The best type of business for US entrepreneurs for tax purposes in Canada is a limited partnership.
One of the key advantages of setting up a limited partnership in Canada for US entrepreneurs is pass-through taxation, meaning the partnership itself isn’t subject to Canadian corporate income tax. Instead, profits and losses flow directly to individual partners, who report them on their personal tax returns.
This structure helps avoid double taxation while allowing US-based entrepreneurs to benefit from more favorable cross-border tax treatments.
