Overview: Starting a Business in Quebec in 2024-25
If you are looking to set up a business in Canada, then one of the provinces you can choose to establish your business is Quebec. As the 2nd biggest province of the nation, Quebec offers entrepreneurs numerous opportunities to grow their businesses.
Starting a business is a complex process that takes time and effort. One of the first steps, when you have a business idea, is to register your company with the Registraire des Entreprises du Quebec (REQ).
Here, we will briefly cover the steps to start a business in Quebec, to assist you in successfully setting up a business in Quebec, Canada.
How to start a business in Quebec in 5 Steps?
Here are the steps you must follow to start a business in Quebec:
1. Choose the kind of business you wish to launch
Before you start a business in Quebec and register your business, you need to determine the most appropriate business plan. This business plan will determine how your business can operate within Quebec.
Corporation
You can choose to start a corporation in Quebec. This structure limits shareholders’ liability and allows the company to exist independently of its owners. Incorporation offers additional flexibility, such as the ability to issue shares for capital raising purposes and potential tax advantages. If you are thinking about founding a corporation, you may find detailed information regarding the incorporation procedure in Quebec.
Sole Proprietorship
A sole proprietorship in Quebec is owned and operated by a single person. Because a sole proprietorship lacks a separate legal personality from the owner, the owner is individually liable for all earnings and losses. Many self-employed individuals choose this form of business.
Other Business Structures
There are less common business structures available for entrepreneurs running their own enterprises. These include co-operatives, joint ventures, associations, and non-profit organizations.
2. Select a Federal or Provincial Incorporation
If you decide to incorporate your firm, it’s crucial to decide whether you’ll operate primarily in Quebec or in other parts of Canada. Federally incorporated businesses can have their head offices anywhere in Canada and will enjoy name protection across the country, however, they will often need an attorney in Quebec if they operate in the province without any physical locations.
Businesses that are provincially incorporated are given name protection inside the province and are required to establish their headquarters in Quebec. Despite this, there are a number of important advantages to incorporating provincially in Quebec, including a quicker turnaround time, fewer shareholder payment restrictions, and less stringent board of director citizenship requirements.
Read More: Federal vs Provincial Incorporation
3. Plan your business
You’ll increase your chances of succeeding as an entrepreneur by developing a well-thought-out business plan. It establishes a framework that you can constantly use as a guide when making choices about your company.
Your business strategy ought to contain:
- Financial forecasts for your company
- An advertising plan
- Operational information
- Any further information you’d want to share with investors
4. Choose a name for your company
You must choose a suitable and legal business name for your firm before you register it. Having a unique company name might help set your company apart from the competition in Quebec.
Check that your company name is distinct from the names of any other legally operating company in Quebec. To check if your preferred company name has already been established or not, you can run a name search in the Quebec business registry system.
Read More: Business License in Canada
5. Register your business
After choosing the ideal business name, the next step is to register your company with the Registraire des Entreprises du Quebec. The REQ is the organization responsible for administering all businesses established in Quebec as well as conducting company incorporations in that province.
If you want to open a business in Quebec, you have to submit your incorporation documents. If your business has previously been established under the laws of another country, you should submit registration documents.
Following approval of your registration application, your organization will be provided with a business enterprise number, which serves as a special identifying number.
Business Entitites for Set up a business in Quebec
The list of business entities required to register in Quebec are as follows:
- Federal Incorporation: To incorporate under the Canada Business Corporations Act, you must file articles of incorporation, an initial declaration, and register with the Registraire du Quebec.
- Sole Proprietorship: Sole proprietorships that operate under a different name than the initial and last name used by the sole owner, or those who operate in a tobacco retail business must sign up. To register your sole proprietorship you need to submit a statement of registration to the Demarrer the service for enterprises.
- Provincial Incorporation: In order to incorporate under the Quebec Business Corporations Act, you must submit your constitution’s articles and the initial declaration, as well as a declaration relative to the name and an initial list of directors of the Corporation.
Benefits of Starting a Business in Quebec
Some of the advantages of setting up a business in Quebec are:
- As reported by Statistics Canada, about 86% of Quebec’s population habitually speaks French. It is the province’s official business language under the French Language Charter.
- Grants and subsidies are available for enterprises, notably in the arts and cultural sector, from the government and Revenu Quebec.
- The industries of the province are varied. The province offers chances in a variety of industries, including agri-food, mining, forestry, information and communication technology (ICT), multimedia and gaming, and aviation.
- Quebec had the fourth-highest GDP per capita among Canada’s provinces in 2021.
- The major contributor to the region’s overall GDP is manufacturing. Highly specialized and innovative small- and medium-sized businesses (SMBs) account for the majority of manufacturing firms in the region.
Cost required for starting a business in Quebec
The cost of company registration in Quebec will vary depending on the business form you choose. The basic registration fees for Quebec’s most common sorts of businesses are listed below.
Sole proprietorship: If you’re registering your firm as a sole proprietorship in Quebec, the declaration of registration will cost you $38 CAD.
Provincial incorporation: The fee for incorporating provincially in Quebec under the Business Corporations Act is $367 CAD.
Federal Incorporation: Federal incorporation in Quebec begins at $200 CAD, with a $35 CAD fee for a NUANS name search report if it is filed by yourself.
Taxation consequences for incorporating a business in Quebec
The Corporate Income Tax in Quebec is 26.5% in 2024. This is the combined tax of Federal and Provincial Tax. The Federal Tax in Quebec is 15%. The Provincial Tax is 11.5%.
The Quebec Sales Tax: In Quebec, The QST is 9.975%.
Capital Tax: The Capital Tax in Quebec is 0.473%.
Payroll Tax: The Payroll Tax in Quebec is 5.3%.
As a small business owner, you will be responsible for bookkeeping to ensure that your company’s taxes are in order. Since there is no harmonized sales tax in Quebec, company owners must register for both the QST and the GST. You may accomplish this by using Revenu Quebec.
If your overall income is under $30,000 in a single calendar year or over four successive calendar quarters, you are exempt from this rule. In accordance with this exclusion, some industries are not subject to GST, QST, or the tax on gasoline, cigarettes, alcohol, tires, or vehicles. On the Revenu Quebec website, you may find additional information regarding registering for GST and QST.
Depending on your company’s activities, you may also need to register for other CRA accounts and Revenu Quebec programs.
Conclusion
Starting a business in Quebec can be a lucrative venture because of the benefits and possibilities, In addition to a qualified workforce and strategic location in Canada, the region has a growing economy. Quebec also offers a variety of incentives and assistance programs for company owners, making it a desirable location for anyone wishing to establish a firm.
With OnDemand International, you can achieve your goal of starting a business in Quebec. It’s critical that you understand the legal criteria for running your particular form of business in Quebec because they vary depending on your industry, type of business structure, and whether you want to incorporate on a provincial or federal level.
FAQ’s
Any company conducting business in the province must get a Quebec business number. Fortunately, obtaining an NEQ number in Quebec is simple. Upon registration, the REQ immediately assigns an NEQ. The NEQ number will be automatically given at the moment of the constitution for organizations that do not have to submit a declaration of registration (such as companies that are registered provincially).
If all is well and there are no issues with the selected business name, the registration process for either a sole proprietorship or incorporation can be completed in as little as one business day, depending on your chosen business structure.
You’ll have to deal with both the provincial QST and the federal GST in Quebec. If your company conducts business in other provinces, you might also need to register for the Harmonized Sales Tax (HST).
