How Canadians Starting a Business in the USA Can Relocate

The United States is often thought of as the land of opportunity. Canada’s close proximity to it can make immigrating an appealing option, particularly if you want to start a business. The US has a robust economy and a diverse range of locations that make it attractive to business owners. If you’re a Canadian starting a business in the USA, here’s how to get started and potential financing options to help you down the line.

Look Into the Appropriate Visa

Any Canadian starting a business in the USA first needs to obtain the appropriate visa. There are different types that may be a good fit, depending on your situation.

L-1A Visa

If you’re moving your business from Canada to the US and not necessarily starting from scratch, look into an L-1A visa. Through this visa, an executive or manager from Canada could move to the US with the express purpose of starting a US office. You can learn how to move your business from Canada to the US with the help of an immigration lawyer.

E-2 Visa

The E-2 treaty investor visa allows Canadians to come to the US and invest in a US business. Typically, this requires substantial funding.

EB-5 Visa

The EB-5 Immigrant Investor Program allows Canadians and other immigrants to invest in a business in the US. This pathway may lead to becoming a permanent resident or a green card holder. However, you must meet the investment requirements, and the business must provide 10 full-time jobs to qualified US workers.

Each of these visa options has different eligibility requirements, pros and cons. Talking to an immigration lawyer can help you decide which option is best.

What To Do as a Canadian Starting a Business in the USA

If you’re a Canadian starting a business in the USA, here is a step-by-step guide to get started.

Choose a Business Name

Whether you’re a service or product-based business, you want to choose a name that is both memorable and easy to understand. Ideally, it’ll tell customers what you do, which can provide clarity to customers and be good for branding.

Start by brainstorming potential business names. But before landing on a specific name, due your diligence first:

• Check for trademarks: Check the trademark database on the United States Patent and Trademark Office (USPTO).
• Look at digital real estate: Whether you have a brick-and-mortar business or an online one, you’ll need to have a website and social media for marketing. Once you have some prospective names, check to see if the domain is available or currently in use. Do the same for social media handles on various platforms.
• Do your research: Put your potential business names in a search engine. Look at what comes up. Maybe you’re not infringing on a trademark, but you want to know what comes up in search when people look up your business name.

Once you take these steps, you can narrow down your options and select the best one.

Decide on a Business Structure

If you’re a Canadian starting a business in the USA, you need to become familiar with different business structures here. The type of business structure you choose will affect ownership, liability, and taxes. Here’s an overview of the most common business structures.

• Sole proprietorship: Usually one person who takes on full liability and tax obligations.
• Limited liability company (LLC): May be one or multiple members of the business. As the name highlights, business owners with this structure have limited liability.
• C Corporation: Under a C-corp, one or more people may have a business, and owners aren’t personally liable, according to the Small Business Administration (SBA). The entity also pays corporate tax.

Be sure to do your own research. Consider talking to a professional about tax and legal structures and what business structure is the best fit for your particular situation.

Apply for Your Employer Identification Number (EIN)

As a Canadian starting a business in the USA, you’ll need to get a federal tax ID called an Employer Identification Number or EIN.  But first, you’ll need an individual taxpayer identification number (ITIN).  As an immigrant, you may not have a Social Security Number like many US residents and citizens. Getting an ITIN is an alternative that can then be used to apply for an EIN.

First, fill out Form W-7 from the IRS to get an ITIN. Once that’s taken care of, you can apply for an EIN online.

Get Any Required Business Permits and Licenses

Depending on where your startup or enterprise is located, you may need to get certain business permits and licenses. This may vary by state and local laws, so do your research to make sure you have everything to get up and running. As a Canadian starting a business in the USA, make sure you have all the appropriate documentation you need to legally operate here.

File Articles of Incorporation with State

If you choose an LLC or Corporation business structure, you’ll need to file articles of incorporation with your state. Generally, you’ll do this through the Secretary of State.

