Bussiness in Canada


Canadian Economy

Canada is one of the wealthiest states of the world, the gross domestic product (GDP) of Canada is about 1432,140 Billion. US dollars, so the state is GDP rank 14 worldwide. In purchasing power parity, Canada is up to 1265.838 billion dollars in 13th place. Canada is considered a social market economy, but the economic margin for maneuver is very large, in the „Index of Economic Freedom,“ of the Heritage Foundation Canada will be rated higher than most western European countries and slightly lower than the USA. As in other developed countries the Canadian economy is dominated by the services sector. The primary sector anyways is above average , which is due to the abundance of natural resources and their exploitation.

Regarding commodities mining is the most important to the canadian state because of its abundance of natural resources. Canada is the world’s largest producer of zinc, uranium, potassium, cadmium, sulfur and nickel. In the cases of the degradation of aluminum, titanium, cobalt, molybdenum, gold and lead the country ranks third. About 80% of the exploited resources are exported, mainly to the United States of America.

Even though only 8% of the canadian area is used for agriculture, Canada is one of the world’s largest exporters of agricultural products. The Canadian agriculture can be divided into five main groups: Primarily intended for export are cereals and oil seeds (34% of agricultural income) and meat products and live cattle (27%). Destined for the domestic market are dairy products (12%), fruit and vegetables from the garden (9%) and poultry and eggs (8%). The undertakings are highly modernized and mechanized.

Business Structures

Starting a business can be overwhelming for first time entrepreneurs. Canada Business Ontario is your information connection and will help you from start to finish. When starting your business, choose the business structure that best suits your needs. There are four types of business structures in Ontario: sole-proprietorship, partnerships, corporations and cooperatives.

Sole-Proprietorship:

A sole-proprietorship or partnership is the easiest and most common way to start a business, but it does come with drawbacks, and all of the responsibility for the businesses’ success rests with you as the owner. With this type of business organization, you would be fully responsible for all debts and obligations related to your business and all profits would be yours alone to keep. As a sole owner of the business, a creditor can make a claim against your personal or business assets to pay off any debt.

Partnership:

A sole-proprietorship or partnership is the easiest and most common way to start a business, but it does come with drawbacks, and all of the responsibility for the businesses’ success rests with you as the owner. A partnership is a good business structure if you want to carry on a business with a partner and you do not wish to incorporate your business. With a partnership, financial resources are combined and put into the business. You can establish the terms of your business with your partner and protect yourself in case of a disagreement or dissolution by drawing up a specific business agreement. As partners, you would share in the profits of your business according to the terms of your agreement.

Corporation:

A corporation is a legal entity that separates the business from its owner/operator. You can choose to incorporate federally or provincially and each option comes with its own advantages and disadvantages. Incorporation can be done at the federal or provincial/territorial level. When you incorporate your business, it is considered to be a legal entity that is separate from the shareholders. As a shareholder of a corporation, you will not be personally liable for the debts, obligations or acts of the corporation. When making such decisions, it is always wise to seek legal advice before incorporating.

Co-Operative:

A co-operative is a corporation that is organized and controlled by its members. It can be set up to operate as either for profit or as a not-for-profit. Just like a corporation, it can be registered provincially or federally and each option comes with own advantages and disadvantages. With a co-operative, you would have a business that would be owned by an association of members. This is the least common form of business, but can be appropriate in situations where a group of persons or businesses decide to pool their resources to provide access to common needs, such as the delivery of products or services, the sale of products or services, employment, and more.

How to Chose a Business Structure?

When deciding on a structure for your business, choose the one that best suits your business needs, keeping in mind that there are advantages and disadvantages for each structure. It is important to note that you can change your business structure throughout the life of your business. As your business grows and expands, you may decide to change your business structure, or to restructure your business.

