{"id":125386,"date":"2026-01-12T09:37:46","date_gmt":"2026-01-12T09:37:46","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=125386"},"modified":"2026-01-12T09:37:46","modified_gmt":"2026-01-12T09:37:46","slug":"canada-investing-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/canada-investing-in\/","title":{"rendered":"Canada: Investing In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-125386","comparative_guide","type-comparative_guide","status-publish","hentry","guides-investing-in","jurisdictions-canada"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Baker McKenzie<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/Baker_McKenzie_Logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Baker McKenzie<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2019\/12\/Baker_McKenzie_Logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Investing In laws and regulations applicable in Canada<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please briefly describe the current investment climate in the country and the average volume of foreign direct investments (by value in US dollars and by deal number) over the last three years.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Canada continues to be a top destination for foreign direct investment (FDI), ranking among the most attractive countries globally for investors. Canada is projected to remain one of the most stable economies in the G7 and is recognized for its highly educated and talented workforce, strong infrastructure and extensive trade networks. It ranks second in the Kearney FDI Confidence Index and is forecasted to be the third-best country in the G20 for doing business over the next five years (2025-2029). These factors, combined with Canada\u2019s transparent regulatory environment and strategic location as a gateway to North America, underscore its growing competitiveness and appeal to international investors. Overall, investors tend to find certainty and reliability in the Canadian market.<\/p>\n<p>FDI inflows into Canada have shown a clear upward trend. In 2024, Canada attracted approximately \u00a0C$85.5 billion a 36% increase over 2023 and the highest level in a decade. This performance was 50% above the 10-year average, underscoring Canada\u2019s growing competitiveness in attracting global capital.<\/p>\n<p>Deal activity has also been robust. According to Invest in Canada, 883 projects were announced in 2024 and 660 projects were announced in 2023.<\/p>\n<ul>\n<li><strong>Manufacturing<\/strong><br \/>\nThis was the largest contributor to FDI growth in 2024. Automotive and advanced manufacturing projects dominated, supported by Canada\u2019s integrated supply chains and skilled labor.<\/li>\n<li><strong>Finance and Insurance<\/strong><br \/>\nThis was a major sector for foreign investment, consistently ranking among the top three for FDI stock.<\/li>\n<li><strong>Technology and Innovation<\/strong><br \/>\nTechnology and innovation are major drivers of FDI in Canada. This sector ranked second among all sectors for both capital investment and job creation and was surpassed only by business services in project count, highlighting the strong appeal of Canada\u2019s tech ecosystem for foreign investors.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical forms of Foreign Direct Investments (FDI) in the country: a) greenfield or brownfield projects to build new facilities by foreign companies, b) acquisition of businesses (in asset or stock transactions), c) acquisition of minority interests in existing companies, d) joint ventures, e) other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The three main types of FDI in Canada are:<\/p>\n<ul>\n<li><strong>Mergers &amp; Acquisitions<\/strong><\/li>\n<\/ul>\n<p>This was the largest category, accounting for approximately 49% of total FDI flows by value in 2024. M&amp;A activity includes both full acquisitions and minority interest purchases of Canadian companies by foreign investors. This form of investment allows foreign firms to gain immediate access to Canadian markets and assets.<\/p>\n<ul>\n<li><strong>Reinvestment <\/strong><\/li>\n<\/ul>\n<p>This represented approximately 28% of total FDI flows in 2024. This category reflects profits earned by foreign-owned Canadian affiliates that are kept within Canada to finance new capital investment, fund operations or held as cash for future use, rather than being repatriated.<\/p>\n<ul>\n<li><strong>Other Investment Types, including Greenfield<\/strong><\/li>\n<\/ul>\n<p>These types of deals made up approximately 23% of total FDI flows by value in 2024. This includes greenfield investments, intra-company loans and other financial flows.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to own 100% of a domestic company or business? If not, what is the maximum percentage that a foreign investor can own?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the Investment Canada Act (ICA), the foreign investment legislation of general application, foreign investors are permitted to own 100% of a domestic Canadian business. However, other federal statutes, including notably the telecommunications and broadcasting industries, have specific restrictions on foreign ownership.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign investors allowed to invest and hold the same class of stock or other equity securities as domestic shareholders? Is it true for both public and private companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, but as noted herein (including in our responses to Questions 2 and 8), there may be restrictions imposed by federal legislation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic businesses organized and managed through domestic companies or primarily offshore companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Typically, domestic businesses are organized and managed through domestic entities, such as subsidiaries (particularly, given the simplicity and speed with which entities can be established in Canada), but the organizational structures are influenced by factors such as tax optimization, regulatory issues, asset protection and capital market access.