Canada LP (for non-residents)

[Derbo8]

Hello Friends,

I went trough the whole process as a non-resident and I like to share my experience.

My income: 20k per year
Canada LP: It's a mailbox in ontario, no office or physical presence

Why I chose Canada LP?
Reason1: Write Invoices to my client in Switzerland. Canada has a reputation for high taxes. This way the Tax office in Switzerland will accept the invoices that I produce. This way my client has no problem to deduct his costs.
Reason2: To open up a paypal business account. (big fail). I knew beforehand that I cant open up a bank account in canada. But my consultant told me I can connect the paypal business account with transferwise. He told me he did it over 50 times with clients and it works.
Reason3: To have a legal Business structure. Because I am no resident of any country at the moment (digital nomad).

Costs:
1000$ for consulting. 2000$ for agency that setup the company for me. 1000$ recurring costs to the company after the first year.

How does it work out for me?
To be honest, It was a mistake for my case. I earn only 20k per year. Before you dont make 100k per year, you should not go through the hassle to open up a offshore company.
Good side: Yes I can write the invoices. I talked directly to the accountant of my client and she said its completely legal and accepted.
Downside: No Paypal Business account

I spoke to my high priced consultant and told him "the structure you recommended to me doesnt work". His answer was to use my private paypal account from Switzerland. But this is unprofessional. Clients will see my private name on every transaction. This is bulls**t.

What can I do?
I am looking for a credit card payment processor at the moment. I would also like to open up transferwise. I wish also I had a business bank account somewhere.

Consultant wanted!
If you are a respected member of this forum and think you can help me. I would be happy to pay you.

Merry Christmas

 

[fshore]

Hello Friends,

I went trough the whole process as a non-resident and I like to share my experience.

My income: 20k per year
Canada LP: It's a mailbox in ontario, no office or physical presence

Why I chose Canada LP?
Reason1: Write Invoices to my client in Switzerland. Canada has a reputation for high taxes. This way the Tax office in Switzerland will accept the invoices that I produce. This way my client has no problem to deduct his costs.
Reason2: To open up a paypal business account. (big fail). I knew beforehand that I cant open up a bank account in canada. But my consultant told me I can connect the paypal business account with transferwise. He told me he did it over 50 times with clients and it works.
Reason3: To have a legal Business structure. Because I am no resident of any country at the moment (digital nomad).

Costs:
1000$ for consulting. 2000$ for agency that setup the company for me. 1000$ recurring costs to the company after the first year.

How does it work out for me?
To be honest, It was a mistake for my case. I earn only 20k per year. Before you dont make 100k per year, you should not go through the hassle to open up a offshore company.
Good side: Yes I can write the invoices. I talked directly to the accountant of my client and she said its completely legal and accepted.
Downside: No Paypal Business account

I spoke to my high priced consultant and told him "the structure you recommended to me doesnt work". His answer was to use my private paypal account from Switzerland. But this is unprofessional. Clients will see my private name on every transaction. This is bulls**t.

What can I do?
I am looking for a credit card payment processor at the moment. I would also like to open up transferwise. I wish also I had a business bank account somewhere.

Consultant wanted!
If you are a respected member of this forum and think you can help me. I would be happy to pay you.

Merry Christmas

Could you upgrade your personal PayPal account to a business account and set a business name (should be possible even as a individual), then you wouldn't have to show your personal name.

Where is the company bank account that the Swiss client pays to?

 

[niggashit]

Stripe.com or Braintreee.com maybe.

 

[Derbo8]

Hello fshore,
thanks for your message, really appreciate the help.

Could you upgrade your personal PayPal account to a business account and set a business name (should be possible even as a individual), then you wouldn't have to show your personal name.

I already have a paypal business account in Switzerland. After 7500$ they started to ask for utility bills and business registration number. I don't want to get a business registration number in Switzerland because this automatically makes me liable to pay taxes in Switzerland

Where is the company bank account that the Swiss client pays to?

He pays to my private swiss bank account

 

[UScorp]

Hi, you can check Accounts | Simplii Financial and Small Business Banking | TD Canada Trust but i doubt that will open an account online. With you present at the bank it should not be a problem. Only solution I know which works online is www.paysera.com

 

[Derbo8]

Thanks UScorp for your help

Paysera (Lithuania)
Is a solid option to get a business account (didnt know about that)

TD Canada Trust
My consultants told me without a tax number I cant get a business account in Canada. But it could be a way:
1. produce canadian revenue
2.get a tax number in canada
3.fly to canada
4.open a business account
5.open a paypal account

But still I dont have a utility bill to verify my business paypal account.

Simplii Financial
According to their FAQ's "Business accounts are not offered at this time"

 

[Joe Blasco]

Thanks UScorp for your help

Paysera (Lithuania)
Is a solid option to get a business account (didnt know about that)

TD Canada Trust
My consultants told me without a tax number I cant get a business account in Canada. But it could be a way:
1. produce canadian revenue
2.get a tax number in canada
3.fly to canada
4.open a business account
5.open a paypal account

But still I dont have a utility bill to verify my business paypal account.

Simplii Financial
According to their FAQ's "Business accounts are not offered at this time"

Hi there I don t know if you re gonna read this after one year but clarify me something pls : you could not open a bank account because the Ontario LP did not have a tax number? Do you mean VAT registration ? Is it possible to incorporate and not get a tax id number ? Thank you...

 

[John Andrews]

Wait, why wouldn't it be possible to get a tax ID for the Canadian LP?