Following are some important factors to chose a business structure:

  • The licenses you require
  • How much tax you pay
  • Whether you're considered an employee, or the owner of the business
  • Your potential personal liability
  • How much control you have over the business
  • Ongoing costs and volume of paper work for your business.
  • Canadian Tax System

    In Canada, we have a progressive tax system. This means that the more money you earn, the more taxes you could pay. As explained by the Canada Revenue Agency (CRA), many of the services and benefits we enjoy as Canadians are made possible through taxes. We pay taxes on our income and on most goods and services we purchase in Canada. The government collects these taxes to pay for such things as roads and highways, hospitals, education, health care, national defence, police and fire services, parks and playgrounds, libraries, garbage collection, and many other programs and services.

    How the taxes are paid?

    ndividuals and families, businesses and charities are required to declare their income annually (or more frequently when directed), and pay any applicable taxes. Taxes are calculated based on the level of income, deductions permitted and credits. Individuals and families complete an annual tax return following instructions issued by the CRA and the provinces.

    Businesses and employers are required by law to issue statements to individuals for income earned through employment. An example of this is a T4 Statement of Remuneration Paid (slip) issued to a student who worked at a pizzeria part-time and earned $15,000. Interest, except when earned in a Tax-Free Savings Account (TFSA), and dividend income are also included in calculating income.

    GST and HST

    GST is applicable to most goods and services in Canada. HST applies to the same goods and services as the GST and is collected in provinces that have harmonized their provincial sales tax with the GST. Businesses generally must file returns on a regular basis, collect the tax on taxable supplies they make in Canada and remit any resulting net tax owing.

    Reducing Tax

    Individuals, families, and businesses may legally reduce the taxes payable on their income by making the most of the eligible deductions and credits permitted by the federal and provincial governments. Currently individuals may qualify for a basic personal exemption, a spousal exemption and tax credits for items such as tuition, education and textbook amounts, housing costs, charitable donations and medical expenses. There are also credits for GST, with eligibility determined by the CRA.

    Splitting Pension Income

    Subject to residency and living arrangements specified by the CRA, spouses or common-law partners are permitted to split the eligible pension income earned by the pensioner. This split essentially reduces the income of the pensioner by allocating part of the pension to the pensioner's spouse or partner. Note that Old Age Security payments, Canada Pension Plan and Quebec Pension Plan cannot be split. Both spouses or partners have to jointly elect and agree to the split. If one of the spouses or partners has higher income than the other, they may reduce their taxable income by allocating part of their pension to the lower earning partner. The maximum amount that may be split is 50 per cent of the eligible pension income.

    Things to Remember

    It is very important to keep copies of all receipts with respect to income and certain expenses in order to prepare and support income reported and to claim eligible deductions from the CRA and provincial governments. For example, receipts for public transportation passes, tuition fees receipts and receipts for contributions to Registered Retirement Savings Plans (RRSPs) can all add up to significant deductions or credits. Accountants, tax specialists and advisors are available to assist in this process and in the filing of returns.

    How to start a company?

    As a prospective entrepreneur or new business owner, you are no doubt aware of the importance of spreading the word about your organization. In addition to informing potential customers about your business, you must let the government know about your plans. Before registering your business, you must think about what form of business you want to start and what you want to call your business. Choose the right name for your business. Your business name should be unique and easy to remember, and should describe the products and services you provide.

    Your Business Number is your single account number for dealing with the government regarding GST/HST, payroll, import/export and other activities. Simplify and speed up your dealings with the various Quebec government departments and organizations by registering with the Registraire des entreprises [Quebec enterprise registrar].

    Federal incorporation allows you to do business under the same name in all provinces and territories, although you may still need to register your business in individual provinces and territories. If you do plan to do business in more than one province or territory now or in the future, you should consider incorporating federally. Before doing so, you need to complete a NUANS name search.

    You may also require specific permits and licences from the federal, provincial or municipal governments, depending on your location, industry sector, and specific activities that you plan to conduct. Use our permits and licences search to find out which permits and licences might apply to your business.

