Many businesses have been expanding into foreign territory in the last few years, and a lot of companies have set their sights on Canada. It's a fantastic place to set out, especially for US businesses that don't have a great deal of experience when it comes to expansion. The economic landscape is strong and steady, the workers are skilled and knowledgeable, and the process—while not completely pain-free—is somewhat familiar to US citizens. If you're considering expanding business into Canada, here's a bit of advice for you.
1. Get to Know the Laws
First things first—you'll be in a brand new environment, and while some of the laws and regulations will seem familiar, it's critical to understand where the differences are and how it effects the way you do business. It's best to start researching federal laws when expanding business into Canada, since you'll be registering with federal authorities anyway. You can consult a legal expert who’ll help walk you through the various differences—and don't forget, some laws vary depending on the province you're in.
Primarily, as a business, you'll want to be familiar with tax and employment laws, as well as health and safety codes and human rights policies. There's a lot to go through, but your research will be rewarded since it's much easier to expand when you know what to expect and how to operate in your new environment.
2. Research the Market
You'll want to take the time to research the market and environment you're going to be in as well, looking into everything from a market entry strategy, to your competition, to the available talent in the area. This could effect the location you'll choose when expanding your business into Canada, so you'll want to be fairly familiar with the region when you begin to establish yourself.
Because it can be challenging dealing with a new environment, you'll want to get a feel for the culture as well, as many things can effect your business, such as national or religious holidays, market rates for certain skill sets, accessible public transportation for employees, and other details of that nature. The more prepared you are going in, the smoother your transition will be.
3. Establish an Administrative Presence
Once you feel confident expanding your business into Canada, plan in hand and goals in sight, it's time to talk to the Canadian Revenue Agency. Effectively, they're the federal authority when it comes to businesses and taxes (much like the IRS) and you'll need to register your business with them. This comes with a lot of paperwork and some careful consideration as to your official classifications, but once you're complete, you'll have a business number and can begin considering various program accounts you might need like payroll deductions, corporate income tax, or GST/HST. After this, you'll want to establish a banking infrastructure and make sure you have the appropriate accounts necessary. This can take weeks, or even months, depending on how complex your filings are.
4. Engage an EOR
Expanding business into Canada can be frustrating for many companies, especially those who don't want to have to go through the trouble of registering all over again. Luckily, there's a simple solution. When you deal with an EOR (employer of record), you can skip certain procedures and get straight to focusing on your goals.
An EOR is an already registered company that can act as the legal employer of your workers. Since they already have a Canadian presence, all they need to do is contract those employees to you—best of all, they'll handle all HR and payroll tasks associated with them, which saves you a great deal of time and money. They'll ensure compliance, file your taxes, and manage any and all applicable benefits. If you're expanding business into Canada, you'll want to talk to them.