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Registering a corporation by a Refugee

Hi there,

My client has refugee status and has a work permit. He is asking if he can incorporate a corporation in Canada?

I have already called Service Ontario, Immigration Canada, CRA Business enquiry line & CRA Non-Resident Registration service. Unfortunately, nobody gave a definitive answer. Do I need to consider Provincial vs Federal corporation.

Please share your thoughts.

Thanks in advance.

I don’t know why there would be any prohibition on the person incorporating or being a Director. If resident in Canada and a province and (generally) > 18 years old, not mentally incompetent under various Acts, and not bankrupt he can be a Director. I don’t think I’ve ever seen a prohibition on incorporating as even non-residents of Canada can incorporate here. There may be other issues but actually incorporating shouldn’t be one.

One would presume that a lawyer will do the incorporation (or is he self-filing?). The lawyer should certainly know.

In Ontario, at least 25% of the directors (or at least 1 if there are fewer than 4 directors) must be Canadian residents so that may be a problem for your client. I assume other provinces have similar legislation. The company would also not be a CCPC if your client is not a Canadian resident. That would have various consequences (no small business deduction perhaps being the biggest issue).

Bear in mind that is a factual resident, which someone living here as a refugee (pro tem and for some likely extended period) arguably would be. No requirement for citizenship, and at a guess…if a Director isn’t a resident, it’s only an issue if someone actually complains (eg. about some form of malfeasance)?

I just checked the Ontario Business Corporations Act. The clause requiring 25% Canadian resident officers is being repealed as of July 5, 2021.