setting up a business - help pls

[jw01]

hey everyone!

i hope you guys can direct me or help me in some form. I tried calling government offices but they really dont know; keep directing me to different offices etc. but anyways, hopefully someone in this forum has some background or knowledge (know-how). here is the issue...

i have 4 ppl in asian who are willing to open/operate a business from canada. they are non residents/citizens. from that you can conclude that none of them can register a business in canada. what they want is, open a business in canada (all 4 of them together) and sell (export) their product through agencies in asian (having a canadian name to it)....they would like me to do some form of administrative work (not be involved financially, rather do the tax return, file paperwork etc).

b/c they are not citizens etc, partnership is out of the question. Sole prop. under my name is not likely b/c they would not like that (as all of them have stakes in the company and i will be investing no money, rather serve as a sole employee of the company), so SOLE PROP. is out of the questions.

corporation seems like the only legit. solution, however, will i have to be involved financially? or can i register the corp. under my name and be a stakeholder and do the paperwork? please note the other 4 stakeholders would take the ceo and other positions and are all non residents.

so from reading all this, hopefully you guys can clear somethings out for me or other options you see. they would like to get an answer soon so i would like to tell me what options we have and what we can do. please let me know if you guys have any input or any opinion. thxs

cheers,
j

 

[ray liotta]

Do they already have a formed company in whatever country it is in Asia?
Then it would be a branch office-you would have to set up an Inc. here, yes you would have to be one of the officers. Also if they have money, have them send you a couple of thousand dollars and go and invest it in having a local corporate lawyer set it up right. From what you have said it sounds doable, depends if they have funds to get it set up correctly or not.

 

[twentynine]

My advice -- stay far away from this. If you don't know these people well (years) then its probably a scam. Even if it is legit, getting you involved in a corporation would put you legally responsible for that corporation's actions. If you are not the board of directors, this is especially a bad deal. Stay away, stay away, stay far away.

 

[tboy]

I second the "stay far away" comment. IMHO this sounds like a scam or even an immigrant smuggling operation. If these guys are legitimate businessmen they'd have corporate lawyers who have knowledge of offshore ownership of a company in Canada. Obviously they don't.

Before getting anymore involved I would ask these questions:
1) What is the main product or service this company will offer?
2) What is the planned financial income this company will realize?
3) Other than yourself, what other employees will be located in Canada?
4) If they are importing into Canada, what products will they be importing?
5) What companies (specific names) will this Canadian company be dealing with in "asia"????

There isn't any major hurdle with offshore people owning and operating businesses in Canada (Honda for eg) but there are specific criteria that have to be met......

 

[ruck]

If these guys are legitimate businessmen they'd have corporate lawyers who have knowledge of offshore ownership of a company in Canada. Obviously they don't.......

Not true. Just because someone is interested in starting a business does it mean:

1. that they are rich
2. that they are business savvy
3. that they have lawyers at their disposal
4. that they would have a clue as to how it works here

I'm somewhat of a businessman but I wouldn't know where to start if I wanted to start something in China.

P.S. - I would turn it down as well.

 

[jw01]

just to clarify something lol, appreciate the input fellas...

one of the guys is my uncle, so no scamming there lol. and second of all, they are rich. they just want to register a business in canada and sell the product (a messenger type service) in asian to its selected demographics and go global if its successful in the asian market. i have contacted my lawyer, but he is busy so he has not replied back so i thought i'd ask yu guys about your opinion of what i can do and wat is possible....let me know...thxs guys

cheers!

 

[fantasiafan]

just to clarify something lol, appreciate the input fellas...

one of the guys is my uncle, so no scamming there lol. and second of all, they are rich. they just want to register a business in canada and sell the product (a messenger type service) in asian to its selected demographics and go global if its successful in the asian market. i have contacted my lawyer, but he is busy so he has not replied back so i thought i'd ask yu guys about your opinion of what i can do and wat is possible....let me know...thxs guys

cheers!

If they are in asia, and are selling this service/product to asia, then why do they want to set up shop here? Whats the benefit? The taxes?

 

[tboy]

I'm somewhat of a businessman but I wouldn't know where to start if I wanted to start something in China.

You wouldn't but your corporate lawyer would (know the first place to start).

As for the biz: I can't see any benefit of offerring a messenger service to asians in asia from here. Unless of course he will be offerring the service to asians here, to send messages there.....

