Canadian Subsidiary Setup Cost Calculator
A foreign company opening a Canadian entity to transfer an executive or specialised worker needs the company to exist properly before the transfer is credible. Work out what setting it up costs, what registrations the payroll triggers, and what the application will expect to see.
to set up
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Setting the Entity Up
| Item | Basis | Cost |
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What the Payroll Triggers
| Registration | When It Applies | Your Position |
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Documents the Application Will Expect
| Document | Who Produces It | Position |
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Points That Decide This
What to Do Next
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Disclaimer: We are chartered professional accountants and not immigration lawyers or regulated immigration consultants, and nothing on this page is immigration advice or any assessment of whether a work permit will be issued. Whether a transfer qualifies, what the application must contain and how it is assessed are matters for a lawyer or regulated consultant, and this page does not address them. The cost figures here are editable estimates of accounting, incorporation and compliance work, are generated from the inputs you provide, and are not a quotation. Intra-company transfer provisions generally require a qualifying relationship between the foreign and Canadian entities, a qualifying period of recent employment with the foreign entity, and a role falling within the executive, senior managerial or specialised knowledge categories; where the Canadian operation is new, additional expectations apply, which commonly include secured physical premises, evidence of the ability to commence business and to compensate employees, and realistic plans to staff the operation, with the initial permit typically issued for a shorter period and renewal depending on what the operation has actually done. Those requirements and the periods for which permits are issued are set by immigration authorities, change from time to time, and must be confirmed by a qualified adviser. A corporation carrying on business in Canada may have federal and Ontario corporate tax obligations, payroll withholding and remittance obligations, and goods and services tax or harmonized sales tax registration obligations; a branch of a non-resident corporation is taxed differently from a Canadian subsidiary and may be subject to branch tax, and the treatment of dividends, interest, royalties and branch profits depends on the tax treaty, if any, between Canada and the parent’s country of residence. Ontario employer health tax applies to Ontario remuneration above an exemption available to eligible employers, with the exemption and rates subject to change and to rules on associated employers. Workplace safety insurance registration is mandatory for some industries and not others, and the classification of a particular business must be confirmed. All rates, thresholds and fees on this page are editable inputs that should be replaced with current figures. This page is general information, not tax, accounting, legal or immigration advice.
The Entity Has to Be Real Before the Transfer Is Credible
The common mistake is treating the Canadian company as paperwork to be completed quickly so the work permit application can be filed. It is the other way round. The application is assessed partly on whether a genuine operation exists or is genuinely about to.
That means premises, a plan with numbers behind it, the ability to pay the person being transferred, and registrations that match what the company says it will do. A shell with a registered address and no substance is the weakest version of this.
A virtual address is the most common weakness in a start-up transfer. Expectations around physical premises are real, particularly for a specialised knowledge worker, and a mailbox is usually visible as a mailbox. Where budget is tight, a modest shared space with a genuine lease is a stronger position than a prestigious virtual one.
Subsidiary or Branch Changes the Tax, Not Just the Paperwork
Most foreign parents open a subsidiary, and for good reasons: it is a separate legal person, it limits the parent’s exposure, and it looks like what it is. A branch is the same legal entity operating in Canada, which is simpler to open and harder to live with.
A branch brings the parent’s own liability into Canada and is taxed differently, including branch tax on profits, with relief depending on the treaty. The right answer is usually a subsidiary, and the exceptions are specific enough to need advice rather than a default.
| Structure | Practical Position |
|---|---|
| Subsidiary corporation | Separate entity, limits parent exposure, the usual choice |
| Branch of the parent | Same legal entity, branch tax applies, parent exposed |
| Affiliate under common ownership | Workable, the relationship must be documented |
The First Permit Is Short, and Renewal Looks at What You Did
Where the Canadian operation is new, an initial permit is typically issued for a shorter period than people plan around. The renewal is where the operation is judged against what the business plan said it would do.
So the plan matters twice. It supports the first application, and it becomes the benchmark at renewal. A plan with figures nobody intends to hit is worse than a modest one that the company actually delivers.
That is the accounting firm’s part of this. The plan, the projections, the payroll that matches them and the bookkeeping that evidences them at renewal are our work. Whether the transfer qualifies and how the application is argued is a lawyer’s.
Payroll Starts More Obligations Than People Expect
The moment someone is paid in Canada, several things switch on: a payroll account, source deductions remitted on a schedule, annual slips, and provincial employer taxes where thresholds are crossed.
Ontario employer health tax applies above an exemption available to eligible employers, so a small first-year payroll frequently produces nothing. Workplace insurance is industry-dependent rather than universal, and an office operation is often outside mandatory coverage, which surprises foreign parents expecting a single registration covering everything.
Sales Tax Is Not Optional Once Revenue Starts
Registration becomes mandatory above a modest revenue threshold, and voluntary registration before that is frequently worthwhile because it allows tax on setup costs to be recovered.
A new entity spending heavily on fit-out, equipment and professional fees before earning anything is often in a refund position, and registering late means some of that is simply lost.
Register before the large purchases, not after. This is the single most common avoidable cost in a new Canadian operation, and the amount is real where the setup involves a lease, equipment or substantial professional fees.
What This Calculator Does Not Cover
- Whether the transfer qualifies, which is a question for a lawyer or consultant
- Government or immigration filing fees, which change and are set by others
- Legal fees for the application itself
- Transfer pricing between the parent and the Canadian entity
- Treaty withholding on dividends, interest and royalties
- The transferee’s personal tax and residency position
We do the entity, the plan and the compliance. Our business plan service produces the projections the application and the renewal are both measured against, and we set up the corporation, the payroll accounts and the bookkeeping behind them. Instruct an immigration lawyer for the application itself.
Frequently Asked Questions
Common questions on opening a Canadian entity for a transfer.
Related Calculators and Guides
More for foreign companies setting up in Canada.
Set the Entity Up So It Survives the Renewal
Tell us the parent, the role being transferred and what the Canadian operation will actually do. We will set up the corporation and the payroll accounts, write the plan and projections, and keep the books that evidence the operation when the permit comes up for renewal.