7 July 2018
A Canadian Solution for a Post-Brexit Europe
With Brexit set to take effect in March of 2019, the future of UK /EU business relations remains uncertain. Many European companies and investors are working diligently to develop business strategies and structures in anticipation of a post-Brexit world. The Comprehensive Economic & Trade Agreement (CETA), provisionally in force between Canada and the European Union since September 21, 2017, provides European, and in particular EU businesses with a potential solution to the challenges posed by the separation of the UK from the rest of the EU, by allowing continued cross border access to EU markets, via British Columbia (BC), Canada.
Under the British Columbia Business Corporations Act, companies incorporated in BC are not required to have domestic directors or shareholders. This may not be the case for companies which are incorporated in other Canadian provinces, or federally. As many international business owners can attest, finding trusted domestic directors and/or shareholders abroad can be challenging when your business connections in a foreign jurisdiction are limited, unfamiliar or non-existent, especially when you consider foreign business practices, cultural nuances and potential language barriers. Incorporating your company in BC, while maintaining the original directors and shareholders, eliminates these challenges and allows for continued access between the UK and European markets, and the subsequent provision of goods and services.
Incorporating a Canadian Subsidiary
Incorporating a company in British Columbia, Canada is a relatively straightforward, quick and inexpensive process. A UK company, investor or entrepreneur can incorporate a BC company as a wholly owned subsidiary, with, as discussed, directors who may not reside in Canada.
The cost of setting up a Canadian corporation can be as little as $2000CAD, inclusive of fees, disbursements and taxes. The annual cost to maintain a company in good standing with the BC Registrar of Companies is approximately $400CAD. Additional registrations may be required to conduct business in other Canadian provinces, for an estimated cost of $500 – $1000CAD per year, per province.
Celso Boscariol, QC is a partner in our Business Group, a frequent presenter on CETA, and President of the EU Chamber of Commerce in Canada – West.