Partnership registration in Ontario allows non-residents of Canada to select a reputable, respected and safe jurisdiction for their business, enter the international market and open bank accounts quickly in both Canadian and US dollars. If the business does not receive any income in Canada, you will not be liable to any Canadian taxes.
A Canadian partnership is ideal for foreign or offshore businesses selling goods or services worldwide into USA, EU etc who are seeking easy access to the US and Canadian banking system and major international payment processors such as Stripe, Square and Wise that accept Canadian businesses (subject of course to the criteria of each company)
Other clients register Canadian partnerships for the ease of access to banks such as CIBC, Bank of Montreal and Royal Bank of Canada, or for the relatively easy remote account opening in Europe and USA due to Canada’s excellent reputation.
Canada also has no public register of beneficial ownership for partnerships, making this option attractive for those seeking to keep their personal information out of the public domain. (Beneficial ownership does however need to be disclosed privately for AML checks and to banks)
International Wealth offers you the chance to establish within just 1-2 days an Ontario Partnership that can be used for business purposes not only in Canada, but anywhere across the world. If there is no Canadian income, it is a completely tax free structure. Ready made partnerships with and without bank accounts are also available. You can receive the business details, certified partnership documents, bank account number and online banking access the same day.
The GP or LP registration in Canada is very straightforward, fast, and, at the same time, a less expensive procedure than opening a similar type of business in many other countries of the world. Both individuals and legal entities can be partners in Ontario partnerships. Canadian resident or offshore-based nominees are also available. Read on for further details.
Why Ontario for your Canadian Partnership?
Ontario is one of the most developed and powerful provinces in Canada. This province is located in the central part of Canada and is the second largest in the country, bordering various US states including New York. The capital of the province is Toronto, a metro area which is home to 5.5 million people.
Toronto is a well-developed financial center and is home to the ninth-largest stock exchange in the world in terms of market capitalization. The capital of Canada, Ottawa, is in the east of southern Ontario. Most of Canada’s businesses and financial institutions as well as its federal political capital are therefore concentrated in Ottawa.
Canada – a Prestige Jurisdiction
Canada is a country with a strong economy and respectable tax system. It is respected in the world market and is not on tax blacklists. Even if you put two offshore companies as partners, your company will have a unique Canadian business registration number. Therefore, using a Canadian partnership for business will get your company a positive international image, and there is a legal opportunity to avoid paying Canadian corporate or personal taxes.
FREE EXPERT CONSULTATION
on which jurisdiction is best for
your business, preferred tax regime,
on which jurisdiction is best for your business, preferred tax regime, company structure.
Address of Registered Office
A Partnership will be registered for you in the province of Ontario, which lists on the public register its official mailing address (equivalent to a service or registered agent / registered office address in other countries). Correspondence from local authorities will be sent to this address if it is mailed, although these days most documents are in electronic form.
Our company, Offshore Pro Group, includes the service of providing a suitable office address for one year within the cost of the Canadian Partnership registration package in Ontario, Canada.
Note: If you need to use comprehensive Canadian back-office services for your business, including telephone and fax, address, correspondence receipt and transmission, and even physical desk space and meeting rooms, we can provide them to you at an additional cost upon request.
Organizational Structure of the Canadian Partnership and Responsibilities of the Parties
A Limited Partnership is a legal structure including at least two partners that may engage in any lawful activity. One LP partner is a Limited Partner and his or her liability is limited to the amount of capital invested in the partnership. The second partner is a General Partner and bears unlimited responsibility. LP is the most popular form of business where outside investors or “silent partners” are involved.
A General Partnership or GP is broadly similar, except that all partners have unlimited liability. GPs are generally preferred by banks as they are more transparent and the banks like all partners to have full responsibility. GPs are typically used in online sales, consulting services, web auctions, web design, affiliate marketing and many other industries.
Any of the partners can be both individuals or legal entities. They can be resident anywhere in the world.
Opening a Business Bank Account for a Canada Partnership
If you wish to open a business account in a Canadian bank, it is not advisable to use an offshore company as a partner. A foreign company from other jurisdictions is acceptable, but preparing documents for a legal entity partner will take more time and will not provide the same speed and cost-effectiveness that an offshore company would ensure.
To open bank accounts in Canada, we recommend you to register a Canadian partnership using a Canadian resident physical person as nominee. This is faster and more workable for the local banks. This nominee can sign a separate contract with you or your offshore company whereby they cede all rights to you, or alternatively the partnership agreement can be structured directly in a way to protect the other partners.
The best structure depends on the circumstances of your business – for example, whether you would like the ultimate beneficial owner’s name shown as a partner, or you prefer to keep this information private. Please consult us on your individual circumstances, or our legal consultants can work directly with your trusted professional advisers.