Not to be a smartass but, don't they already have something called...errr, ummm, the mail? and ummmm the internet?

 

[scribbler]

It is not really a problem. Depending on what amount $ you would like to spend there are several good law firms that specialize in this. In most cases you can designate the Law Firm to act as the secretary and use the Law Firm address. as the Canadian Head Office. Alternatively, visit a local branch of the HKSB Bank. They specialize in offshore business. There are many offshore businesses that operate in Toronto under the same circumstances. Good Luck.

 

[l69norm]

....corporation seems like the only legit. solution, however, will i have to be involved financially? or can i register the corp. under my name and be a stakeholder and do the paperwork? please note the other 4 stakeholders would take the ceo and other positions and are all non residents...

This web page has a lot of info for incorp. a company in Ontario:

http://www.cbs.gov.on.ca/mcbs/english/5HTTCP.htm

....Majority of directors must be Canadian residents. Where there are 1 or 2 directors, at least 1 must be a Canadian resident...

It's about $600- $700 to register a corp in Ontario and it can all be done on-line in less than a day

 

[RTRD]

Exactly....

My advice -- stay far away from this. If you don't know these people well (years) then its probably a scam. Even if it is legit, getting you involved in a corporation would put you legally responsible for that corporation's actions. If you are not the board of directors, this is especially a bad deal. Stay away, stay away, stay far away.

...no way this goes well.

 

[K Douglas]

hey everyone!

i hope you guys can direct me or help me in some form. I tried calling government offices but they really dont know; keep directing me to different offices etc. but anyways, hopefully someone in this forum has some background or knowledge (know-how). here is the issue...

i have 4 ppl in asian who are willing to open/operate a business from canada. they are non residents/citizens. from that you can conclude that none of them can register a business in canada. what they want is, open a business in canada (all 4 of them together) and sell (export) their product through agencies in asian (having a canadian name to it)....they would like me to do some form of administrative work (not be involved financially, rather do the tax return, file paperwork etc).

b/c they are not citizens etc, partnership is out of the question. Sole prop. under my name is not likely b/c they would not like that (as all of them have stakes in the company and i will be investing no money, rather serve as a sole employee of the company), so SOLE PROP. is out of the questions.

corporation seems like the only legit. solution, however, will i have to be involved financially? or can i register the corp. under my name and be a stakeholder and do the paperwork? please note the other 4 stakeholders would take the ceo and other positions and are all non residents.

so from reading all this, hopefully you guys can clear somethings out for me or other options you see. they would like to get an answer soon so i would like to tell me what options we have and what we can do. please let me know if you guys have any input or any opinion. thxs

cheers,
j

So let me get this straight:
1) citizens/residents of Asian country(ies) want to setup a Cdn corporation with the purpose of exporting Cdn products (with a Cdn name) to various Asian markets
2) Cdn corp will be making profit and paying tax on it in Canada? or paying a salary/dividend to shareholders (Asians)?
3) jw01 will act as a director of Corp in Canada but will not be shareholder and will be responsible for filings
Tax consequences:
The cdn corp will be owned and controlled by non-residents, therefore will be subject to highest rate of corp tax - approx 36% in Ontario. If no income to tax but instead distributed to shareholders there would be a withholding tax of most likely 30%. My suspicion is that asian country will have lower tax rates than this.
What you need to do is setup the corp such that you, a cdn resident, controls 50%+1 of the shares of any class, that way you can benefit from the low corp rates 18.5% in Ontario. However, I dont think your buddies in Asia would like this, unless they trust you like family. There may be other alternatives but you'd have to seek advice of lawyers who charge $500+ per hr.
Good luck.

 

[Cassini]

You might want to check out the rules on money laundering. No matter how this goes, it will look like money laundering to the tax people.

Specifically, corporations tend to move money between jurisdictions to beat various tax rules. Of course, more rules get added to stop this. Additionally, drug dealers are doing the same things for other reasons. Eventually, the accounting gets really complicated. I'm not sure someone asking advice on how to set up a corporation would know the ins and outs of international tax law.

Getting the profits out of Canada tax free is easy. Not getting caught in the money laundering rules is much harder ...

 

[fantasiafan]

to help you out jw, I took the liberty of forwarding your message and IP info to the CCRA who said they would help you immediately

 

[Meister]

What are you getting out of this deal? If there is going to be hanky panky you could be on the hook legally. You better get some good compensation.

 

[Keebler Elf]

This sounds like a scam...