To BC, or Not to BC? Choosing to Incorporate Your Business in British Columbia

You may be a Canadian startup based in British Columbia looking to formally incorporate your business. You may also be an established foreign business considering the creation of a Canadian subsidiary. In either case, business owners have wide discretion in choosing which Canadian jurisdiction is most desirable for the formation of a new corporate entity. In this article, we will explore some key elements to be considered when choosing to form a corporate entity under the laws of British Columbia or under federal law.

Residency Requirements

A key difference between the federal Canada Business Corporations Act and British Columbia’s provincial Business Corporations Act concerns residency. Federal corporations require that at least twenty-five percent of the directors of the corporation must be Canadian residents. If a corporation has less than four directors, at least one director must be a resident Canadian.

This is not the case for corporations formed in British Columbia. In stark contrast to the federal residency requirement, corporations formed under the laws of British Columbia do not require that its directors hold Canadian residency. As long as the business possesses an address for service in British Columbia, its directors can be residents of any other country. This is particularly helpful for entrepreneurs who have recently moved to Canada, or for foreign businesses looking to establish a presence in Canada vis-à-vis a subsidiary. It is worth noting that a number of service providers offer “virtual offices” for businesses that do not operate out of a physical location but are in need of an address for service.

Business Name Protection and Extra Provincial Registrations

Are you seeking to conduct business across Canada, or in one province? While both federal and provincial corporations can conduct business in several provinces, there are some key differences that are important to keep note of.

Incorporating federally enables a business to conduct operations in all provinces, provided that the appropriate registrations are filed in the relevant provinces. By extension, a business’ name will also be protected across the country, allowing the business owner to prevent third parties from incorporating under an identical name.

By contrast, a corporation formed under the laws of British Columbia will have its business name protected in the province alone and may only conduct business in BC – at least initially. If the business later decides that it wishes to expand operations in other Canadian provinces and territories, this can be achieved upon seeking and filing extra-provincial registrations.

Transparency Register Requirements

Previously, only corporations governed by the provincial legislation were required to maintain transparency registers which list, among other items, “significant individuals” with significant control over the activities of the corporation. Broadly speaking, a significant individual is deemed to be a person who is the registered or beneficial owner of at least 25% of the corporation’s issued or voting shares and has the power to appoint or remove a majority of that corporation’s directors.  Two or more individuals may also be captured by this qualification if together they meet such criteria.

Recent updates to the federal legislationnow require that a similar register is prepared and maintained for federal corporations.


The items above represent just some of the considerations of relevance when choosing where to incorporate. Understanding the business’ long-term goals and objectives will therefore be relevant for determining which jurisdiction of formation is most appropriate for your business-to-be.

If you have any questions about this article or wish to learn more, please contact Massimo Orsini or Allan Oziel. Oziel Law communications and legal articles are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. To obtain additional details or advice about a specific matter, please contact our lawyers.