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the forms of domestic companies? Briefly describe the differences.   Which form is preferred by domestic shareholders? Which form is preferred by foreign investors\/shareholders? What are the reasons for foreign shareholders preferring one form over the other?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, the following business structures are used:<\/p>\n<p>a) General Partnership \u2013 This structure is easily formed, with low administration costs. Often the Partners enter into (but are not required to enter into) a partnership agreement to allocate profits and losses. The Partnership is not a separate legal entity. Income and losses flow through to the partners. The partners are jointly and severally liable for the Partnership\u2019s debts and obligations.<\/p>\n<p>b) Limited Partnership &#8211; A Limited Partnership is formed under applicable provincial or territorial statute by filing a declaration or certificate and fees with the applicable regulatory authority. It must have a general partner who controls the business and has unlimited liability for its debts and obligations. A limited partner\u2019s liability may be restricted to the amount of their contributed capital. As a general rule, limited partners are not permitted to participate actively in the management of the partnership, although the general partners may be restricted from taking certain actions absent the consent of the limited partners.<\/p>\n<p>c) Corporations \u2013 A corporation is formed under federal, provincial or territorial business corporate statute by, among other things, filing articles of incorporation and fees with the applicable regulatory authority. Shareholders have limited liability, meaning that they are only responsible for the debts of the Corporation up to the amount of their investment in their shares. Shareholders elect directors who manage the business and affairs of the Corporation as a separate legal entity. Corporations can borrow and raise money by issuing debt or shares. Corporations may be incorporated federally under the Canada Business Corporations Act (CBCA) or under the laws of a province or territory. There are no Canadian residency requirements for directors, except under the CBCA and in Manitoba which require at least 25% be resident Canadian. The Corporation continues to exist when the shareholders and directors change. Corporations may be private (with restrictions on public ownership) or public (with shares being publicly traded). Canadian controlled private corporations qualify for lower tax rates.<\/p>\n<p>d) Unlimited Liability Companies &#8211; The provinces of Alberta, British Columbia, Prince Edward Island and Nova Scotia permit the incorporation of an unlimited liability company (ULC). A ULC is treated, for Canadian tax purposes, as an ordinary corporation but may have special US tax treatment as a flow-through entity so are advantageous for tax planning However, unlike typical corporations, shareholders of ULCs are liable for all the debts and obligations of the ULC but the scope\/timing of these liabilities vary depending on the province.<\/p>\n<p>(A Sole Proprietorships, which is owned by an individual, is not discussed here.)<\/p>\n<p>Canadian investors prefer corporations since they are separate legal entities offering protection from liability. Foreign investors prefer the same, again due to limited liability and also for tax planning and compliance with legal requirements. However, ultimately the choice depends on the parent company\u2019s or investor\u2019s needs. For example, a ULC may be required for flow-through tax treatment. Partnerships are less frequently used since they are not advantageous for operating businesses and expose the parent to liability (and the same for the general partners in the case of limited partnerships).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements for forming a company? Which governmental entities have to give approvals? What is the process for forming\/incorporating a domestic company? What is a required capitalization for forming\/incorporating a company? How long does it take to form a domestic company? How many shareholders is the company required to have? Is the list of shareholders publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Corporations may be formed under the CBCA or under the business corporate statutes in any of the provinces and territories of Canada. Typically, a NUANS name reservation must first be made (if not a system generated number). The articles of incorporation (which include the name, registered office address, share structure, number of directors and other provisions) must be filed with the relevant corporate authority along with the NUANS report, if necessary, and applicable fees. Processing time depends on the jurisdiction. Online filings, with completed NUANs approval, may take only one business day in several jurisdictions, including under the CBCA, and up to six business days or much more in other jurisdictions. The quickest route is to form a numbered corporation.<\/p>\n<p>Once the corporation is formed, the initial director(s) will, among other things, approve a general by-law of the corporation relating to the transaction of its business and affairs, appoint officers, issue shares to the initial shareholder(s), set the financial year end and appoint auditors, if applicable. .<\/p>\n<p>A corporation must have at least one shareholder. There is no minimum share capital requirement. After incorporation, at least one share is issued for at least nominal consideration.