You also will need a registered agent, who has the job of accepting important business documents such as lawsuits. There are registered agent services that you can use to help.

Get a Business Bank Account

Canadians starting a business in the USA will need to open a business bank account. An essential part of running a business is to separate any personal and business funds. You don’t want to mix your business revenue with your personal finances, which will only cause more of a mess. Look at different business accounts, potential fees or minimums, and eligibility requirements.

Stay in Compliance with Tax Laws

As a business owner, it’s important to stay in good standing with the Internal Revenue Service or IRS. That means paying your taxes on time. But as a Canadian starting a business in the USA, it’s not just federal taxes to be aware of. There may also be state and local taxes you’ll need to pay. Working with a tax professional like a CPA can help you stay in compliance with all relevant tax laws.

Look Into Financing Options

Canadians starting a business in the USA will have various startup costs. At some point, you may need financing options, either to grow or stay afloat. Though it can be challenging to secure business financing as an immigrant, it’s not impossible.

You may need to look for specialized lenders who work with these communities and may be more forgiving with the eligibility requirements. Oftentimes, applicants need to have a credit history and a specific length of time in business. Depending on where you’re at in your business, you may qualify for:

• Business credit cards: As a form of revolving credit, you can charge expenses on your business credit card, make payments, and access your credit again. If your lender reports your payment history to the major business credit bureaus, that’s a bonus. That can help build your credit history, which could help in the future with other financing options.
• Term loans: Canadians starting a business in the USA may have substantial financing needs. Beyond what business credit cards can offer. That’s where term loans can help. Immigrants may qualify for a term loan with certain lenders and get lump-sum funding upfront.
• Equipment financing: Depending on your type of business, you may need to purchase a lot of equipment. At such steep costs, it can feel out of reach. Through equipment financing, you can apply for either a loan or secure a lease.
• Merchant cash advance (MCA): Canadians starting a business in the USA who rely on credit card and debit card transactions may qualify for a merchant cash advance. Through this type of financing, business owners get a lump sum upfront. Instead of paying it back like a traditional loan, you pay it back with a percentage of your future sales transactions and any associated fees. While this can be convenient and can be easier to get than other financing, the associated costs can be steep.

Whether you’re just getting started with a new enterprise or you’re moving your business from Canada to the US, you have various options to look into. Be sure to pay close attention to eligibility requirements and research lenders that work with business owners getting established in the US.

Final Thoughts

Canadian entrepreneurs looking to start a US business can benefit from what’s often considered a business-friendly environment. Though any immigrant faces challenges starting a new business abroad, there are many opportunities. Immigrants from countries across the world make up the diverse fabric of the US economy.

Though Canadian citizens and other immigrants have to contend with US immigration and getting the appropriate visas, starting a business here can help you fulfill a dream.

FAQs About Canadians Starting a Business in USA

If you’re contemplating a big move, find out more information on being a Canadian starting a business in the USA.

Can Canadians Starting a Business in the USA Be Successful?

Canadians starting a business in the USA can be successful, due to the country’s population, diversity, and the power of the US Dollar (USD).

Is Moving a Business from Canada to US Possible?

Moving a business from Canada to the US is possible, but it will require paperwork and getting the appropriate visas. Discussing your situation with an immigration lawyer and looking into potential visas, getting a green card, etc., is a smart idea.

Which Business Structures Are Available in the US?

Multiple business structures exist in the US, including a limited liability company and a C corporation. For Canadians starting a business in the USA, choosing the right business structure is a key step.

Are Canadian Businesses Considering Relocation to US Due to Tariff Concerns?

Due to ongoing tariff concerns, there has been a rift in the long-standing US and Canada trade relationship, sparking some Canadian businesses to consider relocating to the US.

Which Canada to US Moving Companies Are Available?

If you’re a Canadian starting a business in the USA, you might need to move all your stuff from your home country to your new country. You can look for companies that specialize in cross-border moves.

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