Key Legislative Changes for Canada Offshore Company Investors

Canada’s stable and growing economy makes it an ideal location for offshore company formation. To ensure compliance and navigate the process with ease, we have outlined in this article the updated legislative changes and regulations that may affect offshore companies in Canada.

Beneficial Ownership Registry

Starting in 2023, the Canadian government will require corporations to disclose their beneficial owners to a central registry. In fact, this registry is aimed to increase transparency and prevent money laundering and other illegal activities. The registry will be accessible only to authorized persons, such as law enforcement and tax authorities.

Digital Currency Regulations

In 2021, the Canadian government introduced new regulations for digital currencies, such as Bitcoin and other cryptocurrencies. These regulations require companies dealing in digital currencies to register with the Canadian government and comply with anti-money laundering and anti-terrorist financing regulations. And so, the new regulations provide greater clarity for companies operating in this sector, and help ensure that digital currencies are used in a safe and responsible manner.

Anti-Avoidance Measures

In recent years, the government of Canada has implemented several anti-avoidance measures to prevent companies from using offshore tax havens to evade paying taxes. These measures include the Common Reporting Standard, which requires Canadian financial institutions to report the accounts of non-resident clients to the Canadian government, and the Base Erosion and Profit Shifting (BEPS) initiative, which aims to prevent multinational companies from shifting profits to low-tax jurisdictions.

New Corporate Tax Rates

Starting in 2022, the Canadian government introduced new corporate tax rates that vary depending on a company’s level of taxable income. Moreover, the COVID-19 pandemic has prompted the design of these new rates to provide relief to affected companies and promote growth and investment in small businesses. The new rates range from 9% to 15% for small businesses, and from 15% to 25% for larger companies.

Conclusion

In conclusion, these legislative changes for offshore company formation in Canada reflect the government’s efforts to promote transparency, prevent illegal activities, and support growth and investment. As you set up your Canada offshore company, be sure to stay up to date on these changes and comply with all relevant regulations and reporting requirements. By doing so, you can enjoy the benefits of setting up an offshore company in Canada while operating within a legal and compliant framework. So, if you want to know the steps on setting up a business in Canada, then you may check out our last blog.