Holding Company Setup Cost Calculator
Every fee to get a holdco running and keep it running, itemised. Government fee, NUANS, the section 85 rollover if shares are moving in, the registered address, and the annual compliance that follows for as long as the company exists.
year one, all in
—
—
—
—
Setting It Up
| Item | Basis | Fee |
|---|
Every Year After
| Item | Basis | Fee |
|---|
Ontario Against Federal
| Item | Ontario | Federal |
|---|
Points That Decide This
What to Do Next
—
Disclaimer: Government fees are $300 for an Ontario incorporation under the OBCA and $200 for a federal incorporation under the CBCA. A NUANS name search is required for a word name and not for a numbered company. The Canada Business Corporations Act requires at least twenty-five percent of directors to be resident Canadians, while Ontario removed its resident director requirement for OBCA corporations effective 5 July 2021. Our professional fees include HST and are fixed. The section 85 rollover fee covers the election on Form T2057 and the supporting documentation, and does not include a valuation where one is required. Compilation report fees are $400 in the first year and $300 in each later year, with comparative figures at $150 where a prior year is presented. A holding company must file a T2 every year regardless of activity, and an annual return with its incorporating jurisdiction. This page is general information, not tax or legal advice.
The Setup Is Cheap. The Annual Cost Is What You Are Buying.
Almost everyone asks what it costs to set up a holding company. That is the wrong question, because the setup is a few hundred dollars and the company then files a return every year for as long as it exists.
| Ontario Holdco | Setup | Annual | Five Years |
|---|---|---|---|
| Numbered, no rollover, own address, T2 only | $335 | $450 | $2,135 |
| Named, section 85 rollover, our address, compilation | $860 | $1,850 | $9,710 |
A dormant numbered holdco costs about $450 a year to keep alive. That is genuinely cheap, and it is why holding companies are worth setting up before you need them rather than in a hurry when a transaction appears.
Federal Can Cost Nearly Twice as Much
The federal government fee is $100 lower, which is where most comparisons stop. The Canada Business Corporations Act also requires at least a quarter of directors to be resident Canadians. Ontario removed its equivalent requirement in July 2021.
| Non-Resident Founder | Ontario | Federal |
|---|---|---|
| Government fee | $300 | $200 |
| Resident director required | No | Yes |
| Nominee director, per year | Nil | $1,500 |
| Year one total | $2,710 | $4,610 |
| Five year total | $9,710 | $17,610 |
A non-resident incorporating federally pays $7,900 over five years for a problem that does not exist in Ontario. The $100 saving on the government fee is the most expensive hundred dollars in Canadian incorporation, and it is chosen regularly because federal sounds more substantial than provincial.
Numbered Is Almost Always Right for a Holdco
A holding company has no customers, no brand and no marketing. Nobody searches for it. Paying for a NUANS search and a name serves no purpose unless the holdco will itself do something public.
The saving is only $25, but the name also has to be checked, cleared and then defended if someone else uses something similar. A numbered company avoids all of it and can be renamed later by articles of amendment if circumstances change.
The Section 85 Rollover Is the Real Work
Where existing operating company shares move into the holdco, a section 85 election lets that happen at cost rather than at fair market value, deferring the gain. Without it, transferring shares worth $2,000,000 with a nominal cost base triggers tax on the whole gain immediately.
- Form T2057 must be filed by the earliest date on which any party has to file for the year of the transfer.
- The elected amount has to sit within statutory limits, and getting it wrong can create an immediate gain.
- Consideration must include shares of the holdco, and non-share consideration above the cost base creates a taxable benefit.
- A valuation may be required where the fair market value is not readily established, and that is not included in the fee here.
- Late filing is possible within three years on payment of a penalty, so a missed election is not always fatal.
What a Holdco Actually Does and Does Not Do
| Commonly Claimed | Reality |
|---|---|
| Saves tax on operating profits | No. Dividends move up tax-free between connected corporations, but the rate on the underlying income is unchanged. |
| Avoids the passive income grind | No. The associated group is aggregated, so moving investments does not help. |
| Protects surplus from operating risk | Yes. This is the main reason to have one. |
| Helps purify shares for the capital gains exemption | Yes, by moving non-active assets out of the opco. |
| Allows multiple shareholders to be paid differently | Yes, where each has their own holdco. |
| Simplifies succession and estate planning | Yes, particularly with a freeze. |
Every Year, Whether It Does Anything or Not
An incorporated company files a T2 every year even with no income and no activity. It files an annual return with its incorporating jurisdiction. It maintains a register of individuals with significant control, and federally that information goes to Corporations Canada.
Dormant is not the same as free. Where a holdco has served its purpose and is genuinely finished, winding it up properly is usually better than leaving it filing nil returns indefinitely.
What This Calculator Does Not Cover
- Valuations where a section 85 rollover needs one
- Legal fees for a shareholders agreement or a unanimous shareholder declaration
- An estate freeze, which is a separate and larger piece of work
- Bookkeeping where the holdco holds investments with activity
- Extra-provincial registration if the holdco carries on business elsewhere
- Whether a holdco is the right answer, which is the question to settle first
Set it up before you need it, not during a transaction. A holdco created in a hurry to close a deal is where the section 85 mistakes happen. Our incorporation service covers the setup, the rollover and the annual filings.
Frequently Asked Questions
Common questions on setting up a holding company.
Related Calculators and Guides
More tools for group structures.
Set It Up Before You Need It, Not During a Transaction
Tell us what the holdco is for and whether shares are moving in. We will confirm the jurisdiction, incorporate, prepare the section 85 election where one is needed, and handle the annual filings.