c corporation for canadian resident

Question

2282 viewsMay 28, 2019Cross Border Tax

0

Viktor Osipov (anonymous) Posted May 27, 2019

Hi Allan,

Thank you for helpful website and blog. I have a question. Currently, I am the owner of Canada Corporation. My business is in the e-commerce field and I sell in the USA only. Because of business circumstances, I must register my business in USA. I’ve learned LLC is not a good idea for Canadians. C Corporation looks like a perfect fit for my business. My questions:
1) Which Canadian tax implications can my C Corp meet once I register it in USA?
2) Is it better to register my C Corp through my Canada Corp or to my personal name?
3) Can I dissolve my Canada Corporation (I don’t do any business in Canada) in order to get the best tax benefits for my US C Corporation in Canada?
Thank you for your answers.

1 Answer

score 1 · Answer 1 · 2019-05-28T14:54:49+00:00

Doing business in the US through a US C-corporation is very tax efficient. I recommend that you make your existing Canadian corporation the owner of your newly created C-corporation. Consider the following points:

> The US federal income tax rate is 21% on the business profits generated by a
US C-corporation.
> Consider forming a US C-corporation in the State of Wyoming in order to avoid
State Income Tax. Wyoming does not impose a State Income Tax.
> Dividends can be paid by a US C-corporation to its Canadian parent
corporation. The Canadian parent corporation can claim a tax deduction for the
full amount of the dividend received.
> Eligible dividends can be paid from the Canadian corporation to you. Eligible
dividends are taxed at a low rate.

c corporation for canadian resident

1 Answer

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