Set Up an E-Commerce Business in Canada

Updated on Wednesday 05th December 2018

Rate this article
based on 1 reviews

Set Up an E-Commerce Business in Canada Image
There are many reasons to set up a company in Canada, among them being having access to a large national market but also to foreign clients for whom goods produced here have a high quality. The best way of reaching international clients, an online shop is the best way of registering a company in Canada. For this purpose, an e-commerce company represents the most suitable option.

Foreign investors also have the right to set up e-commerce companies in Canada with the requirement of respecting the laws imposed at federal and provincial levels. Our Canadian company formation specialists are here to guide you on the procedure of opening an e-commerce business.

Requirements to register an e-commerce company in Canada

In order to operate an e-commerce platform, an investor must first register a traditional company at a federal or territorial level. This will imply respecting all the company registration steps:
  •           choosing a suitable business form in accordance with the size and purpose of the company;
  •           preparing the documents needed for registering the company with the Trade Register;
  •           obtaining a tax identification and a VAT number is mandatory for e-commerce companies;
  •           applying for the necessary licenses to operate, which depend from province to province.

As an e-commerce platform, the Canadian company will be required to have a website created and a domain name registered.

You can rely on our company registration agents in Canada for full support in incorporating the company at a federal or local level. You can discuss your options with us and based on these, you will receive targeted assistance.

Special requirements for e-commerce companies in Canada

Considering online companies complete most of their activities on the Internet, they will still be required to have a physical address where they will receive all the notifications sent by the authorities and third-parties. This address, together with a telephone number and a valid email address must appear on the company’s website.

E-commerce companies in Canada must also obtain the consent of clients for processing personal information, especially in the case of EU clients for which the provisions of the General Data Protection Regulations apply.

The websites of Canadian e-commerce companies must also contain and display the legal terms related to the use of the website.

Legislation applicable to e-commerce companies in Canada

It should be noted that as an e-commerce company, specific requirements will need to be complied with. These are comprised of several laws which provide for the security of electronic payments, electronic security and privacy and protection of personal information.

No matter the purpose of the e-commerce company, the business owner will be required to ensure the following:
  •           privacy related to collecting personal information and profiling those who enter the website;
  •           ensuring the payment of services or products are safe, by using accepted payments gateways;
  •           all the messages and activities related to the promotion of the company must be done with the consent of the customers;
  •           the company must also respect the provisions of the Canadian Contract Law.

The legislation imposed on e-commerce companies is quite extensive, which is why we invite you to reach out to our local consultants who can explain them.

Selling goods online in Canada

E-commerce companies in Canada have customers all over the world which is why they must ensure the best practices related to the sale, shipment, and warranty of the products are respected. For this purpose, the company will need to comply with the Contract Law. This means that all the conditions related to the sale of goods at a distance must be respected. These imply the sale of products via the Internet, email or phone.

The products sold online must be accompanied by invoices and other documents which attest their provenience and important information related to that specific product. The company is required to ensure the replacement and repair of a product, as long the fault does not fall on the courier company.

The sale of products through online companies must also respect a set of tax laws applicable at federal or territorial level in Canada. This is why having a VAT number is mandatory for all e-commerce companies.

Starting an e-commerce company in Canada is simpler than opening a traditional business, however, the legislation imposed on these companies has evolved a lot in the last few years. For full information and assistance in setting up an e-commerce business in this country, please contact our Canadian company incorporation consultants.