Provided there is a Canadian resident partner (such as our nominee who is already known to the banks) then we have special arrangements with the banks to conduct remote identification for the foreign partners. This is conducted either via video-conferencing and/or via certification by a local notary, depending on the Canadian bank involved. Procedures differ slightly between the major banks.
Of course there is no obligation for the partnership to open an account in Canada. If the account is opened outside Canada, there is no need to use a Canadian Resident Nominee. Popular options include US banks, and European EMIs such as Wise (formerly Transferwise) that offers virtual accounts in many countries worldwide.
Please note our firm does not open accounts at Wise directly – this would be for you to do online after we set up the partnership. Wise is only suitable for mainstream businesses that fit within their risk profile – but in the case of higher risk businesses we can recommend suitable virtual accounts at EMIs with higher risk appetite.
Many clients also choose Canadian partnerships in order to open merchant accounts for online sales. For example, Stripe is a popular merchant processor and Canada is the only country outside the USA itself where Stripe can settle payments directly in USD. A Canadian partnership is therefore an excellent intermediary vehicle for selling from offshore into the US market.
We generally have ready-made partnerships with existing bank accounts available. The advantage of that is you only have to pass our internal due diligence and then you can receive the business details, certified partnership documents, bank account number and online banking access the same day. You can start to trade immediately, and meanwhile we will start the process of amending the partnership agreement and informing the bank of the new partners.
USD and Foreign Currency Accounts in Canada
Canada and the USA have a very special relationship in many respects, and this includes banking. Although the Canadian and US dollars are of course different currencies, the banking systems are integrated to such an extent that basically every bank in Canada offers USD accounts as default. Transactions may be made through the ACH system, so there is no need to use SWIFT for transactions between the USA and Canada.
However, like in the USA, Canadian banks are not strong on accounts in other currencies. If you are looking for an account in Euro, for example, it is better to open an account in Europe for your Canadian partnership. Canadian banks do not offer EUR accounts.
Canadian Resident Nominee
You will certainly need a Canadian resident as a professional nominee partner if you want to bank in Canada. They perform important duties and actually represent your company before local authorities and banks. This is 100% necessary if you plan to open an account in Canada and also very useful in all other instances to prove that the business has real substance, mind and management in Canada.
It’s important to note that the local nominee is bound by Ontario and Canadian anti-money laundering laws, regulations etc. In order to represent you and take full responsibility for your business transactions in the eyes of the banks, this person must be 100% sure that you are running a legitimate business.
IMPORTANT: Please do not take the term “nominee” to imply that this person will not ask questions. That would be absolutely impossible and irresponsible in today’s regulatory environment. The relationship is built on trust and trust will develop over time based on track record. Please expect that all transactions in and out at least initially will need to be clearly documented and verified to normal global compliance standards. The local partner is responsible for satisfying the bank that everything is above board.
Taxation of Ontario LPs and GPs
A partnership in Ontario is not considered a legal entity in Canada, and therefore is not regarded as a taxable entity in its own right. It is fiscally transparent, similar to an LP in the UK, or an LLC in the USA. That means, simply put, profits should be declared on the tax returns of its partners. If there is nothing earned in Canada and none of the partners are resident in Canada, then there is nothing to declare or pay in Canada.
Also, Ontario Partnerships are not required to file annual reports and income tax returns unless they have declarable income, although they are required to keep financial records, which under special circumstances may be requested in the future.
Partners pay taxes based on the tax rates of the jurisdictions in which they are considered as residents. This applies to both legal entities and individuals.
If there is a resident of Canada among the partners, then their part of the profit must be reflected on their personal tax return and they must pay income tax. In the case of Canadian nominees, they are not receiving funds for their own account, and there will be no Canadian source income, therefore they only pay tax on the fees they actually receive for performing their services.
Because it is not a taxable entity, an Ontario Partnership cannot benefit from Canada’s bilateral double taxation agreements with other countries.
Main Advantages of a Partnership in Ontario, Canada
- You own a business in a prestigious Canadian jurisdiction;
- A resident of any country can register a partnership in Canada;
- It is possible to open an account with a Canadian bank if you use the services of a professional nominee partner resident in Canada;
- There is no income tax if partners run their business outside of Canada;
- Minimum and maximum partnership capital is unlimited;
- No corporate tax;
- No obligation to file corporate tax returns, and no obligation to perform audits.
Tip: If you are considering business as a stepping stone to immigration and permanent residency in Canada, then look into Canadian corporations. They can help you build a credit history in Canada and ease your way to temporary and then permanent residency status.
