When setting up a Canadian subsidiary, you have the following three options:

• Corporation: Your business is considered a separate entity, so shareholders are not personally liable for business obligations. 
• Partnership: Either a general or limited partnership is possible. Your business can later get incorporated into an LLC or limited liability partnership. 
• Extra-Provincial Corporation: Incorporation at the provincial level only; your company will not require a minimum number of Canadian workers so that it can be owned and directed from outside of the country. 

Canada Subsidiary Laws

Canadian subsidiary laws vary depending on the province. Some provinces require that a certain number of company directors be Canadian residents. It is therefore essential to know precisely where you would like to set up your business. Note that you need to register in all provinces you would like to do business in if you decide to incorporate under federal law. 

If your Canadian subsidiary faces legal issues, then the parent company will still be responsible for handling them because they are legally the Employer of Record. However, subsidiaries do retain some independence to operate according to the laws and culture of the host country. 

What Do You Need to Form a Canadian Subsidiary?

To establish a subsidiary in Canada, you need time, money, and knowledge to undertake the lengthy incorporation process. You need to find and register a physical office space, open a corporate bank account, and file all the necessary documents. The process can take months, and finding employees will take additional time. 

We recommend the services of HR providers such as HR Options to handle subsidiary laws on your behalf. As the Employer of Record, these companies can bring down the process to days instead of months. You can quickly get your business set up and running while avoiding legal headaches.