How to Start a Business in Markham
A complete step-by-step guide for Markham entrepreneurs — business structure, CRA registration, HST, SR&ED credits, banking and York Region business licensing — written by a licensed Ontario CPA.
Launching a Business in Markham
Markham is Canada's technology capital outside downtown Toronto and one of the most economically sophisticated business markets in Ontario. With over 362,770 residents, a highly educated workforce and a business community anchored in technology, life sciences, financial services, professional consulting and advanced manufacturing — Markham offers exceptional conditions for entrepreneurs who structure their businesses correctly from the start.
More than 30,000 registered businesses operate across Markham, ranging from solo tech consultants working out of Unionville to multinational company Canadian headquarters in the Markham Centre and Highway 7 corridors. York Region's economic profile means Markham entrepreneurs face a specific set of tax and compliance issues: SR&ED eligibility for technology and life sciences businesses, transfer pricing considerations for businesses with US or offshore parent companies, and the T1134 foreign affiliate reporting requirements that apply to Markham's internationally connected business community.
This guide walks through every step required to properly start and register a business in Markham — in the correct order, with Markham-specific context including York Region business licensing, the CRA compliance issues most common in Markham's technology and professional services sectors, and the tax planning strategies that make the most difference for Markham's incorporated business owners.
Partner with Us to Launch Your Business in Markham
At Gondaliya CPA, we have worked with Markham entrepreneurs and technology founders since 2015. Our team serves businesses across Unionville, Milliken Mills, Cornell, Berczy Village, Thornhill and the Markham Centre corridor — from newly incorporated solo consultants to multi-shareholder technology companies preparing their first SR&ED claim.
We are Ontario's most AFFORDABLE licensed CPA firm for business startup accounting. Incorporation is a flat $35 — the lowest in Canada. Annual corporate tax filing starts at $400 including HST. Every new Markham business receives a free one-hour consultation covering their five-year business plan, salary vs. dividend strategy, RRSP room analysis, and the first 50 deductions most new business owners miss in their first year.
- Flat $35 incorporation — federal or provincial, same-day processing available
- SR&ED eligibility assessment — free with annual tax engagement for Markham tech businesses
- CRA account registration — Business Number, HST, Payroll and Corporate Tax accounts
- QuickBooks Online or Xero setup included — no extra charge
- T1134 foreign affiliate reporting for Markham businesses with offshore structures
- 900+ five-star Google reviews from Ontario businesses
- Evening and weekend availability to 9 PM, 7 days a week
Considering a Business Venture in Markham?
Markham's economy is led by technology, life sciences, financial services and professional consulting — sectors where business structure, IP ownership, SR&ED eligibility and international tax planning have an outsized impact on long-term wealth. Getting these decisions right at incorporation is worth significantly more than making corrections in year three. A licensed Markham CPA helps you structure correctly before your first client pays you.
Why Proper Business Setup Matters in Markham
Markham's business community generates one of the highest concentrations of SR&ED claims in Ontario per capita. The federal SR&ED program provides a 35% refundable tax credit on qualifying R&D expenditures for Canadian-Controlled Private Corporations — but claims are regularly reduced or denied at CRA review when the technical documentation is inadequate, when the claiming entity is not structured as a CCPC, or when the ownership structure has inadvertently diluted CCPC status through foreign shareholder participation.
Markham also has one of Ontario's largest Chinese-Canadian, South Korean and Iranian business communities — with a significant number of businesses that have ownership ties, family loans or holding structures involving entities outside Canada. CRA's T1134 foreign affiliate reporting obligations, the T1135 foreign income verification requirements and the thin capitalisation rules on interest deductibility apply to a disproportionate number of Markham businesses. Missing these filings carries penalties of $25 to $500 per month — and the penalties compound until the return is filed.
A licensed CPA who understands Markham's business profile — not just general Ontario compliance — provides structure advice that prevents these problems before they occur. The cost of filing a T1134 late or losing an SR&ED claim to inadequate documentation far exceeds the cost of proper setup from day one.
Markham-Specific Note: The Town of Markham requires a business licence for certain categories of home-based businesses, short-term rentals, taxi and ride-hailing vehicles, body rub establishments and other regulated activities under Markham's Business Licensing By-law. Applications are filed with the Town of Markham Licensing and Permit Services office. York Region has additional regulatory requirements for businesses in food service, healthcare and waste management operating in the regional municipality. These municipal and regional licences are separate from CRA registration and provincial incorporation.
