Incorporate a business on open work permit WHV

[Scryden]

Hello all,

I have a question about incorporating a business in Calgary, Alberta, but I think my situation is kind of unique. Therefore I would like to ask here for info and advice.

I have a Canadian partner who lives in Calgary, Alberta. I am moving in with my partner. I am from the Netherlands and have a Working Holiday visa with an open work permit. I am moving out mid June. The reason I currently have a permit for a Working Holiday visa, is because according to CIC I do not yet qualify for a Family Class visa, because me and my partner have not been living together for atleast 12 months yet. CIC adviced us to request a WHV, register myself on my partners address and bank account on the day of my arrival, and then, after 12 months, request the Family Class visa.

My current Dutch employer did me an offer to stay employed with them while I live in Canada. I am an IT engineer and can log on remotely to all of our systems. I do not want to stay under an employee contract with them but would like to incorporate my own business in Calgary, so my current employer can hire me and I can simply send them invoices for the work I do for them.
My employer is a Dutch company, originated in the Netherlands and does not do any business in any way with Canada or Canadian companies. Our clients are solely Dutch.
In case this is necessary to mention: I do not plan to hire a staff, open an office building or anything like that. I want to register the business on the home address of my partner and I will be the only employee of my business.

My question is: will I be able to incorporate my own business on a Working Holiday open work permit? Does my registered partnership with a native Canadian provide me with any benefits regarding opening a business?
If the answer is yes, is there a step-by-step guide available somewhere out there that can guide me through the entire process of incorporating my business, registering EIN and HST numbers, pension plan etc.?

Thank you in advance for your kind help.

 

[scylla]

To the best of my knowledge, you can only incorporate a business if you have a Canadian or permanent resident partner (I don't mean partner as in common law partner, I mean business partner - I believe they must have a financial stake in the business).

 

[Scryden]

What if my partner registers the business name. He is a native Canadian. Can I use it as well when he is the owner?

 

[kateg]

To the best of my knowledge, you can only incorporate a business if you have a Canadian or permanent resident partner (I don't mean partner as in common law partner, I mean business partner - I believe they must have a financial stake in the business).

There are some restrictions for foreign-owned news media, but the requirements for directors varies by province.

Federal, Alberta, Manitoba, Newfoundland, Ontario, and Saskatchewan require 25% of the directors to be resident Canadians. The other provinces do not.

https://www.newbusinessnow.com/article/options-for-foreign-corporations-wishing-to-do-business-in-canada/

 

[Scryden]

What if I choose to keep my current contract with my Dutch employer (instead of incorporating a business), I will remotely work from Canada but for a company in the Netherlands. Is this allowed on a Working Holiday open work permit? Or does it have to be a Canadian employer? And because I don't pay taxes in the Netherlands anymore (since I don't live there anymore), my employer will only transfer me my salary and it is my own responsibility to pay Canadian taxes, pension plan, health care etc. Any advise how to do this?

 

[kateg]

When I came as a student, I told them that I intended to work full-time for my foreign company. They notated on my account, and informed me that as I was not participating in the Canadian labour market, that it did not count.

If you look at the IRPA, it specifically spells out for business visitors what isn't working in the labour market:

(3) For the purpose of subsection (1), a foreign national seeks to engage in international business activities in Canada without directly entering the Canadian labour market only if

(a) the primary source of remuneration for the business activities is outside Canada; and

(b) the principal place of business and actual place of accrual of profits remain predominately outside Canada.

They give a few specific examples (purchasing Canadian goods for foreign business, training, selling goods not to the general public), but don't list all specific exemptions.

Work permit, as described in the IRPA, is defined as such:

work permit means a written authorization to work in Canada issued by an officer to a foreign national. (permis de travail)

I've asked repeatedly, and seen several sources that confirmed that. An older enforcement manual stated the following:

R187(3) provides the general criteria that must be met, and R187(2) provides specific examples, which are meant to be illustrative

In other words, examples, not the sole cases.

General Criteria:
• There must be no intent to enter the Canadian labour market, that is, no gainful employment
in Canada.
• The activity of the foreign worker must be international in scope, that is, there is the
presumption of an underlying cross-border business activity, e.g. after sales service;
• There is the presumption of a foreign employer:
o The primary source of the worker’s remuneration remains outside Canada
o The principal place of the worker’s employer is located outside Canada
o The accrual of profits of the worker’s employer is located outside Canada.

In other words, work where you are telecommuting and not entering the Canadian labour market does not require a work permit. If your work does involve entering the labour market, an Open Work Permit permits you to do so.

is my own responsibility to pay Canadian taxes, pension plan, health care etc. Any advise how to do this?

Run an online calculator to estimate the taxes you will owe, set aside another 15% on top of that, then pay someone to do your taxes who knows what they are doing.

 

[Scryden]

When I came as a student, I told them that I intended to work full-time for my foreign company. They notated on my account, and informed me that as I was not participating in the Canadian labour market, that it did not count.

If you look at the IRPA, it specifically spells out for business visitors what isn't working in the labour market:

They give a few specific examples (purchasing Canadian goods for foreign business, training, selling goods not to the general public), but don't list all specific exemptions.

Work permit, as described in the IRPA, is defined as such:

I've asked repeatedly, and seen several sources that confirmed that. An older enforcement manual stated the following:

In other words, examples, not the sole cases.

In other words, work where you are telecommuting and not entering the Canadian labour market does not require a work permit. If your work does involve entering the labour market, an Open Work Permit permits you to do so.

Run an online calculator to estimate the taxes you will owe, set aside another 15% on top of that, then pay someone to do your taxes who knows what they are doing.

Thank you so much for your info. This is very helpful!

I want to explain the following income example to you. Hope you can tell me if this is correct or add additional information.

I currently make 45.360 euros a year. According to the current exchange rate between euro and CAD, this is roughly 68.000$. The federal tax in Canada in this income bracket is 22%. Alberta's province tax is 10% up to 125.000$ anual income. So 32% tax on my anual income in total.
68.000$ * 0.68 = 46.240$ <-- This is for income tax only. How much a month is a pension plan? I assume I don't need an unemployment insurance since I'm theoratically a visitor. How much will the healthcare plan be on a monthly base? Canadians have free healthcare but I assume this is not for visitors like me.
Any other stuff I need to pay for?
And how do I pay for my taxes? Do I need to sign up somewhere? To who do I transfer the taxes? This part confuses me lots.

 

[kateg]

I'm not able to give tax advice, but I'd encourage you to check out the following page:

http://www.cra-arc.gc.ca/selfemployed/

Specifically, you will want to look at this page:

http://www.cra-arc.gc.ca/tx/bsnss/sm/sttng/sl-eng.html

 

[Viz]

Hi,

Can anybody let me know if it is possible to work as Agency operator/Independent contractor on a open work permit.

Thanks

 

[Godswillairtravel]

You can encage in business as Non-Resident Business incorporation. That will allow you to set up business in BC province. Since you are already in Canada, you can work it with your partner who was already established in Canada to set up business and she will be one of the director. Of course, you can do HST etc. Please I can refer you to Business Development Centre (BDC). You can call: 1877 2262921. Please ask of Mr. JOHN. Tell him that Mr. NWALI TOCHUKWU F (GODSWILL AIR TRAVEL & SHIPPING LTD). My personal mobile:+234-805622-7336. Please that firm will solve all the challenges you have regarding incorporating your company .