Canada business bank account: Canadian or foreign company

Federal or provincial incorporation

A Canada business bank account is opened in the name of a company incorporated federally or in a province, or of a foreign business registered in Canada, after the bank identifies its directors and every individual with significant control. A company can be incorporated under the Canada Business Corporations Act or under a provincial statute, and the bank asks for the matching articles and certificate of incorporation.

A company can be incorporated under federal law, the Canada Business Corporations Act, or under the statute of a province such as Ontario, Quebec or British Columbia. For a business account in Canada, the bank asks for the matching articles and certificate of incorporation.

Resident Canadian director requirement

Federal law requires at least one quarter of directors to be resident Canadians; Ontario removed this rule in 2021 and British Columbia does not apply it. The choice also affects how easily a Canadian company account can be opened.

CRA business number and program accounts

The Canada Revenue Agency issues a nine-digit business number, extended by program accounts for GST/HST, payroll deductions or imports. The bank records it in the onboarding file and checks it against the name and address registered with the CRA.

Individuals with significant control

Federal corporations keep a register of individuals with significant control, publicly searchable through Corporations Canada since 2024. The bank identifies each of these individuals, signatories included, under the client identification rules set by FINTRAC, the federal financial intelligence unit.

Foreign businesses operating in Canada

A foreign company carrying on business in Canada registers as an extra-provincial corporation in the relevant province. With no establishment or local director, few banks accept the file, except for groups already clients elsewhere.

Business payments: EFT, Lynx and mobile deposit

Businesses pay suppliers and staff by electronic funds transfer (EFT) and, for large amounts, through Payments Canada’s Lynx system. Depositing cheques through a mobile app remains common among small businesses, which still receive many paper cheques from customers.

US dollar accounts for cross-border trade

Exporters to the United States keep a US dollar account to avoid systematic conversions. Firms exposed to currency risk can negotiate forward contracts with their bank on the basis of projected flows.

Opening a business account at a major bank

At Royal Bank of Canada (RBC), a small business owner living in Canada can apply for a business account online; a company owned by non-residents is directed to a branch adviser who checks articles, register and directors’ identity.

GST/HST and the registration threshold

GST/HST registration becomes mandatory above CAD 30,000 of taxable sales over four quarters. GST numbers on invoices and remittances paid from the account are often compared during the bank’s reviews.

Dividends, Part XIII withholding and form 3916

Dividends a Canadian company pays to a non-resident shareholder bear 25% withholding, reduced by treaty, for example to 15% for an individual resident in France, who also declares any Canadian account on form 3916.

How to open a Canada business bank account: the steps

The first step is to incorporate the company: federal or provincial, with its articles, certificate of incorporation and named directors. A Canadian bank does not open an account for a project still under consideration. Also check that the company has obtained its business number from the Canada Revenue Agency, because that number appears in the opening file.

Next, choose the institution and the right channel. An owner living in Canada can sometimes start online, but a company owned by non-residents is generally directed to a branch adviser. Ask in advance for the exact list of documents and whether you can book an appointment, because practices vary by bank, by province and by the profile of the business.

Finally, go to the branch with the directors and signatories concerned. Each person is identified, as is every individual with significant control. Depending on the bank, online services, cards and payments are then activated in stages. Write down the fees, limits and included services before signing the account agreement.

Documents to prepare for a business account in Canada

The first set of documents concerns the existence of the company: articles, certificate of incorporation, register of directors and, for a federal entity, the register of individuals with significant control. The bank checks that the name and address match exactly those on record. A difference in the company name between two documents is often enough to delay verification.

The second set covers the identity of the people: identity documents for directors, signatories and significant shareholders, together with proof of address. For non-resident directors, prepare passport copies and evidence of residence abroad. The bank applies FINTRAC rules to identify each person, including those who do not sign themselves.

The third set describes the activity: nature of the trade, main customers and suppliers, countries involved, expected volumes and origin of the opening funds. Add the GST/HST registration number if the company is liable. A simple description consistent with invoices and contracts reduces compliance questions and speeds up the handling of the file.

Common mistakes when a non-resident opens a business account

The most common mistake is to arrive with a foreign company that has no establishment or director on the ground. Few banks accept such a file, except for groups already clients elsewhere. Before choosing the structure, check whether the resident-director requirement applies to the chosen form and what practical solution meets that rule without artifice.

The second mistake is to describe the activity vaguely, or differently to different contacts. The bank compares your answers with the articles, the website, invoices and tax filings. Inconsistencies, even unintentional ones, can trigger an in-depth review. Prepare one written presentation and keep it for the future updates the institution may request.

Dividends paid to a non-resident shareholder bear withholding that treaties may reduce; the shareholder must also declare the Canadian account in the country of residence. Have an accountant validate these points before opening, to avoid a late regularisation and questions from the bank about the flows.

Questions to ask the bank before choosing a Canadian company account

First ask which account packages exist for a company of your size, which transactions are included in the monthly fee and what extra charges apply to transfers, deposits or international payments. Differences between banks can be significant. A comparison table built from written tariffs spares you from choosing on the impression of a first meeting.

Then ask the bank about payment methods: electronic funds transfers, large-value transfers, mobile cheque deposit and cards for employees. If you trade with the United States, ask how to open a US dollar account and what currency solutions are offered, on presentation of your projected flows.

Finally, check the monitoring rules: how often the file must be updated, what supporting papers are requested for large movements, the conditions for closing an inactive account and the deposit insurance that applies. Keep copies of every document supplied and your exchanges with the adviser. They serve as a reference if the bank reopens its review.

Decide first whether your company is incorporated federally or in a province, because the bank will ask for the matching articles and certificate of incorporation. If you are a foreign business operating in Canada, check what the bank expects before you apply, and make sure you know how GST/HST registration affects your accounts.

Follow the steps in order and prepare every document in advance. The usual mistakes made by non-residents are an incomplete list of individuals with significant control and unclear answers about the activity, so put your questions to the bank before choosing it.