Open a Liaison Office in Canada

Our company formationagents can explain the requirements for setting up a representative (liaison) office in Canada and offer legal representation in the process of registration.

What is the legal status of a representative office?

The representative office does not have separate legal personality from its founding parent-company, much like a branch office. The liaison office does not allow a foreign company to carry out commercial activities in Canada. However, there are many companies and banks in foreign countries which set up representative offices here in order to have a contact point between the Canadian customersand the foreign company located overseas.

What types of activities can the liaison office undertake?

The Canadian liaison office can engage in activities such as:

1. marketing;
2. market research;
3. promotion of the company’s services on the local market;
4. establishing contracts with local partners.

What are the types of representative offices in Canada?

The Canadian law provides for the following types of liaison offices:

• diplomatic missions;
• international organizations;
• consular missions;
• special representative offices;
• foreign banks’ liaison offices.

Is it necessary to appoint a representative?

Yes. The liaison office in Canada needs to have a representative (or more) who is assigned to be the responsible person for the activities of the new office set up in this country. During the process of company formation in Canada, the applicant must add to the application file documents regarding the person’s experience and duties as a representative.

How can a foreign company establish a representative office in Canada?

Even if starting a business in Canada implies filing several documents with Corporations Canada (the federal corporate registry) or a provincial business registry, in the case of a representative office the requirements are less strict. The parent company will be required to sent:

• specific application forms;
• its certificate of incorporation;
• the document appointing a local representative agent;
• information about the representative agent.

The infographic below offers basic details on the Canadian liaison office:

How can one set up a banking representative office in Canada?

If you operate in the banking industry and you want to set up a representative office in Canada for your business, you will need to comply with the local regulations concerning the incorporation of this entity. In the list below, our consultants in company registration in Canada have highlighted some of the main aspects you should be aware of:

• the registration and operation of the entity must be done as per the rules of the Foreign Bank Representative Offices Regulations SOR/92-299;
• the regulations have been in force since June 1, 1992 and were last amended on May 15, 2008;
• the law states that the liaison office in Canada is required to pay an annual fee before November 1st of each financial year;
• the value of the fee is of $2,500 and has to be paid for each representative office in Canada that was set up by the foreign company.

What documents are necessary to set up a banking liaison office in Canada?

Foreign investors must prepare many documents, which are customarily asked when starting the process of company formation in Canada for a commercial company. In the list below, we invite you to discover some of the main documentation you must submit:

• the details of the foreign bank (the parent company), such as headquarters, corporate name, etc.;
• information on the bank’s activities and operations;
• the proposed/ established address for the representative office in Canada;
• the name of the person who is appointed to act as the legal representative of the liaison office;
• a list of the activities that the appointed person is in charge with;
• information concerning the employment arrangements made for the liaison office.

What activities can a banking liaison office carry out?

A representative office set up by a foreign bank in Canada can develop the following operations:

1. promoting the services of the bank that has set up the office;
2. promoting the services of an overseas affiliate of the bank (local affiliates can’t be promoted by the banking liaison office);
3. acting as a liaise entity between the clients of the bank and its other offices or the offices of the bank’s affiliates incorporated overseas.

We invite you to watch a short video on the Canadian liaison office:

What are the minimum annual obligations of the Canadian liaison office?

Some of the obligations that appear on a yearly basis are:

1. paying a yearly fee and this applies to each of the liaison offices operating in Canada, if this is the case;
2. providing accurate information on the current number of employees;
3. submiting the financial statements of the foreign bank (the audited version).

Is it mandatory to have a registered address in Canada?

Yes, in order to open a liaison office in Canada, it is mandatory to have a registered address located in this country (a physical presence is mandatory).

Is it required to appoint a local director?

No, the liaison office does not require the appointment of a local director. More on this topic is available here.

Do liaison offices need to hire a minimum number of employees?

The law does not obligate the liaison office to hire a specific minimum number of employees, but it requires to evidence the maximum number of personnel estimated to be employed after the registration of the liaison office and the submission of the first statement (the requirement is imposed to representative offices set up by banking institutions).

How long does it take to register a representative office?

The procedure for company formation in Canada in the case of a liaison office can take several weeks (at least 2). Our specialists can offer more information on all the formalities involved in the process.

Please feel free to contact us if you are interested in setting up a liaison office in Canada.