Canadian Legislation Related to Foreign Investments

Updated on Tuesday 05th December 2017

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Foreign investors are attracted by the Canadian resources which provide good business opportunities. However, in order to be allowed to invest here, they must follow certain rules imposed by the government under the Investment Canada Act (ICA) which specifically provides for foreign direct investments in the country. It should be noted that this law does not apply to foreign enterprises coming to open new companies in Canada.

Our Canadian company formation consultants can explain the provisions of the Investment Canada Act.

Foreign investors under the Canadian law on foreign investments

Both the ICA and the Company Law in Canada specify that a foreign investor is an individual or legal person which does not have Canadian residency.
The legislation on foreign investments specifies that foreign investors benefit from the same rights and treatment as local enterprisers opening companies Canada. However, there are also certain restrictions related to certain industries where foreign entrepreneurs and companies can participate. These restrictions usually imply percentages of participation in a Canadian shareholding structure. As for the industries these restrictions apply are a few: air transportation, telecommunications, broadcasting and financial services.
Our company registration consultants in Canada can offer more information on the restrictions imposed to foreign investors.

What are the advantages Canada offers to foreign investors?

The legislation on foreign investments in Canada also provides for various advantages for overseas enterprisers and companies which can open various types of structures at federal or territorial level and the same tax treatment as local investors.

Under the Investment Canada Act, foreign investors have the right to purchase local companies. These companies can be public or private. The purchase of assets is also possible under the Canadian legislation on foreign investments.

It should be noted that Canada is one of the few countries which measure the results of foreign investments.

For full information on the legislation related to foreign investments in Canada, please contact our local consultants. You can also rely on us if you are interested in starting a business in Canada.


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