    Imports and Exports

    The automotive sector, along with the oil and gas sector, account for the bulk of Canada's imports and exports represented in this table. The vast majority of Canada's automotive exports are destined for the United States. Crude petroleum oil exports accounted for approximately 13% of Canada's exports to the world in 2015.

    The following export product groups represent the highest dollar value in Canadian global shipments during 2015. Also shown is the percentage share each export category represents in terms of overall exports from Canada.

  • Oil: US$77.8 billion (19% of total exports)
  • Vehicles: $60 billion (14.7%)
  • Machines, engines, pumps: $31.1 billion (7.6%)
  • Gems, precious metals: $19 billion (4.7%)
  • Electronic equipment: $13.2 billion (3.2%)
  • Plastics: $12.5 billion (3.1%)
  • Aircraft, spacecraft: $12.3 billion (3%)
  • Wood: $11.8 billion (2.9%)
  • Aluminium: $8.2 billion (2%)
  • Paper: $7.7 billion (1.9%)
  • Rich in natural resources, Australia is a major exporter of commodities. Metalliferous ores and metal scrap account for 29 percent of total exports and mineral fuels, lubricants and related materials account for 25 percent, of which coal, coke and briquettes account for 15 percent and gas accounts for 7 percent. The country also exports: food and live animals (14 percent), mainly meat (5 percent) and cereals (4 percent); manufactured goods (6 percent), mainly non-ferrous metals (4 percent); and machinery and transport equipment (6 percent). Australia's largest export markets are China (32 percent of total exports), Japan (16 percent), South Korea (7 percent), the US (5 percent), India (4 percent), New Zealand, Singapore and Taiwan (3 percent each). This page provides the latest reported value for - Australia Exports - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

    Resources continue to underpin Australia’s exports to China. Australia exported 266.2 million tonnes of iron ore to China in 2009, an increase of 45.2 per cent over the same period. China is also Australia’s largest source of imports. Major imports from China include clothing, communications equipment, computers, prams, toys, games and sporting goods, furniture and televisions.

    Economic Forecast

    Australia's per-capita GDP is higher than that of the UK, Germany, or France, in terms of purchasing power parity (PPP). The country ranked second in the 2011 United Nations Human Development Index and sixth in The Economist's 2005 worldwide quality-of-life index. With a sovereign credit rating of "AAA," Australia's credit rating is actually higher than that of the United States.

    In 2011, Credit Suisse reported that Australia had the highest median wealth in the world, with an average $222,000 US. That number was nearly four times higher than the average for American adults and made Australia second only to Switzerland in average wealth.

    Australia's economy relies heavily on the export of commodities rather than manufacturing. Major Australian exports include wheat and wool, minerals such as iron ore and gold, and energy in the forms of liquefied natural gas and coal. Australia's largest export markets include Japan, China, South Korea, India, and the United States.

    However, the service sector of the economy constitutes 69 percent of Australia's GDP. Property and business services have been the largest growth industries in the service sector. Unfortunately, this growth appears to have been at the expense of the manufacturing sector, which has contributed proportionately less to the economy since the late 1990s.

    There has probably never been a better time to build a startup in Australia. We have a growing pipeline of entrepreneurs and accelerators, new startup funds announced almost every week, and enthusiastic support from all levels of government to build the ecosystem.

    Australia is at a critical juncture - political and business leaders agree that innovation is the key to our continued prosperity. To ensure we don’t get left behind, we must act decisively. The government’s national innovation agenda will provide an opportunity to set clear-eyed, ambitious goals for the short, medium, and long term. With a well-defined vision and a series of targeted policies for realising that vision, this agenda could provide a blueprint for Australia’s economic future.

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    Salient Links UK Limited launched the Diplomat Link in October 2011 with an objective to provide a platform to diplomatic community to share and exchange their experiences while working in different cultures and countries.

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