There is a lot to think of when choosing the right place to start or grow your business. And it looks like many entrepreneurs are torn between two attractive countries: Canada and the USA.
Both countries have an amazing business environment. But let’s have a closer look at each of them.
We All Care About Taxes, Don’t We?
Simple as that, but one of the main aspects that attract entrepreneurs to Canada is lower corporate taxes.
The corporate income tax in the U.S. is 21%, while in Canada, it is 15%, 3% lower than it was ten years ago. That means that if your business generates $1 million a year, you can save $60,000 by opening a business in Canada.
And that counts as an advantage or Canadian business environment for both those who want to start a business and those who want to expand the existing one.
Is Canada Safer For Businesses?
There is no simple answer to that. However, many entrepreneurs claim that Canadian banking system is more trustworthy. Of course, there is history under it.
It seems like the American banking industry was far more fragmented and local, which resulted in a trial period. Yet some may say that they wouldn’t have the most comprehensive banking system if it was not for all the failure experienced and changes that have been made. Since the economic depression, banks have spent much time raising business capital. This has made it possible for banks in Canada, making them more trustworthy according to the consumers, to have greater influence than U.S. banks.
So, even though the Canadian Bank is younger than the first bank of the US, it has gained respect and trust over the time.
The feeling of safety could be a worthy reason to move with your business to Canada from anywhere in the world. That is not a simple step, of course. You may need the help of financial experts to help you transfer the business and the help of immigration consultancy for Canada to plan your immigration smoothly.
But the time and effort could be worth it. It’s not only about safety, it’s also about the agile environment newborn startups are bringing in to Canada.
Which Country Is The Choice Of Startups And Investors?
Probably, we still think about Silicon Valley investors when hearing the word “startup”. Or at least many people used to think that. Now, it’s getting less clear where the startups actually “live and prosper” more – in the US or Canada. You may hear people calling Toronto “the new Silicon Valley”.
But that hasn’t been like that just ten years ago. Canada didn’t seem attractive for both startupers and investors. Since then, startups centers have evolved, all focused on discovering, creating, and helping to grow new companies, and it has undoubtedly succeeded. Not only have tech startups started expanding, with about four thousand startups located in Toronto alone, but in both Toronto and Montreal, major tech firms such as Facebook and Google also have a strong presence.
Another fact to consider is that the US is known to have more competition. Such a wild market may scare away newborn startups and make Canada look more attractive for them. And, thus, for investors, too.
We may also mention that housing in Canada is less expensive than the one in the US. That is especially a great attraction for young entrepreneurs who want to invest all the resources into their business.
Canadian Market VS The US One
A deep research would be needed to see the comparison of two countries’ markets. However, we may have a look at such an important aspect as the markets’ openness.
The USA is known to have an open market. But in an open market, those that pay business income tax are not forced to get corporations out of trouble. This only shows the extent to which the U.S. government interferes with the economy. In the US the government has the right to interfere at any moment and this should be a concern for entrepreneurs.
Canada provides a freer market compared to the United States, given the evidence and is a lot more entrepreneur friendly. Since 80s, Canada has been taking small steps toward a freer market. The corporate tax rate in Canada is one of the lowest amongst the G8 countries. The spending cuts in Canada in the 90s were also attributed to a 15-year booming economy, and it ended when the entire world was pulled into recession by the U.S. Canada seemed to have worked it all out and was heading to establish a free market.
And an open market matters for businesses. It brings innovation and drives truly needed products and services. Also, it makes business owners “the game changers” and that brings a wonderful feeling of freedom appreciated by entrepreneurs.
We can’t help noticing the fact that more and more businesses are thinking of Canada as a better place for living and working.
However, there is no simple answer whether the US or Canada makes a better place for businesses to grow and prosper. A lot of factors would need to be considered in each individual case.
So, you may try to live for a while as tourist to see what is a better choice for your comfort and for your business goals.