<\/p>\n<p>Private corporations in all Canadian jurisdictions (except Alberta and the three territories) must maintain and annually update a transparency register (also called a register of individuals with significant control\/ultimate beneficiaries) which typically includes shareholders that have at least 25% control or ownership of voting securities.<\/p>\n<p>The full list of shareholders is not publicly available. However, for public companies (reporting issuers), under Canadian securities law, shareholders holding 10% or more of voting securities (on a partially diluted basis) must publicly disclose their holdings through publicly available securities filings. The transparency register noted above and maintained by a private corporation is not publicly disclosed, except that in a few cases, including under CBCA and for entities doing business in Qu\u00e9bec, limited information of individuals with significant control is publicly available, such as their names, addresses for service and descriptions of their significant control.<\/p>\n<p>Refer to our response in Question 19 for applicability of FDI approval\/notification related to the establishment of a Canadian business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the requirements and necessary governmental approvals for a foreign investor acquiring shares in a private company? What about for an acquisition of assets?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to the ICA, foreign investors acquiring shares or assets in a private Canadian business may be subject to a filing in the form of either a suspensory reviewable filing (i.e., a governmental approval) or an administrative notification, if the acquisition results in an acquisition of control, as further described in our response to Question 19.<\/p>\n<p>Whether an investment will be subject to governmental approval or an administrative notification will depend on a number of considerations, including whether the investment is direct or indirect, and\/or the enterprise value of the investment. In most cases, indirect acquisitions will generally only be subject to an administrative notification, whereas direct acquisitions are reviewable and will be subject to governmental approval if certain financial thresholds are met. Refer to our detailed response to Question 19.<\/p>\n<p>While there are generally no specific requirements for foreign investors seeking to make investments into a Canadian business, the country of residence of the foreign investor and the type of foreign investor may result in different financial thresholds to determine whether governmental approval will be required. For example, foreign investors that are residents or citizens of a country with which Canada has a trade agreement will only be subject to governmental approval if the enterprise value of the investment exceeds CA$2.079 billion (calculated pursuant to a prescribed formula under the ICA). Conversely, for example, a foreign investor that is a state-owned enterprise will be subject to governmental approval if the Canadian business has assets valued at CA$551 million. Note that thresholds are adjusted annually based on changes in Canada&#8217;s nominal gross domestic product.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a foreign investor need approval to acquire shares in a public company on a domestic stock market? What about acquiring shares of a public company in a direct (private) transaction from another shareholder?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>See our response to Question 8 above, which applies to the acquisition of shares in a Canadian public company on a domestic stock market. In addition, note that the enterprise value calculation for such an investment is based on the market capitalization, plus its liabilities minus its cash and cash equivalents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for a mandatory tender offer if an investor acquired a certain percentage of shares of a public company?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, subject to certain exemptions, Canadian take-over bid rules require that anyone who proposes to purchase from holders in a Canadian jurisdiction enough shares of a public company to increase their total holdings to 20% or more of the outstanding shares of that company must make the same offer to purchase to every shareholder of the company in Canada. This is done by way of a formal bid process set out in Canadian securities legislation. The 20% threshold includes shares underlying any warrants, options and other convertible securities held that can be exercised, whether or not on conditions, at any time within the following 60 days. The investor must also include the shares held by the parties with whom it acts jointly or in concert or may be deemed or presumed to act jointly or in concert. These include affiliates and may include associates. The investor may also have to include existing shareholders with whom the investor has entered into specific arrangements to acquire shares.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the approval process for building a new facility in the country (in a greenfield or brownfield project)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The approval process for constructing a new facility in Canada, whether a greenfield or brownfield project, involves multiple regulatory layers at the federal, provincial or territorial, and municipal levels.<\/p>\n<p>At the federal level, major projects may require an environmental assessment under the Impact Assessment Act, particularly if they have the potential for significant environmental effects, involve federal lands or intersect with areas of federal jurisdiction such as fisheries, navigable waters or Indigenous rights. Sector-specific federal regulations may also apply, including those governing energy, transportation or species protection. Indigenous consultation may also be required for projects that may affect Indigenous rights or lands.