Share This Post

Uncategorized

Toronto Office Space for American Businesses

doing business in canada

Toronto Office Space for American Businesses
For those thinking of relocating their business to Canada

A sense of shock still hangs in the air. People are contemplating their futures in the midst of extraordinary change. Several times on election night, the server hosting the Immigration Canada website crashed under the load of Americans considering leaving the United States temporarily or permanently.

Even before the election, the Telsec Business Centre in Toronto has fielded calls from American businesses looking to expand into the Canadian market. In the last week, Telsec has taken calls from businesses concerned about their foreign business relationships.

Telsec has a short primer on Doing Business in Canada and a number of blog posts over the previous months. Entries such as like Registering Your Business In Canada, US Startups should begin international expansion in Canada , Canadian businesses are having a 30% off sale – well, almost!  and Canada: A new curiosity for american businesses seeking Toronto virtual office space, might be helpful for American businesses looking to move north.

There is a long history of American businesses using Canadian addresses to smooth relations overseas. Canada also has a free trade deal with the European Union granting a level of tariff free access American based businesses will not enjoy. back in 1988 when George Cohon, the master franchise opened the first McDonald’s in the Soviet Union. Cohon an American-born Canadian businessman who is the founder and senior chairman of McDonald’s of Canada became the founder of  McDonald’s of Russia. The American Parent company of McDonald’s had tried for years to get under the Iron Curtain, but the Soviets were more willing to negotiate with a Canadian owner.

Today, many businesses in other countries would rather deal with a Canadian company than an American corporation. It comes down to optics and Canada’s perceived roll in the world. For this reason some American companies set up shop in Canada, because with a Canadian business address they are not automatically discriminated against for being American. While some companies open up a plant or a Canadian office, others choose to get a virtual office in a Canadian city like Toronto. By having a Canadian address, some businesses find more doors are open to them.

Canada is often used by US firms as a testing ground before international product launches. Facebook, Google, Twitter, Microsoft, and other tech giants have taken advantage of Canada’s multicultural nature to field test products in a place where differences are embraced and celebrated. Similarly, many US firms are moving development teams to Canada to provide a more stable living environment for foreign born workers. Toronto and the tech triangle formed between Ontario cities London, Kitchener/Waterloo and Guelph are routinely noted among the strongest locations for tech firms in the world.

One reason for this is favorable tax incentives for Research and Development. The Canadian SR&ED tax program lets business owners get back much as 35 percent of what they spend on R&D costs, but only for a maximum threshold of $3 million. This kind of program does not exist anywhere in the U.S., and that’s a huge amount of money for a company who needs to develop a product that they hope to take to the world stage. Federal and Provincial taxes that companies pay, also subsidize many of the costs that U.S. citizens are used to paying out of pocket, such as health care and education.

Share This Post