It is not uncommon for overseas companies to open branches in Canada, but it is also a very good choice for overseas companies to start a business and open a branch in Canada.
The so-called branch of a company only has the executive function, is completely under the command of the headquarters, and has no right to start new business on its own, which just fits Chaochao's current state of not wanting to manage anything, not being middle-aged, but already retired in mind. Secondly, the management of the branch is only responsible for reporting all operating conditions to the head office, obeying the head office, and the head office bears all funds and losses. For Chaochao, who has no business experience for a day, not having management rights is actually in the interests of the company. At the same time, since the entire operating model of the branch is synchronized with the head office, it is basically a clone of the head office overseas. Establishing a branch first actually helps the company open up the local market and promote its own brand. On the contrary, if a branch is established right away, the business and management are not synchronized with the parent company, and it is difficult to promote the parent company. Take TD Bank, which has the largest network in Canada, as an example. Since there are branches everywhere, it is convenient for customers to go there to handle business, and it also uses its presence to advertise itself. For companies that intend to settle in Canada, opening a branch can enhance overseas recognition and lay a solid foundation for future development.
So what materials do you need to open a branch and what review steps do you need to pass? In fact, you only need to provide the business license, certificates, and all relevant documents of the domestic head office like Chaochao, and find a professional. After the documents are submitted, it usually takes only 5 working days to get approval. However, I would like to remind you that any overseas company landing in Ontario must find a Canadian citizen or PR as an agent. Of course, the requirements vary from province to province. For example, British Columbia does not have an agent requirement. If you don’t know anyone in Canada, you can consider starting in British Columbia.
Although the advantages of a branch cannot be underestimated, there will also be disadvantages after it develops to a certain scale. Take taxation as an example. Basically, all expenses and income generated by the branch are paid and handled by the head office. Since it cannot issue invoices independently, it naturally does not have to pay taxes to the Canadian government. However, as the business grows and the branch develops to a certain extent, the head office will have full remote control over the inflow and outflow of funds, which will inevitably affect efficiency. However, if it handles it by itself and issues invoices independently, each income must first be taxed according to local standards, and then together with the head office's annual income, it must pay taxes domestically. Being taxed twice is really painful, which is why many people turn to registering subsidiaries after the branch is thriving, separating the business and operations from the parent company, not only avoiding secondary taxation, but also obtaining a certain degree of local tax exemptions. We will introduce the specific advantages and registration requirements of subsidiaries in detail in the next issue.
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