<\/p>\n<p>At the provincial or territorial level, each province has its own environmental assessment regime and sector-specific permitting requirements. For example, Ontario\u2019s Environmental Protection Act and related regulations require environmental site assessments and, for brownfield projects, a record of site condition to confirm remediation before redevelopment. Provinces also regulate land use, resource extraction and building standards. For brownfield projects, additional steps may be required by brownfields regulations, which include environmental site assessments (Phase I\/II), remediation planning and confirmation of cleanup through provincial or municipal processes.<\/p>\n<p>At the municipal level, development is governed by zoning laws, land use permits, building codes and local environmental requirements. Municipalities oversee site plan approvals, building permits and may require additional environmental documentation, especially for brownfield sites.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can an investor do a transaction in the country in any currency or only in domestic currency? a) Is there an approval requirement (e.g. through Central Bank or another governmental agency) to use foreign currency in the country to pay: i. in an acquisition, or, ii. to pay to contractors, or, iii. to pay salaries of employees? b) Is there a limit on the amount of foreign currency in any transaction or series of related transactions? i. Is there an approval requirement and a limit on how much foreign currency a foreign investor can transfer into the country? ii. Is there an approval requirement and a limit on how much domestic currency a foreign investor can buy in the country? iii. Can an investor buy domestic currency outside of the country and transfer it into the country to pay for an acquisition or to third parties for goods or services or to pay salaries of employees?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investors may transact in any currency, but Canadian transactions are usually conducted in Canadian dollars. There is no approval requirement for how much foreign currency a foreign investor can transfer into the country, but amounts of C$10,000 or more in currency or monetary instruments (such as cheques, promissory notes, bank drafts, securities, including stocks, bonds, debentures and treasury bills) must be declared to the Canada Border Services Agency. Electronic funds transfers of C$10,000 or more are reported by the financial institutions to Financial Transactions and Reports Analysis Centre of Canada.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there approval requirements for a foreign investor for transferring domestic currency or foreign currency out of the country? Whose approval is required? How long does it take to get the approval? Are there limitations on the amount of foreign or domestic currency that can be transferred out of the country? Is the approval required for each transfer or can it be granted for all future transfers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no approval requirements. See our response to Question 12.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on foreign currency conversion?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a tax or duty on bringing foreign or domestic currency into the country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, but amounts of C$10,000 or more must be declared. See our response to Question 12.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a difference in tax treatment between acquisition of assets or shares (e.g. a stamp duty)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no stamp duty. There is significant difference in tax treatment between the acquisition of assets and shares. Share acquisitions are generally more beneficial to the seller from a tax perspective due to potential advantageous capital gains treatment while a higher purchase price paid by the buyer for the business will not generally be reflected in the tax basis of the target company\u2019s assets after the acquisition. However, asset acquisitions may be more favourable to buyer due to the buyer\u2019s tax basis generally reflecting the purchase price thereby allowing for higher future depreciation or amortization deductions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">When is a stamp duty required to be paid?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no stamp duty.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shares in private domestic companies easily transferable? Can the shares be held outside of the home jurisdiction? What approval does a foreign investor need to transfer shares to another foreign or domestic shareholder? Are changes in shareholding publicly reported or publicly available?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Shares may only be transferred in accordance with the articles of the corporation which set out restrictions on share transfers. These restrictions typically limit the number of shareholders and require the consent of directors or shareholders to transfer shares. Subject to these provisions and any other restrictions contained in a unanimous shareholder agreement, shares are transferred with an instrument of transfer such as a stock transfer form. Shares may be held outside of the home jurisdiction. Please see the discussion of the transparency registry in our response to Question 7 to determine if a change in shareholding is publicly available.