Feb. 3, 2015
Canada is a globally competitive country and one of the most cost-effective markets in the world for American businesses to enter.
If you are considering an expansion internationally, here are five important issues involved in doing business in Canada:
- Universal health care is paid for through taxes, so businesses in Canada don’t have to bear the direct costs.R & D tax credits. Federal and provincial Canadian governments support research & development through agencies, financing programs, tax credits and deductions. Tax credit rates vary from 20 percent to 30 percent of expenditures, and each dollar of tax credit reduces one dollar of federal tax.
- Language. Two official languages are spoken in Canada — English and French — although the majority of residents speak English. The exception is Quebec, where about 80 percent of the population speaks French as their first language.
- Government. Canada has two primary levels of government — federal and provincial. There are 10 provinces and two territories with their own governments. The federal government deals with trade regulation, taxation, banking, immigration, health care and unemployment. Provincial governments can influence business activities through direct taxation, labor law, natural resources, education, and municipal affairs.
- Environmental and social issues. As a whole, Canadians are concerned with issues such as global warming, acid rain, pay equity and minority rights. Chances are, they’ll expect your company to share their concerns.
©2015
Stambaugh Ness provides services internationally with the support of our independent membership in the BDO Alliance USA. It is crucial to consider the legal, tax and cultural ramifications of doing business in Canada, including minimization of taxes and meeting complex international compliance obligations. Contact Darren W. Welker, CPA, CIA, Managing Principal of our Manufacturing & Distribution Group or Tax Director Jennifer G. Nelson, CPA, MBA for help navigating the global marketplace.
