be more relaxed.
Please note that in case you are not going to bank in Canada but open an account for your Canadian-based LP in another country, having a Canadian partner is not obligatory. Why we advertise the opportunity to register an LP in Ontario in particular is because the corporate legislation in the Canadian province offers the most inviting conditions to foreign nationals wishing to establish business companies in Canada. Without doubt, Ontario is one of the most advanced provinces in Canada with huge production facilities, vibrant trade, and a well-developed service industry. Many banks are also located in Toronto as well as other cities in Ontario.
Registering an LP in Canada is an attractive opportunity to consider especially given the fact that you can do it remotely. With professional assistance, you also can set up a bank account in Canada from the comfort of your home.