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a mandatory FDI filing? With which agency is it required to be made? How long does it take to obtain an FDI approval? Under what circumstances is the mandatory FDI filing required to be made? If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked? If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that\u2019s been acquired has a subsidiary in your jurisdiction), could such a transaction trigger a mandatory FDI filing in your jurisdiction? Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><ul>\n<li><strong>With which agency is it required to be made? <\/strong><\/li>\n<\/ul>\n<p>Mandatory foreign investment filings must generally be submitted to the Foreign Investment Review and Economic Security (FIRES) branch of Innovation, Science and Economic Development Canada (ISED). However, where the control of a Canadian business being acquired is a cultural business, a filing to the Cultural Sector Investment Review (CSIR) of the Department of Canadian Heritage will be required.<\/p>\n<ul>\n<li><strong>How long does it take to obtain an FDI approval? <\/strong><\/li>\n<\/ul>\n<p>Where an acquisition of control is subject to FDI approval, i.e., is subject to suspensory <u>review<\/u>, the Canadian government has 45 days to determine whether to allow the investment based on whether the investment is deemed to be a net benefit to Canada. The Minister of Innovation, Science and Industry (Minister) may provide a notice during the initial 45-day period unilaterally extending the review period by 30 days. The Minister and foreign investor may then agree to further extend the review period, if necessary.<\/p>\n<p>In the case of investments in cultural businesses, the review will usually require at least 75 days to complete.<\/p>\n<p>Where an acquisition of control is not reviewable, but rather an administrative <u>notification<\/u> is required, the FIRES or CSIR branches will typically issue a certification letter (which certifies that the notification was complete and the investment is not reviewable) up to four weeks (but generally less) after receipt of a complete notification.<\/p>\n<p>Further, if a filing is submitted and the investment is subject to national security scrutiny, Canada&#8217;s jurisdiction to review the investment on national security grounds ends 45 days from the date the filing is certified as complete. Additionally, if the investment is also subject to a national security review, which we discuss in detail below, the review can take up to 200 days or longer in complex cases.<\/p>\n<ul>\n<li><strong>Under what circumstances is the mandatory FDI filing required to be made?<\/strong><\/li>\n<\/ul>\n<p>Generally, a filing is required where there is: (i) an \u201cacquisition of control\u201d of an existing Canadian business through the acquisition of either voting interests (as further described below) or all or substantially all of the assets used in carrying on that business in Canada; or (ii) the establishment of a Canadian business.<\/p>\n<p>With respect to a corporation, an \u201cacquisition of control\u201d is presumed to occur when a non-Canadian acquires one-third or more of the voting interest of that corporation. However, this presumption may be rebutted if there is evidence that the non-Canadian has not actually acquired control and the interest being acquired is between 33.3% and 49.9%. In other words, the presumption may not be rebutted where a majority interest is acquired.<\/p>\n<p>With respect to other entities (e.g., partnership, trust or joint venture), an acquisition of a majority of the voting interests is necessary to be considered an acquisition of control of that entity.<\/p>\n<ul>\n<li><strong>If a mandatory filing is not required, can a transaction be reviewed by a governmental authority and be blocked? <\/strong><\/li>\n<\/ul>\n<p>Yes. The national security provisions of the ICA, which allow the Canadian government to review and potentially block transactions on national security grounds, are much broader than the filing requirements as they capture all investments into Canadian businesses (i.e., they do not require an acquisition of control or exempt investments that involve less than an acquisition of control). Therefore, an investment may be reviewed and blocked on national security grounds even if a mandatory filing is not required.<\/p>\n<p>The national security provisions permit a non-Canadian investor to submit a voluntary notification to obtain certainty that the investment raises no national security concerns in Canada. If a voluntary notification is filed, the Government of Canada&#8217;s jurisdiction to review the investment on national security grounds ends 45 days from the date the filing is certified as complete. Therefore, if a voluntary filing is made pre-closing it would eliminate post-closing national security risk. If a voluntary notification is not filed pre- or post-closing, then the Government of Canada&#8217;s jurisdiction to review the investment on national security grounds only ends five years after the date the investment is implemented.<\/p>\n<ul>\n<li><strong>If a transaction is outside of the home jurisdiction (e.g. a global transaction where shares of a foreign incorporated parent company are being bought by another foreign company, but the parent company that\u2019s been acquired has a subsidiary in your jurisdiction, could such a transaction trigger a mandatory FDI filing in your jurisdiction? <\/strong><\/li>\n<\/ul>\n<p>Yes, an indirect acquisition of control of a Canadian business may be notifiable or reviewable where the financial thresholds are met. Most indirect acquisitions of control are notifiable only (i.e., not reviewable). This is because, for example, indirect acquisitions involving a WTO investor (including a state-owned enterprise) are not reviewable; however, this exception does not apply to a cultural business.<\/p>\n<ul>\n<li><strong>Can a governmental authority in such a transaction prohibit the indirect transfer of control of the subsidiary?