Step 1 — Choose the Right Business Structure for Markham
Business structure is the single most important decision you will make when starting a business in Markham. For technology founders, life sciences entrepreneurs and IT consultants, the choice between incorporation and other structures has implications that extend well beyond current-year tax — affecting SR&ED eligibility, IP ownership, future fundraising, CCPC status and the $1,250,000 Lifetime Capital Gains Exemption available on the eventual sale of qualifying small business corporation shares.
Sole Proprietorship
Operating under your own name or a registered business name. All business income flows directly to your T1 personal return and is taxed at your full marginal rate. No separate corporate return required.
- Lowest setup cost — ~$60 for an Ontario business name registration
- Business losses immediately reduce other personal income
- No annual T2 corporate return required
- Simplest structure for very early-stage testing of a business concept
- No limited liability — personal assets fully exposed to business claims
- Taxed at personal marginal rates up to 53.53% in Ontario
- No access to 12.2% CCPC small business deduction rate
- No SR&ED refundable credit — sole proprietors do not qualify for the 35% refundable CCPC rate
- No Lifetime Capital Gains Exemption on sale of the business
Corporation (CCPC)
A separate legal entity taxed at the 12.2% combined Ontario SBD rate on the first $500,000 of active business income. For Markham technology, consulting and life sciences businesses, incorporation is almost always the preferred structure from day one.
- 12.2% SBD rate vs. up to 53.53% personal rate — significant annual tax deferral
- 35% refundable SR&ED federal credit available to CCPCs — sole proprietors receive only 15% non-refundable
- Limited liability — personal assets protected from corporate obligations
- $1,250,000 Lifetime Capital Gains Exemption on qualifying share sale in 2026
- Salary-dividend flexibility to optimise combined personal and corporate tax annually
- IP and technology assets can be owned at the corporate level with significant tax advantages
- Annual T2 corporate return required (from $400 with a CPA)
- More ongoing compliance — minute book, annual returns, payroll if salary is paid
- CCPC status requires careful management of foreign shareholding percentages
Partnership
Two or more persons operating a business together under a partnership agreement. Common among Markham professional services firms where joint liability is acceptable and the partners prefer pass-through taxation. A written agreement is essential.
- Flexible profit-sharing arrangement between partners
- No double taxation — income taxed once at the partner level
- Lower administrative burden than multiple corporations
- General partners have unlimited personal liability
- Each partner pays personal marginal rates on their share — no SBD access
- No SR&ED refundable credit access at the CCPC rate
- Partnership disputes can destabilise the business without a clear written agreement
Which Structure Is Best for a Markham Technology or Consulting Business?
For virtually every Markham technology company, life sciences startup, IT consultant and professional services business earning over $50,000 per year — incorporation as a CCPC is the correct answer. The combination of the 12.2% SBD rate, the 35% refundable SR&ED credit, the Lifetime Capital Gains Exemption and the ability to retain earnings inside the corporation at the low rate creates a compounding tax advantage that a sole proprietor simply cannot access. Many Markham tech founders delay incorporation unnecessarily — and lose SR&ED claims that would have been worth $30,000 to $100,000 in their first year of R&D activity. Incorporate on day one if you anticipate any qualifying R&D expenditures.
Incorporation Services Starting at $35
Federal or provincial incorporation, same-day processing available. CRA Business Number, HST, Payroll and Corporate Tax account registration all included free when you hire Gondaliya CPA for annual accounting services.
Incorporate Your Markham Business Book Free ConsultationStep 2 — Register Your Business with the CRA
Following incorporation, your Markham corporation requires the appropriate CRA program accounts to operate compliantly. The specific accounts you need depend on your business activities — but most Markham technology and professional services corporations will need all of the following within their first year of operation.
Business Number (BN)
Your 9-digit CRA Business Number is the master account to which all program accounts — GST/HST (RT), payroll (RP), corporate income tax (RC), and import/export (RM) — are attached as sub-accounts. For federal corporations, your BN is created automatically when you incorporate through Corporations Canada. For Ontario provincial corporations, you register your BN through CRA's Business Registration Online.
GST/HST Account (RT)
Register once your taxable revenues exceed $30,000 in any single calendar quarter or cumulatively over four consecutive quarters. For Markham technology and consulting businesses that anticipate B2B revenue, voluntary registration from day one is strongly recommended — you begin recovering ITCs on all software subscriptions, equipment, office expenses and professional fees from the effective registration date, even before the threshold is crossed.
Payroll Account (RP)
Required if you hire employees or pay yourself a salary from your Markham corporation. Your payroll account manages CPP contributions (including CPP2 on earnings above the YMPE), EI premiums and income tax source deductions — which must be remitted to CRA monthly, twice-monthly or weekly depending on your average monthly withholdings. Directors are personally liable for unremitted payroll deductions.
