Start an Automotive business in Canada


    Note: This form is not for job seekers.

    Table of Contents

    This comprehensive guide equips you with all the necessary information to embark on your journey of starting an automotive business in Canada.

    With its flourishing market, proficient workforce, and governmental backing, Canada’s dynamic automotive sector entices foreign entrepreneurs and investors.

    Whether your aspirations lie in establishing a car dealership, a repair shop, or exploring the realm of electric vehicles, venturing into the Canadian automotive industry presents thrilling prospects for expansion and success.

    Why register an Automotive Business in Canada?

    • A Flourishing Industry: Canada’s automotive industry holds a prominent position globally, ranking among the top 12 producers of light vehicles. With a significant contribution of $12.5 billion to the GDP, it directly employs over 117,200 individuals and supports numerous others through aftermarket and dealership networks.
    • Skilled Workforce: Canada boasts a highly skilled and experienced workforce in the automotive sector. Renowned educational institutions like Georgian College offer specialized programs in automotive business and management, ensuring a readily available talent pool for your company.
    • Stable Economy: Canada’s stable political climate and robust economy create a secure environment for conducting business. Furthermore, free trade agreements with major economies like the United States and the European Union facilitate international trade and expansion.
    • Government Backing: The Canadian government actively encourages foreign investment in the automotive industry. Programs such as the Automotive Innovation Fund and the Strategic Innovation Fund provide financial assistance and support for research and development.
    • Thriving Electric Vehicle Market: Canada stands at the forefront of the electric vehicle (EV) revolution, with ambitious government targets for EV adoption. This presents a lucrative opportunity for businesses specializing in EV sales, servicing, and charging infrastructure.

    How to Start an Automotive Business in Canada?

    • Select Your Business Model: Determine the nature of your business, whether it be a car dealership, repair shop, parts supplier, or an EV-focused venture. Conduct thorough market research to identify your specific target audience.
    • Create a Business Plan: Construct a detailed business plan that encompasses your financial forecasts, marketing tactics, operational framework, and risk management strategies.
    • Register Your Business: Choose an appropriate business structure, such as a sole proprietorship, partnership, or corporation, and complete the necessary registration process with the relevant provincial authorities.
    • Obtain Licenses and Permits: Acquire the required licenses and permits for your particular business operations. These may include a business license, car dealership license, and environmental permits, among others.
    • Open a Bank Account: You need to open a corporate bank account to manage your financial activities.
    • Secure Funding: Develop a comprehensive financial plan and explore various funding options, including personal savings, bank loans, government grants, and potential angel investors.
    • Find an Ideal Location: Select a strategic location that offers high visibility and easy accessibility for your target audience. Ensure that the chosen location adheres to zoning regulations and environmental standards.
    • Build Your Team: Recruit skilled and experienced individuals who possess the necessary qualifications to effectively manage your business operations.
    • Market Your Business: Devise a comprehensive marketing strategy to effectively reach your target audience and establish brand recognition. Utilize both online and offline channels, such as social media, search engine optimization, and traditional advertising methods.

    Documents required to register an automotive business in Canada

    The following documents are required to incorporate an automotive business in Canada are as follows:

    • Business registration documents
    • Business License
    • Insurance policies
    • Car dealership license (if applicable)
    • Environmental permits
    • Proof of funding
    • Employment contracts
    • Leases or property ownership documents

    Costs required to Start a business for Selling Motor Vehicles

    • Fees for business registration, licenses, and permits
    • Expenses related to legal and accounting services
    • Premiums paid for insurance coverage
    • Monthly payments for rent or mortgage
    • Costs associated with purchasing and maintaining inventory
    • Expenditures for acquiring equipment and technology
    • Expenses incurred for marketing and advertising purposes.

    Benefits of setting up an Automotive Business in Canada

    The list of benefits of setting up an Automotive Business in Canada:

    • Accessing a vast and expanding market
    • Benefiting from a stable economic and political climate
    • Employing a highly proficient and educated workforce
    • Receiving support and incentives from the government
    • Having the chance to engage in the thriving electric vehicle industry.


    Starting an automotive business in Canada is an attractive opportunity for foreign entrepreneurs and investors due to its strong economy, skilled workforce, and supportive government policies. By carefully planning, securing funding, and implementing a well-defined strategy, you can take advantage of the immense potential in this thriving industry and achieve your entrepreneurial objectives.

    At OnDemand International, we specialize in guiding you through the complexities of starting an automotive business in Canada. Our comprehensive range of services includes business incorporation, legal and regulatory compliance, accounting and tax assistance, as well as marketing and business development support.

    To ensure a hassle-free business incorporation process and embark on your path to success in the Canadian automotive industry, contact OnDemand International today.