Opening of bank accounts in Canada

As you already know, registering a partnership in Canada allows for simplified access to the US and Canadian banking system. To open a bank account without hassles, it is recommended to register a partnership in Canada, with a resident as a nominee. This procedure is more time and cost-efficient and preferable to the domestic banks. The partner who is a Canadian resident can enter a special arrangement with you or your offshore firm whereby all rights belong to you, or, as an option, the partnership agreement can be drafted regarding terms and conditions to protect all partners. It is not necessary to open a Canadian account. It can be done in US banks and EMIs in Europe that issue virtual accounts with a global reach.

Accounts in foreign currencies in Canada

Reliable relationships between Canada and the USA provide for well-established mutually beneficial banking services. Even though the Canadian and US dollars are separate currencies, the banking systems are developed strongly and every Canadian bank offers accounts in USD by default. However, local banks do not support accounts in other currencies, so if you need a EUR account, it is recommended to open an account in the European Union for your Canadian partnership.

Tax Considerations for Non-Residents Using Canadian Partnerships

For tax purposes, a partnership is not recognized as a distinct entity and consequently is free from corporate taxes. Under the law, incomes should be specified on the tax returns of its partners. If there are no profits in Canada and none of the partners resides in the country, hence there are no requirements to pay taxes in Canada.

In addition, partnerships registered in Ontario are not bounded to file yearly reports and profit tax returns if they have declarable income. However, they should collect financial records which may be necessary for the future. Overall, partners are subjected to taxation based on the tax rates of the country of their legal residency. This requirement is enforceable by both individuals and legal entities.

If among partners there is a Canadian resident, then their share of the income must be shown on their tax return and they are taxable. If you have Canadian nominees, there will be no Canadian source of income, and they are only responsible for a tax on the fees they get for conducting their services.

As a partnership in Ontario is not a taxable entity, it does not benefit from Canada’s bilateral double taxation arrangements with other states.

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