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Canada vs United States

Side-by-side comparison of Canada and the United States for founders evaluating a North American common-law base.

Side-by-side

TaxationCanadaUnited States
Corporate tax26.5%21%
VAT5%0%
Dividend tax25%30%
FormationCanadaUnited States
Difficulty (1–5)22
Cost300 CAD500 USD
Time3 days2 days
Banking & PaymentsCanadaUnited States
Banking difficulty (1–5)45
StripeYesYes
PayPalYesYes
WiseYesYes
OperationsCanadaUnited States
Accounting difficulty (1–5)34
Payroll difficulty (1–5)34
Compliance difficulty (1–5)34
Market accessCanadaUnited States
EU memberNoNo
EEA memberNoNo
CurrencyCADUSD

When Canada wins

  • You qualify as a Canadian-controlled private corporation (CCPC) for the 9% small-business rate on the first CAD 500,000
  • You can leverage SR&ED federal investment tax credits on R&D wages and contractor expenses
  • You want to avoid Delaware-style state-level franchise tax and US federal compliance load

When United States wins

  • You're raising US-institutional venture capital and need a Delaware C-corporation
  • Your primary customer base, sales motion, and exit market are US-centric
  • You want a single federal CIT rate (21%) with no provincial layer on top

Related

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