Canadian division of a UK company

Old Oct 11th 2008, 12:46 am
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Default Canadian division of a UK company

Hyperthetical question (at the moment)
My employer (ltd company) has agreed in principle to setup a canadian division of our company and has said they want me to run it. How easy is it for a ltd company to setup one in canada and how would they go about employing me over there? I have read intracompany threads but could'nt see a step by step approach to how its is done. I am senior management and the uk company will carry on running here whilst I'm in canada.
Many thanks
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Old Oct 11th 2008, 1:14 am
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Default Re: Canadian division of a UK company

Originally Posted by snowdemon
I have read intracompany threads but could'nt see a step by step approach to how its is done. I am senior management and the uk company will carry on running here whilst I'm in canada.
Many thanks
The above are some of the requirements anyway.

It is quite complex to use intra-company route to set up a branch in Canada. But it is doable if done properly. I don't recommend DIY route though. You won't find a "step-by-step" instruction as info what steps to take, when and how is mostly case and circumstances specific.
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Old Oct 11th 2008, 5:24 am
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Default Re: Canadian division of a UK company

Originally Posted by snowdemon
Hyperthetical question (at the moment)
My employer (ltd company) has agreed in principle to setup a canadian division of our company and has said they want me to run it. How easy is it for a ltd company to setup one in canada and how would they go about employing me over there? I have read intracompany threads but could'nt see a step by step approach to how its is done. I am senior management and the uk company will carry on running here whilst I'm in canada.
Many thanks
This is incredibly close to my own situation. The approach I have adopted however (rightly or wrongly) is to have applied for permanent residence myself under the skilled worker route.

Once in Canada (Vancouver), my intention is to incorporate a new company with myself as the majority shareholder, and utilising capital investment from the existing UK Ltd company of which I am a director.

My view is that I will make a success of it in Canada by whatever means necessary (i.e. I may be required to do some additional consulting work etc) and that mine and my familys residence status shouldn't be connected directly to the performance of a new small company.

To date I have used a local Canadian accountant and tax consultant to provide assistance with my business plan etc. One incentive I found towards a Canadian incorporated company is generally a lower taxation rate of company profits compared to the UK for example.

I'm assuming that your original query concerns whether you could obtain PR status through your UK company somehow 'sponsoring' you. My understanding is that the business 'investment' or 'entrepreneurs' visa route is as complicated and time consuming as the skilled worker route.

I'd certainly be interested to see how things pan out for you.

Regards
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Old Oct 12th 2008, 7:59 am
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Default Re: Canadian division of a UK company

Originally Posted by blake75
This is incredibly close to my own situation. The approach I have adopted however (rightly or wrongly) is to have applied for permanent residence myself under the skilled worker route.

Once in Canada (Vancouver), my intention is to incorporate a new company with myself as the majority shareholder, and utilising capital investment from the existing UK Ltd company of which I am a director.

My view is that I will make a success of it in Canada by whatever means necessary (i.e. I may be required to do some additional consulting work etc) and that mine and my familys residence status shouldn't be connected directly to the performance of a new small company.

To date I have used a local Canadian accountant and tax consultant to provide assistance with my business plan etc. One incentive I found towards a Canadian incorporated company is generally a lower taxation rate of company profits compared to the UK for example.

I'm assuming that your original query concerns whether you could obtain PR status through your UK company somehow 'sponsoring' you. My understanding is that the business 'investment' or 'entrepreneurs' visa route is as complicated and time consuming as the skilled worker route.

I'd certainly be interested to see how things pan out for you.

Regards
Regarding the Entrepreneur or Investor route I would say these are probably more complicated than skilled worker. Also, these are not generally fast routes - they take a few years like skilled worker. But most Provincial Nominee Programs also have Business/Entrepreneur streams which would be much faster.

When you say your "company somehow sponsoring you" you need to be aware that with most routes such as Provincial Nominee Programs the Canadian company that sponsors a PNP applicant needs to have been established usually for several years. So, for instance, you couldn't establish a company in Canada and then immediately have that company make you a job offer and go through a PNP program. I'm not certain about federal Skilled Worker with arranged employment but I assume you'd run into the same problem - the company must have some history to go through the LMO process.

The inter-company transferee route just gets you a work permit, nothing more. It isnt a route to Permanent Residency. The advantage of the inter-company transferee route is that it is exempted from having to go through the LMO process so a work permit can be issued very quickly.

However, if you were an inter-company transferee working in Canada on a work permit after 2 years you could apply under the Canadian Experience Class to get permanent residency that way.
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Old Oct 12th 2008, 9:19 am
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Default Re: Canadian division of a UK company

So could the company I work for setup a canadian arm and send me out there to set it up and run it with a view to eventually employing canadian citizens?