Name of a Partnership in Ontario
- The name by which the Limited Partnership is to be named must end with the mandatory words: “Limited Partnership” or the abbreviation “LP”. A GP does not have any such limitations, and may or may not choose to include “General Partnership” or “GP” as part of its registered name.
- The name of the Partnership must not include the name or company name elements of the Partner.
- The name may be in English or French or have a name consisting of words in two languages at once.
- It is forbidden to use in the Limited Partnership name the words used in the names of government agencies and institutions operating under a state license. For example, academy, university, trust, bank, stock exchange, insurance, and similar.
The Partnership Registration Service in Ontario, Canada Package:
- Check of the name availability;
- Partnership registration;
- Registered official mailing address for 1 year;
- Receiving of letters from provincial or federal authorities for 1 year;
- Registered agent services for one year;
- All government fees;
- Electronic copies of partnership documents.
Registration fee for partnership only without nominees: $3,000
Should you need the services of a professional partner and director, the cost of the partnership registration with a professional partner and director will be $6,250 USD.
The service of remote opening of a bank account in a Canadian bank is an additional $5,000 USD. For account opening in Europe, Asia or offshore jurisdictions please contact us to discuss your requirements.
|Services of professional partners, directors, agents, managers, per year||$3,250 USD|
|Hard copies of original documents by courier||$650 USD|
|Extra rush fee for ready made company including change of partners and updating all records||$800 USD (without bank account)$3000 USD (with bank account)|
|Legalization of Constituent Documents|
|Notarization of documents||250 USD per document||From 3-7 business days|
|Legalization of documents by Canadian embassy||650 USD per document||From 7-28 business days|
|Copies certified by apostille in UK (Canada does not issue apostilles)||400 USD per document||From 5-10 business days|
|Preparation of constituent documents|
(Preparation and notarization of the first copy of constituent documents (Master Business License, Partnership Agreement, Power of Attorney, Assignment of Partnership Interest) for one non-resident partner is included in the cost of registering a general partnership in Ontario).
|125 USD per document|
|Preparation of additional corporate documents||750 USD per hour|
|Making changes to constituent documents||750 USD per set|
|Corporate embosser||250 USD||From 2 business days|
|Pocket embosser||225 USD||From 2 business days|
|Round seal with automatic tooling||240 USD||From 2 business days|
|Gold embosser stickers (60 pieces)||125 USD|
|Silver embosser stickers (60 pieces)||125 USD|
|Red embosser stickers (60 pieces)||125 USD|
|Canadian phone number with SMS-to-email service||450 USD per year|
|Concierge services in Canada, including visa support, hotel reservation in Toronto, booking airline tickets to/from Canada, follow me service and organization of tours (excursions, shopping, business, etc.), translation services (from 3 hours).||185 USD per hour|
|Pickup at Toronto Airport and transfer to your hotel on the day of arrival||250 USD per trip|
|Transfer from your hotel to Toronto airport on the day of departure||250 USD per trip|
|Canadian virtual office services per year||2,750 USD|
|Accounting services for partnerships (including registration of business transactions and bank entries, preparation of the annual report on financial operations in the bank, preparation of a newsletter according to the Revenue Canada form)||No less than 2,250 USD a year|
|Courier delivery||No less than 150 USD|
Partnership Registration Procedure in Ontario, Canada
The very first and basic step to becoming a Partner in Ontario is your wish to do it! In that regard you should contact us at email@example.com for a free consultation if you are not yet fully decided. You can also reach us via WhatsApp.
Once you inform us you are fully decided, we will issue an invoice for you to make the payment for the Partnership registration service in Ontario. This forms a legal, binding contract. You may pay by card, crypto, Western Union, or bank transfer. Next, we will move on to collecting the information needed for the Limited Partnership registration.
In order register a Limited Partnership in Canada, you will need the following documents for each Partner or Beneficial Owner:
- A color copy of the passport with a signature and photo.
- Proof of residence. This may include copies of your utility bills or bank statements (credit card statements) that reflect your valid address of residence which is required for the proof of residence.
Note: This document must not be older that 3 months by the time you submit it
- Filled out and printed Business Description Form. This point is very important, and it is desirable to describe your business-to-be in the greatest detail possible
- Your suggested partnership name. Please provide several options if possible.
Note: Additional identification or other documents may be requested by the Registrar, local agents or banks to verify the identity of the applicant and all partners when registering a Partnership in Canada.
Once all documents are collected, it will take about 3 business days to register a General Partnership in Ontario, Canada. Limited Partnerships take slightly longer as they have to go through a special process.
Please feel free to request this service from our friendly consultants and we will get back to you promptly. Should you wish, we will be pleased to arrange for an online preliminary consultation.