Foreign Direct Investment in Canada
FDI in Figures
Since the economic recovery, foreign direct investment (FDI) in Canada, which during the previous decade had grown by 9% per year on average, has been slow and more concentrated. This trend should continue in 2011.
Canada’s main attractions are its highly-skilled population, its abundant natural resources, its commercial dynamism and fiscal incentives, its competitiveness in key sectors (communications, transit, financial services), as well as its geographic proximity to the world’s number one economy, the United States.
Country Comparison For the Protection of Investors
|Index of Transaction Transparency*||8.0||6.0||7.0||5.0|
|Index of Manager’s Responsibility**||9.0||5.2||9.0||5.0|
|Index of Shareholders’ Power***||8.0||6.8||9.0||5.0|
|Index of Investor Protection****||8.3||6.0||8.3||5.0|
Source: Doing Business
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2007||2008||2009|
|FDI Inward Flow (million USD)||108,414||55,270||18,657|
|FDI Stock (million USD)||516,283||441,638||524,938|
|Performance Index*, Ranking on 141 Economies||40||73||100|
|Potential Index**, Ranking on 141 Economies||12||11||-|
|Number of Greenfield Investments***||168||215||254|
|FDI Inwards (in % of GFCF****)||33.5||16.2||21.7|
|FDI Stock (in % of GDP)||36.3||29.5||39.3|
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
Why You Should Choose to Invest in Canada
- Strong Points
- Canada's main advantages are a qualified workforce and an easy access to raw materials. It is one of the most dynamic economies in the world, with a market of 30 million consumers and sophisticated infrastructures, as well as a very modern transportation network.
- Weak Points
- Canada's weak points are its excessive dependance to the United States and a currently damaged financial system.
- Government Measures to Motivate or Restrict FDI
- Canada applies a high taxation rate on companies. It is currently the country that applies the lowest payroll taxes in the G7 countries.
Companies establishing their headquarters in Canada should get tax benefits (higher than those offered in the United States) up to 2010 . In addition, the government announced a euro 24.6 billion two-year recovery plan.
- Bilateral Investment Conventions Signed By Canada
- On 1 June 2007, Canada had signed bilateral agreements with more than 25 countries. See the
list of the countries.
To see the conventions, click here.
Canada is a signatory to agreements and arrangements with more than 70 bilateral partners in the aviation sector.
It has concluded FTAs with the United States and Mexico (NAFTA), as well as with Chile, Israel, Costa Rica in July 2007 and Panama in August 2009 (elimination of tariffs in sectors of industry, agriculture, forestry and fishing).
Canada, Peru and the countries of the European Free Trade Association (EFTA: Iceland, Liechtenstein, Norway and Switzerland) signed a free trade agreement on 26 January 2008 at Davos, in Switzerland.
Procedures Relative to Foreign Investment
- Freedom of Establishment
- Yes, on condition that the company follows the directives required by the Canadian government.
Foreign investment is subject to the Investment Canada Act.
- Acquisition of Holdings
- Possible on condition of observing the in-depth procedure of examination of the project.
- Obligation to Declare
- The foreign investment promotion bureau in the country gives information about the necessary authorizations for setting up a company. Canada is in the first rank of OECD countries as regards the low number of procedures (2) and the shortest time limit (3 days) imposed for setting up an industrial or commercial company. A foreign company can set up in Canada by creating a distinct legal entity or a subsidiary under Canadian federal law or a provincial law governing companies. A subsidiary is treated in the same way as a branch office. It must have a commercial permit or be registered with the province where it does business.
- Competent Organization For the Declaration
Citizenship and immigration Canada - Guide 4000
- Requests For Specific Authorizations
- There are particular restrictions in the communications and transport sectors. All requests must be sent to the
Ministry of Foreign Affairs.
For further information, see investment laws in Canada.
- Investment Aid Agency
Business Development Bank of Canada
Foreign Affairs and International Trade Canada
Invest in Canada
- Tenders, Projects and Public Procurement
Merx, Canadian Public Tenders
Tenders Info, Tenders in Canada
PODS Providers, Procurement Opportunities in Canada
DgMarket, Tenders Worldwide
- Other Useful Resources
Investissement Québec (Investment Quebec)
Ontario Immigration - doing business
Manitoba Trade and Investment
Investment in the community support programs
Invest in Alberta
Invest in British Columbia
Invest in New Brunswick
Invest in Nova Scotia
Invest in Prince Edward Island
Invest in Newfoundland and Labrador
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