Fly to Canada, get the tax ID, open a bank account and set up a new, canadian paypal.

 

[fshore]

Also TDBank and other canadian banks don't do online wires. You have to go to the branch in person to send a wire. So not very convenient for a non resident account.

 

[Joe Blasco]

01

Also TDBank and other canadian banks don't do online wires. You have to go to the branch in person to send a wire. So not very convenient for a non resident account.

it s 2019 and they don t have internet banking ? This sounds incredible !!!

 

[Derbo8]

Hi there I don t know if you re gonna read this after one year but clarify me something pls : you could not open a bank account because the Ontario LP did not have a tax number? Do you mean VAT registration ? Is it possible to incorporate and not get a tax id number ? Thank you...

Cant remember exactly what the reason was, but I think only residents can open bank accounts because you need to proof utility bills.
Yes, I incorporated and not got a tax id number. Because I am not a resident of Canada and I dont have Canadian clients/income. As soon as I would earn money from canada clients, I would have to file taxes and would get a tax number.
At the moment my LP is pretty sweet, because I am a freelancer and I only need to send Invoices, clients pay directly to my private bank account in my old home country.

 

[Joe Blasco]

Cant remember exactly what the reason was, but I think only residents can open bank accounts because you need to proof utility bills.
Yes, I incorporated and not got a tax id number. Because I am not a resident of Canada and I dont have Canadian clients/income. As soon as I would earn money from canada clients, I would have to file taxes and would get a tax number.
At the moment my LP is pretty sweet, because I am a freelancer and I only need to send Invoices, clients pay directly to my private bank account in my old home country.

ok I got it , it s canadian law I guess , because in all the juristictions I know you either incorporate and have a mandatory , tax number-depends how they call it- even if your company will be dormant or you don t have a tax number because by law the company is exempted like an IBC. But I guess your Ontario LP has some kind of numerical ID type number XXXXXX, which you should include on your stamp, correct ? The banks as in a physical person they always ask for some kind of 666 numerical code for legal entities also. Thank you, have a great Sunday !

 

[Artemis Eleutheria]

Well, several options here

1. Open an account outside Canada ... Transferwise, Payoneer or some canadian bank abroad (but you may need personal proof of address somewhere)
2. Get that Canadian Tax ID simply by selling something on eBay Canada ... then open an account in Canada (but most likely you need to go there to do so).
3. Continue with current arrangement ... which seems very risky

 

[Joe Blasco]

Cant remember exactly what the reason was, but I think only residents can open bank accounts because you need to proof utility bills.
Yes, I incorporated and not got a tax id number. Because I am not a resident of Canada and I dont have Canadian clients/income. As soon as I would earn money from canada clients, I would have to file taxes and would get a tax number.
At the moment my LP is pretty sweet, because I am a freelancer and I only need to send Invoices, clients pay directly to my private bank account in my old home country.

Derbo8 offer me your wisdom once more pls: as proof of your LP' s existence you have a document probably from the ministry of finance in Ontario, that has your name listed as the major partner or the person authorized to sign documents in lieu of the patnership. But that's all, no other data on your person are included like date of birth, passport number, nationality etc Correct? Also in the document there must be an adress in Ontario where the registry of the limited partners should be kept. Thank you...

 

[Joe Blasco]

UPDATE
the Ontario LP costs 210 Canadian dollars =170 E to register and registration is valid for 5 years. It s a simple process of mailing "form 3" to the ministry of goverment services in Toronto with a money order and getting back in the mail the registration papers. The General partner acts like the director . An adress in Ontario should be included for the register of the limited partners to be examined when asked by the Registar (yeah sure) The tricky part: if you re out of Ontario and have no established place of business in Ontario you can have a reperesentative with power of attorney but only if the parternish was registered , before Ontario, in some other juristiction. The cheapest agent on the internet requires 2000 $ (not a bad yield) and then 1000$ each year for keeping the piece of paper with the limited partner(s) in his drawer desk. Others ask 3000$-4000$ the post box is further down on their street the . One catch is that Canada is not a member of Apostille , instead some canadian company certifies the authenticity and signature of the document and a stamp is placed from the embassy of the country where the document is supossed to be presented as an approve.
Agents do not write about this, why bother...

 

[Spinat]

Where are you going to open an account for this Ontario LP? You are a Canadian citizen right?

 

[Joe Blasco]

Where are you going to open an account for this Ontario LP? You are a Canadian citizen right?

No I ain' t and this is the beauty of the structure , as a legal formation does not have to declare it s proceedings. Only the partners do. So no accountancy, no auditing. The bad part , because it is so simple as you mention, it will be difficult- I guess- to open a bank account, maybe not who knows?

 

[Spinat]

You may be right.. But have you researched any bank for account opening of spoken to someone in Canada who claim he is able to open an account for this company?

You may check with TransferWise and PaySera if they are able to open anything.

 

[Joe Blasco]

You may be right.. But have you researched any bank for account opening of spoken to someone in Canada who claim he is able to open an account for this company?

You may check with TransferWise and PaySera if they are able to open anything.

yep bank should be a problem, that why I try to gather as much info beforehand as i can. Unfortunatelly very litlle exists. Personally opening an account would be no problem though.

 

[Joe Blasco]

this is form 3...The agent s adress should be on No 3 I guess but I do not know if No 8 is checked also for a non resident formation ( that means that the partnership has a representative in Ontario ( the agent ) BUT it is required that the partnership was formed in some other juristiction before. Derbo8 pls do you remember if you signed anything on form 3 ?