Conducting business and expanding on an international stage has become increasingly difficult to navigate, with complex and ever-changing tax requirements, regulations, and legislation. This places a huge burden on companies that are looking to do business across borders. At Fuller Landau, we provide international tax planning and compliance services to foreign-owned businesses coming to Canada (inbound), and Canadian-owned businesses expanding abroad (outbound). Our goal is to help you pay the least amount of tax possible.
Over the last few years, we’ve seen a growing number of American companies expanding north to open Canadian branches or subsidiary offices. But why? Here are 7 competitive advantages explaining why U.S. companies are flocking north to Canada:
1. Stable Fundamental Infrastructure
With a welcoming, pro-business climate and one of the most stable banking systems in the world, the Canadian economy is built upon a commitment to strong public finances and long-term economic goals through infrastructure. This long-term economic thinking makes Canada a stable and lucrative investment for foreign-owned companies.
2. Vast Natural Resources
Canada has the second-largest land mass of any country on Earth, and within these vast lands are a wealth of natural resources. Oil, gas, hydro-electricity, fresh water, lumber, and minerals are readily available and can be locally sourced, making Canada an ideal country for companies across a range of industries including manufacturing, engineering, and construction.
3. Highly Skilled Labour Force
According to the Organization for Economic Cooperation and Development, Canada has the most highly educated workforce among members of the OECD, with almost 50% of our working age population having completed post-secondary education (compared to an average of only 28% among all OCED countries). This is a huge competitive advantage for Canada, and for companies seeking to operate within our borders.
4. Excellent Place to Live and Raise a Family
Canada is infamous among Americans for our “free healthcare” system, but that’s just one of many advantages of life in Canada. Our low crime rates, world-class education system, multi-culturalism, and affordable costs of living make Canada an excellent place in which to settle down. Many foreign business owners who move here on temporarily to oversee an expansion find themselves staying here much longer than they had originally planned.
5. Extremely Profitable Local Market
The Canadian economy is not only stable – it’s also fairly affluent. The median family income, according to Stats Canada, is $78,870, giving the average Canadian household a good amount of disposable income.
6. Competitive Corporate Tax Rates
Part of Canada’s stable and forward-thinking economic plan includes attracting foreign interests and offering them a conducive business environment in which they can thrive. Generous and highly-competitive tax rates, exemptions, and credits make Canada an ideal choice for our U.S. neighbours. While the rates and exemptions differ depending upon your business and industry, they prove an excellent boon for businesses looking to expand across the border.
7. Location, Location, Location
With such close proximity to the U.S., and significantly lower business tax costs, Canada is an ideal location for our American neighbours to set up business. Strategically, Canada is also considered the crossroads between North America and the surging Asian markets.
If You’re Crossing the Border, Contact Fuller Landau
Our international tax planning and compliance experts are fully versed on the process of helping foreign businesses expand into Canada. We can ensure that your business is fully compliant with local tax regulations, and that the business is structured to ensure eligibility for all available exemptions and credits.
To book a free consultation with Fuller Landau’s International Tax team, contact us today.