<\/strong><\/li>\n<\/ul>\n<p>Yes. Where an indirect acquisition of control is reviewable, it can be blocked by the reviewing authority (FIRES or CSIR). Where an indirect acquisition of control is notifiable, it may still be blocked on national security grounds.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are typical exit transactions for foreign companies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Typical exit transactions for foreign companies are the same as those for domestic companies. These include mergers &amp; acquisitions (usually involving sale of shares to a strategic or financial investor), management buyouts and, if necessary, liquidation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do private companies prefer to pursue an IPO? i. on a domestic stock market, or ii. on a foreign stock market? iii. If foreign, which one?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The decision to pursue an IPO depends on, among other things, market conditions, the financial strength of the company, investor base, competitive positioning and management team. Private companies generally do not pursue an IPO due to significant initial and ongoing costs, length of process, increased regulatory burden (including additional financial reporting and loss of privacy) and loss of control. The main exchanges in Canada are the Toronto Stock Exchange, for senior issuers, and the TSX Venture Exchange, for junior, early-stage companies. There are other stock exchanges as well as alternative trading systems that match buyers and sellers on different electronic trading platforms with lower transaction costs. Whether a foreign company pursues a listing or a dual-listing on a US stock exchange (such as the Nasdaq Stock Market or the New York Stock Exchange) with enhanced access to capital, will depend on its strategic business objectives and perceived regulatory advantages.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do M&amp;A\/Investment\/JV agreements typically provide for dispute resolution in domestic courts or through international arbitration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Such agreements typically provide for dispute resolutions through domestic courts or international arbitration, depending on the parties and nature of the agreement. Where all the parties are Canadian, Canadian courts may be chosen as the forum for dispute resolution, but there has been an increased use of arbitration clauses. In cross-border agreements, there has also been an increase in dispute resolution clauses providing for international arbitration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How long does a typical contract dispute case take in domestic courts for a final resolution?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The duration of a contract dispute depends on the complexity of the case, the jurisdiction of the court, court backlog, party co-operation and the parties\u2019 willingness to settle, it is difficult to predict how long a contract dispute takes. While simple cases can take less than two years, complex cases may take five or more years.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are domestic courts reliable in enforcing foreign investors rights under agreements and under the law?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Many Canadian provinces provide a statutory mechanism for the enforcement of judgments from certain reciprocating foreign jurisdictions under conventions or other bilateral arrangements. Otherwise, Canadian courts will recognize foreign judgments provided that there is a &#8220;real and substantial connection&#8221; between the subject matter of the action or the damages suffered by the plaintiff and the jurisdiction rendering the judgment. That is so even if the defendant does not attorn to the jurisdiction of the foreign court or is not otherwise within its jurisdiction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there instances of abuse of foreign investors? How are cases of investor abuse handled?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Canada has strong and reliable legal protections for foreign investors. If mistreatment is alleged or challenges arise, foreign investors can seek legal recourse through various legal and regulatory mechanisms, including through, as applicable, multilateral, regional and bilateral trade and investment agreements and WTO dispute settlements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are international arbitral awards recognized and enforced in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Canada is a party to several international arbitration conventions, including the New York Convention, UNCITRAL Model Law on International Commercial Arbitration and ICSID Convention, Canada is also a party to several free trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Canada-United States-Mexico Agreement, which include arbitration provisions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there foreign investment protection treaties in place between your country and major other countries?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Canada is currently party to 37 bilateral investment treaties in force and 19 Treaties with investment provision in force. Canada is part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, UK and Vietnam. The CPTPP includes investor protections and an investor state dispute settlement mechanism. Canada is currently part of a preferential free trade agreement, the Canada-United States-Mexico Agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4916<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/125386","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=125386"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}