Canada has a highly developed economic system and a company registered in this country receives international upmarket status automatically. There is a standard tax system in the country that comprises all Canadian entrepreneurs who are obliged to pay tax on income received in Canada and abroad.
Despite the fact that Canada is not considered as tax heaven and it does not offer opportunities for offshore company formation, it is possible to register a company with zero tax rates imposed on profit received beyond Canada. It is called a Limited Partnership (L.P.).
What is Limited Partnership?
L.P. Company is Partnership Company that has at least two shareholders or more. One of them becomes General Partner and the rest become Limited Partners. The function of L.P. Director can be performed by General Partner. Shareholders of L.P. Company can be entities and persons being residents of any country. Nominee shareholders are also acceptable. Requirements for the position of L.P. Secretary are not identified. All information about real owner of partnership is strictly confidential and it is available for registered company service provider only.
Limited Partnership founded in Canada is not taxed in case it is created by foreign shareholders who conduct commercial activity beyond Canada and do not gain any income on the territory of this country. In this case according to Canadian legislation do not consider L.P. Company as a separate entity for taxation purposes. Taxes imposed on profit of L.P. are paid by its shareholders according to their residency in ratio correspondent to the interests they possess. However, in this case double taxation treaties signed by Canada with other countries are not applicable to L.P. Companies because they are not Canadian tax residents.
It takes from 12 to 15 business days to register L.P. Company and full package of documents is available in 6-7 days. The authorized share capital is 1000 $CAD and requirements to minimum contributed capital are not identified. Please, note that the title of company must end with «Limited Partnership» and it must not contain the words like “Trust”, “Bank”, “Insurance”, etc.
Corporate support is active for L.P. Company within one year after registration – it means that services of application of state fees, nominee service and registered office address in Canada will be paid for one year.
Another advantage of L.P. Company registered in Canada is that there is no requirement to submit Annual Return and Financial Statement to the State Register of Enterprises and Organizations. However, a company has to make financial reports and keep them.
You will make a right strategic decision if you register your company in Canada as far as the jurisdiction is not found in black lists of other countries and it provides you with opportunities to cooperate with residents of any country.
A company registered in Canada is an effective tool that is applicable in various business spheres. For instance, it can be used for procurement of products in the European Union and selling them in other countries including Eastern Europe and Russia. The fact of export is obvious in this case and sellers will not have doubts about VAT documents.
The list of constitutive documents of Limited Partnership Company in Canada:
- “Proof of Filing” – registration certificate notarized in Canada.
- “Certificate” – shareholders’ agreement regarding company management.
- Minutes of first meeting of officers – protocol of the meeting of founding parties on assignment of company’s officers.
- General Power of Attorney – two general authorities, one of them is apostilled.
- Agreement for management of a company by Nominee Officers and indemnification of the Nominees.
- Interest Ownership Certificates.
- Company stamp.