Having read all the threads on 'inter-company transfers' I feel the first step is to setup a canadian company that is owned by the UK company? Andrew is this route a service your company offers and could you give a quote based on helping with this?

many thanks

Last edited by snowdemon; Oct 12th 2008 at 9:55 am.
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Old Oct 12th 2008, 10:57 am
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Default Re: Canadian division of a UK company

Originally Posted by snowdemon
So could the company I work for setup a canadian arm and send me out there to set it up and run it with a view to eventually employing canadian citizens?

Having read all the threads on 'inter-company transfers' I feel the first step is to setup a canadian company that is owned by the UK company? Andrew is this route a service your company offers and could you give a quote based on helping with this?

many thanks
If you are establishing a new subsidiary of a UK company the following from the CIC operational manuals may help...

"An applicant seeking entry to open a new office on behalf of the foreign enterprise may also qualify, after having established that the enterprise in Canada is expected to support a managerial or executive position or, in the case of specialized knowledge, is expected to be doing business. Factors such as the ownership or control of the enterprise, the premises of the enterprise, the investment committed, the organizational structure, the goods or services to be provided and the viability of foreign operation should be considered."

The key phrase here is "doing business" which is defined further by CIC...

"Doing business means regularly, systematically, and continuously providing goods and/or services by a parent, branch, subsidiary, or affiliate in Canada and the foreign country, as the case may be. It does not include the mere presence of an agent or office in Canada. For instance, a company with no employees which exists in name only and is established for the sole purpose of facilitating the entry of intra-company transferees would not qualify. (See Appendix G for an explanation of terminology.) Evidence of the fact that a company is actively doing business such as annual reports (for public companies), articles of incorporation, profit/loss statements, partnership agreements, licence to do business, business tax returns and registration with Canada Customs and Revenue Agency as an employer, may be useful. Both the Canadian and the foreign branches of the company must be doing business for the duration of the intended stay in Canada of the intra-company transferee. The foreign national employee must be able to transfer back to the foreign company at the end of their assignment in Canada."

So I think you are right that the new Canadian operation would need to be doing more than just providing you with a job - other employees, customer contracts etc would certainly be required to meet the definition of "doing business". Remember that all this convoluted process is actually saving you is the LMO - in other words it shortcuts the system by a few months.

Last edited by Paul Wildy; Oct 12th 2008 at 11:00 am.
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Old Oct 12th 2008, 11:10 am
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Default Re: Canadian division of a UK company

Hi NSpaul
Thank you for this information. Do you have a link to where I can read more on the CIC website. From what I can gather LMO is for people who want to get a job in canada, I'm not in this category as I don't really want a job. What I can do though is setup an arm of UK company, albeit small, with a view to employing one or two canadians to run it in the future. Doe's is state that the canadian arm has to be doing the same business as the uk company?
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Old Oct 12th 2008, 12:08 pm
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Default Re: Canadian division of a UK company

Originally Posted by snowdemon
Hi NSpaul
Thank you for this information. Do you have a link to where I can read more on the CIC website. From what I can gather LMO is for people who want to get a job in canada, I'm not in this category as I don't really want a job. What I can do though is setup an arm of UK company, albeit small, with a view to employing one or two canadians to run it in the future. Doe's is state that the canadian arm has to be doing the same business as the uk company?
The CIC Manual that deals with this topic is here: http://www.cic.gc.ca/english/resourc...s/fw/fw01e.pdf

Yes, an LMO is for people who want to get a work permit in Canada. And you need a work permit of you want to work in Canada. It doesnt matter whether you are getting a job with someone else, being employed by your own company or being self-employed - you still need a work permit. Getting a work permit (if you have a job offer) is fairly straightforward and fast but getting the LMO takes a lot longer. The good news is that certain categories of people dont have to get an LMO. Provincial Nominees for instance who have already been nominated but not got PR visas yet dont need it, nor do inter-company transferees.

I dont recall seeing anything that says the Canadian company must be doing the same business as the Uk company. Its perfectly conceivable that a company in the UK who made shoes would transfer a senior executive to Canada to work for its subsidiary that made handbags, based on the transferrable skills of the person.

But it has to be a genuine situation. I.e. there has to be a real company in Canada (as it says, not just a company in name with no employees) that is really doing business here.

What I was really trying to say above is that if you think that would be difficult to prove or establish and you arent in a desperate hurry then there may be easier routes. For instance its possible to get a work permit for self-employment (but no LMO exemption) rather than go to the lengths of establishing a Canadian company for the sole purpose of doing an inter-company transfer once it is established.
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Old Oct 12th 2008, 12:41 pm
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Default Re: Canadian division of a UK company

I don't really have much to add - the foreign worker manual is the place to start, there's specifics in there about setting up the Canadian arm of an existing company.... it's certainly do-able if your company is serious about it.

My transfer was more clear cut - moved to the Canadian arm of a multi-national company. Did all the paperwork myself, was a tense 6 or 7 week wait, but came through with no problem in the end....
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