Open a Branch in Canada
Foreign companies that are looking at expanding their business in Canada have the option of opening a subsidiary company or a branch office. If they opt to open a branch office, they will have to fulfil specific requirements.
In order to set up a branch office in Canada and bring in employees from their main office or other offices, the company can make use of the Intra Company Transfer Work Permit.
Intra-Company Transfer (ICT) is for employees who work for a company with a qualifying relationship with a Canadian firm, such as a subsidiary, affiliate, parent, or branch. Employers in Canada do not need an LMIA to hire employees through this scheme.
The foreign worker must have worked for the company for at least one year. He must have either worked in a managerial role or show that they have advanced and proprietary knowledge of the business or its products.
Another advantage of this work permit is that the companies applying for the intra-company transfer need not apply for a Labour Market Impact Assessment (LMIA) before making their application. This is good because getting the LMIA can be a difficult process and the opportunity to do away with this step is good news for employers.
The duration of the intra-company transfer work permit for senior managers and executives is 7 years and for specialized knowledge workers, it’s 5 years.
While the ICT can be used to move to Canada for work, it can also be used to move to Canada and start a branch office in Canada.
Individuals who own a business or hold executive position in a company can use the ICT to come to Canada and open a branch here.
Applicants must belong to a parent company that is well-established and they must have the required tax records and financial reports to prove this.
Though it’s not required to open a similar office in Canada, it must be related to the parent company and one executive can be brought from outside to run the company.
Benefits of Intra-Company Transfer permit
- The processing time for the ICT is lesser because it doesn’t require a LMIA.
- The work permit issued under the ICT is of longer duration (5-7 years) while standard work permits are valid for only up to 4 years.
- The ICT can be used in the future to apply for permanent residency.
- It has more ease of applying compared to provincial entrepreneur programs. Applicant only needs to show the relationship with the parent company and can change the investment amount and hiring plans later.
- Provides access to a diverse labor pool and makes immigration easier for a company’s current and future employees.
In order to open a branch office, the foreign company must make an application for registration as a foreign corporation in every province where it intends to operate. It should register itself as an extra provincial or foreign corporation.
The company should have a registered Canadian address and a Canadian resident attorney or agent is required for local representation.
Apart from this, the following information is required when registering the company:
- Country which the parent company belongs to
- Its registration number
- Legal form and registered address of the parent company
Apart from being an option to open a branch office in Canada, the Intra-company transfer permit has factors like quick processing time, flexibility and longer validity of the work permit acting in its favor.
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What are the advantages of opening a branch office in Canada?
To establish a branch office, the foreign company is required to apply for an extra-provincial license to carry its business in each province where it intends to operate. These licenses are inexpensive and easy to get.
Apart from this, branch offices aren’t required to have Canadian directors unlike opening a Canadian subsidiary where 25% of the board should consist of resident Canadian directors.
What is the processing time of the ICT?
On an average, the ICT work permits are processed within 1 to 2 months. However, in rare cases (in 5% of cases), it can take 3 to 4 months to receive a decision on an ICT work permit application. Please take into account the processing times at a Canadian embassy/consulate in your region.
Under the Intra Company Transfer (ICT) program, can the company in Canada engage in a different form of business than the parent company?
There is no legal necessity that both companies (the parent and its Canadian subsidiary or affiliate) operate in the same industry. However, it’s strongly advised that the Canadian firm pursues a similar business or opportunity related to the parent company to avoid any doubts on the validity of the business.
What if the Canadian business does not turn profitable in the first year?
Profitability is not a legal obligation. Your company must, however, be actively engaged in business, which means it must be providing services or goods to clients in Canada or elsewhere. In addition, your business must have a physical location (office or warehouse) and employ at least one Canadian employee who can be a permanent resident or Canadian citizen.
Is it necessary for me to produce the results of English/French language tests in order to obtain a work permit under the Intra Company Transfer program?
In most cases, business owners are not needed to present proof of language proficiency. Employees may be required to present English or French language test results if they desire to move critical people to Canada under this scheme.