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North America Common Law 94+ treaties

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Why Canada?

R&D heavy Canadian controlled startups

SR&ED is refundable at 35% on the first CAD 3M of qualifying R&D for Canadian Controlled Private Corporations (CCPCs). The small business deduction brings effective CIT to roughly 12% on the first CAD 500k of active income. Provincial top ups (Ontario IDMTC, BC SBVCTC) stack.

SR&ED 35% refundableSmall biz ~12%CCPC status

North American SaaS founders

Stripe Canada and Wise both natively support CAD, with US dollar acquiring available out of the box. Federal CIT is 15% plus provincial (Ontario 11.5%, BC 12%) for a combined ~26.5%. 94 double tax treaties including the comprehensive US treaty.

Stripe + Wise native~26.5% combined CITUS treaty

Founders incorporating in BC or Ontario

Ontario and British Columbia have removed the Canadian resident director requirement that still applies under federal CBCA (25% Canadian directors). GST/HST registration triggers above CAD 30k of revenue. MaRS, Communitech and Creative Destruction Lab anchor the ecosystem.

No director residencyGST/HST CAD 30kMaRS / CDL

Considerations

If you want territorial or low tax treatment

Canada taxes worldwide income at ~26.5% combined; even with SR&ED the effective rate stays material for non R&D revenue. For territorial regimes:

~26.5% combined CITWorldwide taxationProvincial layering

If you need a cheap EU operating base

Canada EU CETA covers trade but not financial passport or EU resident employment. Selling SaaS into the EU still benefits from a local entity for VAT MOSS and data residency. For a lean EU base:

No EU passportVAT MOSS still requiredCBCA director rule federally
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