What are our options?
1. We can ask them to move to Canada; become an employee and we issue them stock options
2. We create a Delaware corp and make Canadian corp a subsidy
3. We shutdown Canadian corp and just move everything to Delaware corp (using Stripe Atlas?)?
4. We ask our friends on HN for advice (BINGO!!!!)
Non Canadians can own a percentage of Canadian corps. In BC a non-Canadian can own 100% of the company!
The benefits of having a Canadian Controlled Private Corporation (CCPC) are huge. For example not having to file 409a, or not having to worry about filing a 83b election. The Canadian r&d tax Credits are huge and are only available to CCPC’s. As an example, The Canadian Gov will subsidize up to 63% of R&D salaries. You will get the credits back in cash when you file your taxes. You can also apply for NRC grants that will give you hundreds of thousands of dollars for unique projects.
I have used Atlas and started a CCPC. Being Canadian the process seemed much easier in Canada.
But the non-tax incentives available to us companies are amazing as well. Getting a SVB bank account with a US Corp was awesome. The no fee banking for 3 years and a 10,000 MasterCard without a personal guarantee was great.
It really depends on your financial situation.
FYI: You don’t have to move your cofounder to Canada to have him be a founder in Canada.
Hope that helps.
I would talk to Logan Hanson from Advisar everyday he helps CCPCs file for SRED Credits. https://www.linkedin.com/in/loganhanson
I'm totally not up on CAD/USA tax law, but in AUS the issue can be that you can have a capital-gains event if the company ever has a change of control, even if you don't actually get any income.
Honestly, don't ask HN here: pay an accountant.
This might also show up its not 4 choices...
I am not sure what would the tax implications be for us as Canadian citizen to own a Delaware Inc.