Corporate Tax Account (RC)
Your T2 corporate return must be filed within six months of your fiscal year-end. The balance of tax owing is due three months after year-end for CCPCs meeting the SBD conditions. Markham technology companies that file SR&ED claims receive their refundable credits within 60 days of filing a complete T2 with a concurrent T661 SR&ED claim — one of the fastest cash recovery mechanisms available to Canadian businesses.
SR&ED Program Registration
While not a separate CRA account, SR&ED claims are filed as part of your T2 corporate return using Form T661 (Scientific Research and Experimental Development Expenditures Claim). For qualifying Markham technology and life sciences businesses, the 35% refundable federal credit on eligible expenditures — plus Ontario's 8% additional refundable credit — can represent the single largest cash inflow in a startup's first three years. You do not need to be profitable to receive the refundable credit.
T1134 and T1135 — International Reporting
Markham's internationally connected business community has a higher-than-average incidence of T1134 foreign affiliate reporting obligations (for corporations owning shares in foreign affiliates) and T1135 foreign income verification requirements (for businesses or shareholders with foreign assets exceeding $100,000 CAD). These are annual information returns with penalties of $25 per day late (T1135) and $500 per month late (T1134) — up to $24,000 per unfiled year. Many Markham business owners are unaware these filings apply to them.
CRA Representative Access: To allow Gondaliya CPA to communicate with CRA on your behalf, add representative ID JT8VL2H to your My Business Account. This authorises our team to file returns, respond to CRA queries and resolve issues without requiring your involvement on every communication. We provide step-by-step onboarding instructions for the authorisation process.
Step 3 — Set Up Banking and Bookkeeping for Your Markham Business
A clean, well-maintained financial record is the foundation of every SR&ED claim, CRA audit defence and investor due diligence process. For Markham technology and professional services businesses — where the business may be valued at a revenue or EBITDA multiple on an eventual sale — the quality of your financial records directly affects your exit value. Starting with proper bookkeeping in month one costs far less than reconstructing three years of records before a transaction.
Business Bank Account
Open a dedicated business chequing account immediately after incorporation. Every corporate revenue receipt and business expense payment should flow through this account. For Markham's technology sector, virtual business banking platforms including Relay, Wealthsimple Business and RBC's digital business offering provide lower-fee alternatives to traditional branch banking — with better API integration for QuickBooks Online and Xero than traditional bank feeds. Traditional banks (RBC, TD, Scotiabank, BMO, CIBC) all have Markham branches if in-person banking is preferred.
Accounting Software Setup
Gondaliya CPA configures QuickBooks Online or Xero for all new clients — with chart of accounts tailored to your specific Markham industry, HST tracking to separate collected and paid tax, and project tracking for businesses that want to allocate expenses to specific SR&ED projects from the outset. SR&ED claims are significantly stronger when supported by project-coded expense records maintained contemporaneously throughout the year rather than reconstructed at filing time.
- Open a dedicated business bank account before the first corporate transaction
- Get a separate business credit card — all business expenses trackable and ITCs claimable
- Set up QuickBooks Online or Xero with SR&ED project tracking if R&D activity is expected
- Enable HST tracking from day one — separate collected and paid amounts automatically
- Reconcile bank accounts monthly — not annually at year-end
- Document all shareholder loans and inter-company transactions with written agreements
- Keep contemporaneous records for all R&D activities if SR&ED is expected — CRA requires documentary evidence of the work performed
SR&ED Documentation Warning: The most common reason SR&ED claims are reduced or denied at CRA review is inadequate contemporaneous documentation — not insufficient qualifying activity. If your Markham technology business is conducting software development, process innovation or technical problem-solving, document the work as it happens. Meeting notes, Git commit logs, test records, technical reports and time allocation records maintained throughout the year are far more compelling to a CRA SR&ED auditor than records reconstructed at filing time.
Step 4 — Understand Your Tax Obligations in Markham
Markham's technology and professional services economy creates a specific set of tax obligations and planning opportunities that differ meaningfully from other Ontario cities. Understanding these before your first fiscal year-end — not after — ensures you capture every available benefit and avoid every avoidable penalty.
Once registered, you collect 13% Ontario HST on taxable supplies made to Ontario clients. For Markham's technology businesses serving clients across Canada and internationally, the Place of Supply rules are critical. A Markham SaaS company selling to an Alberta client charges 5% GST — not 13% HST. The same company selling to a British Columbia client charges 5% GST — not 13%. International clients generally receive zero-rated services, meaning you charge 0% but can still claim full ITCs on all your Canadian expenses. Configure your accounting software to apply place-of-supply rules automatically by client billing province. Charging the wrong rate creates either an overcollection (which you still must remit) or an undercollection (which creates a CRA shortfall liability).
