Canada is generally considered to be a country with a relatively strict tax system with no characteristics of an offshore or other tax-exempt structure. Typically this is the case – most Canadian legal entities are required to pay tax on all of their domestic and foreign income. Because of this, Canada is perceived by both government agencies and entrepreneurs as a country with a standard tax system and any legal entity residing on its territory as a reputable and trustworthy vehicle.

Favorable taxation on the territory of Canada
There is a scenario where Canadian legislation provides for the ability to register a Canadian legal entity and operate within it with a zero tax rate. This is possible via a legal form of company called a limited partnership. LP is a partnership with two or more partners. Each LP must have at least two partners: General Partner and Limited Partner. Both types of partners can be either a private individual or a legal entity.

A Canadian LP with foreign partners and no business in Canada is not taxable in Canada. This is possible due to the fact that Canadian tax legislation does not treat an LP as a separate taxable entity. Instead, taxes should be paid by the partners in their country of residence. Because LP is not considered a resident of Canada for tax purposes, this entity is not entitled to benefit from double taxation treaties between Canada and its partner countries.

Possible Applications of a Canadian LP Holding Structure
There are several popular uses for Canadian LP:

A regular company for business purposes in Canada, EU, US or other regulated jurisdiction;
An agent working under a commercial agency agreement;
IT support and software development services or other online based business, such as marketing, web shop, auction or website development services;
A holding company due to a beneficial tax exemption for LP.
In addition to the highly beneficial LP tax environment, there are numerous other benefits to consider before deciding if the Canadian LP is the right choice for your business:

Be a respected Canadian company;
No residency requirements for partners;
No requirements to appoint a company secretary;
No obligation to file annual accounts;
Opportunity to form a one-man limited partnership where one person is both general partner and limited partner;
No minimum authorized capital requirements.

Readymade limited partnership (LP) acquisition process
If you are not familiar with Canadian company set-up requirements, or simply have no time to incorporate a new LP, you are able to acquire a ready-made, or shelf company. A ready-made company is a legal entity that has been registered some time ago, but no operational activity is taking place in this company, therefore, it is “sitting on the shelf”. When acquiring a shelf company, you are able to acquire a business with reputable age, which inspires more confidence among suppliers, partners, clients as well as financial institutions.

Shelf companies in Canada generally are sold with the Articles of Incorporation, Certificate of Incorporation, Revenue Canada Tax Business ID number, Corporate Organizational Minutes as well as Resolutions, Corporate Minute Book, by-laws and finally – customized stock certificate. The ready-made company is organized according to the client’s wishes with shareholders, directors and officers indicated by him or her. In case you would like to change the company name, this can be easily done upon acquisition of the shelf company. There are three types of ready-made companies in Canada: Federal, BC and Ontario shelf companies. Each of them is different in terms of partner suitability and other requirements. For example, if you are a non-resident, you are allowed to purchase only a BC shelf company.

Advantages of having a Canadian LP structure
There are numerous benefits of acquiring a ready-made company. First of all, you are able to acquire an already established company without wasting your time on incorporation documentation and procedures. This also means that you are able to start trading as soon as the acquisition process is complete. Additionally, each company becomes more credible when it ages. You will be able to use this benefit when negotiating with partners, attracting new clients, as well as simply opening a bank account or acquiring a credit.

How to purchase readymade Canadian LP?
The easiest way to acquire a ready-made company is through a company that specialises in such services. Typically, these companies acquire inactive companies to keep them “on the shelf” until a potential buyer decides to acquire one of them. Additionally, most of these service providers also incorporate new companies and leave them for some period of time. You are able to acquire a ready-made company in four easy and straightforward steps:

Go online and shop for the most suitable service provider depending on their service package, fees, possible client reviews, credibility and other aspects.
Fill an application form and submit it along with all the necessary documents and other information.
Pay all the service and government fees.
Receive already complete company incorporation documents. From this moment, you are able to start trading.
Generally, prices for ready-made companies differ among service providers and become higher with the age of the company. This is due to the fact that older companies take more time of maintenance and they become more credible over the years. Prices are typically calculated per month.