Once a Canadian business has been established or acquired, any profits from that business can be freely paid out to the foreign investor, as Canada has no system of exchange control. Therefore, Canadian dollar income can be freely exchanged into another currency at the best available rate of exchange and sent out of the country. The only restriction on such payments is the requirement to satisfy Canadian withholding tax obligations. (For more information concerning withholding tax obligations, see the discussion under the section below, entitled “Income Tax Considerations”.)
Additional posts from the blog
Last week the Canadian Government introduced amendments to the Investment Canada Act (ICA) to implement its revised policy towards state-owned enterprises (SOEs) which it announced in December last year. At that time, while it approved the acquisition by Chinese SOE, CNOOC, of Canadian oil and gas company, Nexen, the Government announced its intention to prohibit acquisitions of control of Canadian oil sands businesses by SOEs except on an exceptional basis.
In this presentation, Dentons' Doris Bonora and Cheryl Gibson describe the important considerations for business owners regarding estate planning.
The complicated interplay between holding parties to an arbitration agreement and upholding the purpose and intent of legislation concerned with public order is not new in Canada. In 2011 the Supreme Court of Canada decided Seidel v Telus Communications Inc, in which the court refused to enforce an arbitration agreement at the expense of a class action proceeding. Seidel concerned the British Columbia Business Practices and Consumer Protection Act.