Starting a business in Canada costs as little as $60–$350 to register depending on your structure and province. Over 100,000 new businesses are started in Canada each year. Here’s exactly how to do it.
Step 1: Choose Your Business Structure
| Structure | Liability | Tax Rate | Registration Cost | Best For |
|---|---|---|---|---|
| Sole proprietorship | Unlimited personal | Personal rate | $0–$100 | Freelancers, side hustles |
| Partnership | Shared personal | Personal rate | $0–$100 | Co-founders |
| Corporation | Limited | 12.2–26.5% | $200–$350 | Growing businesses, liability protection |
| Cooperative | Limited | Corporate rates | $200+ | Member-owned businesses |
The Corporation Tax Advantage
| Income | Personal Tax Rate (ON) | Corporate Tax Rate (SBD) | Savings |
|---|---|---|---|
| $50,000 | 29.6% | 12.2% | $8,700 |
| $100,000 | 33.9% | 12.2% | $21,700 |
| $200,000 | 46.4% | 12.2% (first $500K) | $68,400 |
Small businesses pay just 12.2% combined federal/provincial tax (Ontario) on the first $500,000 of active business income.
Step 2: Register Your Business
| Task | Where | Cost | Timeline |
|---|---|---|---|
| Choose a name | NUANS search | $13–$80 | 1 day |
| Federal incorporation | Corporations Canada | $200 (online) | 1–5 days |
| Provincial registration | Provincial registry | $60–$300 | 1–7 days |
| Business Number (BN) | CRA | Free | Immediate online |
| GST/HST registration | CRA (if revenue >$30K) | Free | Immediate |
| Business bank account | Any bank | $0–$10/month | 1 day |
Step 3: Understand Your Taxes
| Tax | Rate | When |
|---|---|---|
| GST/HST | 5–15% | Quarterly or annual filing |
| Corporate income tax | 12.2–26.5% | Annual (T2 return) |
| Payroll taxes (CPP, EI) | ~7.5% of payroll | Each pay period |
| Provincial corporate tax | 0–16% | Included in T2 |
Register for a GST/HST number once revenue exceeds $30,000/year (the small supplier threshold). Below that, registration is optional.
Step 4: Funding Options
| Source | Amount | Requirements |
|---|---|---|
| Canada Small Business Financing Program | Up to $1M | Revenue-generating business |
| BDC (Business Development Bank) | $25K–$100K+ | Business plan, some revenue |
| Provincial grants | $5K–$50K | Varies by province and program |
| Futurpreneur | Up to $60K | Ages 18–39, with mentorship |
| SRED tax credits | Up to 35% of R&D costs | Innovation/tech businesses |
| Personal savings/LOC | Varies | Most common startup funding |
Bottom Line
Starting a business in Canada is straightforward: choose your structure, register ($60–$350), get a business number, and open a business bank account. The small business tax rate of 12.2% is a major advantage over personal income tax. Start as a sole proprietorship and incorporate when revenue exceeds $50,000–$75,000 or when you need liability protection.
See our small business grants guide or self-employed tax guide for next steps.
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