The residency of an Ontario corporation can become quite complicated. Usually, it will be determined on the basis of the common law rules related to residency. That is usually the location of the actual management decisions being made by the corporation.
Residency will also be influenced by the residency of the Directors on the Board, the majority of Directors on the Board and so on. It is also possible for a corporation to be treated as a resident for one purpose and a non-resident for other purposes. Usually, upon incorporation, this is the outstanding task at hand. So, the process undertaken will attempt to weigh in favour of the desired outcome.
Obviously, make this issue clear with the lawyer who is setting up the corporation. This shouldn’t come as a surprise afterwards. There are significant tax implications.
Brian Madigan LL.B., Broker