Starting a business in Canada is operationally straightforward. The country has clear, accessible registration systems, no minimum capital requirements for most business structures, and digital-first government services that let you complete most setup steps from your phone or laptop. Here is the complete guide for 2026.
Choose Your Business Structure
For most new freelancers and self-employed individuals in Canada, the choice is between sole proprietorship and incorporation.
Sole Proprietorship
You and your business are legally one entity. Your business income is your personal income. No separate legal entity, no corporate tax return. Setup cost: $0–$70 depending on whether you register a trade name. Recommended for most people starting out, with net income under $80,000–$100,000 annually.
Corporation
A separate legal entity that you own through shares. Provides limited liability and access to lower corporate tax rates on retained earnings (~12.2% in Ontario vs personal marginal rates up to 53%). Government fee: $200 (federal) to $380 (BC). Adds $1,500–$3,000+/year in accounting overhead. Recommended when income consistently exceeds $80,000–$100,000 and you can retain some earnings inside the corporation.
Register Your Business
Provincial Business Name Registration
Required only if you use a name other than your legal name. Provincial registries handle this:
- Ontario: ontario.ca/businessregistry — $60, same-day
- BC: bcregistry.gov.bc.ca — $70 ($30 name approval + $40 registration), 2–5 days
- Alberta: through an authorized registry agent — $60–$90, same-day to 2 days
- Quebec: registre.quebec.ca — ~$38, 3–5 days
CRA Business Number
Free registration at canada.ca’s Business Registration Online (BRO) portal. Required when you need a CRA program account (GST/HST, payroll, corporate tax). Registration is online only since November 2025.
Open a Business Bank Account
Separate your personal and business finances before your first invoice. No-fee options accessible to newcomers and established residents alike:
- EQ Bank Business: no monthly fee, unlimited transactions, free e-Transfer
- Wealthsimple Business: no monthly fee, unlimited e-Transfer
- BMO eBusiness: $0/month, 25 free electronic transactions
For US or international clients: add Wise Business ($55 one-time) for multi-currency receiving at mid-market rates.
Understand Your Tax Obligations
Income Tax
File a T1 personal return with Schedule T2125 (Statement of Business Activities) annually by June 15. Pay any balance owing by April 30. Set aside 25–30% of every client payment for income tax and CPP.
CPP (Canada Pension Plan)
Self-employed pay 11.9% on net income between $3,500 and $74,600 (2026 YMPE). Maximum: $8,460.90. The employer-equivalent half is tax-deductible.
GST/HST
Register when taxable revenues exceed $30,000 in four consecutive calendar quarters. Collect 5–15% depending on the client’s province. Remit net of ITCs. File annually (most new businesses) with payment due April 30.
Set Up Your Tools
- Accounting: Wave (free), FreshBooks (~$25/month), or QuickBooks Online (~$28/month)
- Tax filing: Wealthsimple Tax (free) or TurboTax Self-Employed (~$60–$80)
- Payments: Interac Autodeposit for Canadian clients; Wise Business for US/international; Stripe for credit card
Frequently Asked Questions
How long does it take to start a business in Canada?
You can be operational in 1–2 weeks: SIN (same-day), business bank account (1–3 days online), accounting software setup (30 minutes), Wave invoicing (30 minutes). Provincial business name registration adds 1 day (Ontario) to 5 days (BC, Quebec). The main variable is how quickly banking opens.
Do I need a lawyer or accountant to start?
Not for the initial setup — most sole proprietors start without professional fees. A CPA becomes valuable when evaluating incorporation (usually at $80,000+ in net income), for your first-year newcomer tax return (if your situation is complex), or for any CRA correspondence. A lawyer adds value for incorporation with multiple founders, shareholder agreements, or client contracts above $50,000.
What is the biggest mistake new business owners make in Canada?
Not setting aside enough for taxes. Employees receive net pay automatically. New self-employed Canadians receive 100% of each invoice and underestimate how large the April 30 tax + CPP bill will be. The fix: open a dedicated tax savings account on day one and transfer 25–30% of every payment to it immediately upon receipt.