The SR&ED program is the most significant tax incentive available to Markham's technology and life sciences businesses and one of the most consistently under-claimed. A qualifying CCPC can recover 35% of eligible expenditures as a refundable federal credit — meaning CRA pays you cash even if you have no taxable income. Ontario adds a further 8% refundable Ontario Innovation Tax Credit on the same base, bringing the combined recovery to 43 cents on every qualifying dollar spent in Ontario. Eligible expenditures include salaries of employees engaged in qualifying R&D, contractor costs at 80% of invoiced amounts, and eligible materials consumed during R&D. For a Markham software company with $400,000 in qualifying salaries, the combined SR&ED credit could represent $172,000 in cash refund in the first filing year. We assess SR&ED eligibility as part of every Markham technology client engagement at no additional charge.
All reasonable expenses incurred to earn business income are deductible for Markham corporations. Common categories for technology and professional services businesses include: home office expenses (if you operate from your Markham home), vehicle expenses with a mileage logbook, software subscriptions (100% deductible in the year incurred under the Immediate Expensing rules for CCPCs), computer equipment under Immediate Expensing ($1.5M annual limit for eligible CCPCs), professional development and conference costs, research and database subscriptions, and meals with clients (50%). For Markham's owner-operated technology businesses, the CCA class applied to software development tools and internally developed software (Class 12 at 100%) vs. general-purpose computing equipment (Class 10 at 30%) makes a meaningful difference to first-year deductibility.
For Markham owner-operators, the salary vs. dividend decision involves a dimension that does not apply in most other Ontario cities: the interaction between how you pay yourself and your SR&ED claim. SR&ED eligible expenditures are calculated based on salary paid to eligible employees and specified shareholders performing qualifying work. If you pay yourself entirely by dividend, your personal compensation does not form part of your SR&ED claim base — reducing your eligible expenditures and therefore your refundable credit. For Markham technology founders who are personally performing qualifying R&D, paying at least a portion of your compensation as salary — even if dividend income is generally more tax-efficient — may increase your SR&ED claim enough to more than offset the additional combined tax. Use our free Salary vs. Dividend Calculator as a starting point, then model the SR&ED interaction with your CPA.
Markham's technology and professional services businesses tend to retain more earnings inside the corporation than businesses in capital-intensive sectors. When a corporation earns significant passive investment income — interest, dividends from unrelated companies, rental income from non-active real estate — the SBD limit begins to grind down once passive investment income exceeds $50,000 in the prior year. For every dollar of passive income above $50,000, the SBD limit is reduced by $5 — disappearing entirely at $150,000 of passive income. At $150,000 of passive income, the corporation loses the SBD entirely and its active business income is taxed at the general 26.5% Ontario rate instead of 12.2%. Managing retained earnings through RDTOH-eligible investments, capital gains timing and dividend-paying investments helps Markham corporations preserve their SBD access.
In addition to CRA registration and provincial incorporation, certain Markham business activities require a Town of Markham business licence under the Town's Business Licensing By-law. Categories subject to licensing include home-based businesses, adult entertainment, taxi and transportation network vehicles, short-term rentals and specified personal service businesses. Applications are filed with the Town of Markham's Corporate Services division. York Region has separate regulatory requirements for food service establishments, healthcare facilities and certain industrial operations — check with York Region Environmental Services if your business involves food production, healthcare delivery or regulated waste. Operating without a required licence in Markham can result in a provincial offence notice and an order to cease until the licence is obtained.
How We Help You Start Your Business in Markham
From your first consultation to your first filed T2 with SR&ED claim — a licensed CPA team manages every step for Markham businesses.
Why Markham Business Owners Choose Gondaliya CPA
We are not a generalist firm. We are the AFFORDABLE licensed CPA firm that Markham's technology founders, consultants, life sciences entrepreneurs and professional services businesses trust for startup, SR&ED and ongoing tax planning.
What Our Clients Say
900+ five-star Google reviews from Ontario business owners, including technology companies, consultants and startups from Markham and York Region.
Frequently Asked Questions — Starting a Business in Markham
Common questions from Markham entrepreneurs about business registration, SR&ED, structure and taxes.
Start Your Markham Business the Right Way — Backed by a Licensed CPA
Incorporation from $35. SR&ED eligibility assessment included. Free CRA registration. Bookkeeping from $100/month. Evening and weekend support to 9 PM.