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Business in Ontario Just Got Easier!

Updated: Mar 20, 2023

Do you live outside of Canada and are interested in opening a business in Ontario?

Do you live outside of Canada and are interested in expanding your business into Ontario?

Are you currently running a business in Ontario with 25% of your directors being Canadian residents?

Are you seeking a Canadian resident to act as director to open your business in Ontario?

If the answer to any of these questions is “yes”, continue reading!

In the past, it was required that Ontario corporations have 25% of their directors be Canadian but we are here to inform you that this rule has officially changed. This intends for opening and running a business in Ontario to be more manageable!

Effective July 5th, 2021 this new policy was incorporated to modernize the Ontario Business Corporations Act (OBCA) and align it with other provinces.

These modifications will facilitate and improve the process of opening a company in Ontario. Along with eliminating the Canadian-resident requirement for newly incorporated corporations, it eliminates the requirement for existing Ontario corporations. This means that if you have four directors, one of them being Canadian and they need to leave, the process for rehiring will change. Rather than having to find someone new that is a Canadian resident, you can either not hire anyone or hire someone adequate, not needing to be a Canadian resident. The hunt for qualified, Canadian directors is no longer necessary.

These advances have been made under the OBCA, meaning businesses operating in Ontario will no longer have this condition, but how does this influence federally incorporated businesses?

Federally incorporated corporations in Canada are under a separate act, the Canada Business Corporations Act (CBCA). This means that besides changes made in the OBCA, the CBCA require and will continue to require 25% of their directors to be Canadian. On the other hand, if you incorporate your business in Ontario, and wish to operate in other jurisdictions while remaining subject to the OBCA, that is a possibility! You must contact the other jurisdiction to acquire a license to operate there while remaining an Ontario-based corporation subject to Ontario legislation.

These changes will have an extremely positive effect. In the past, this requirement may have created obstacles when sourcing Canadian-resident directors with relevant skills and experience. These obstacles are now removed; as an entrepreneur, you can hire who you wish. This update will facilitate foreign investment and reduce financial and administrative burdens for businesses in Ontario. It is officially time to open or incorporate your business in Ontario!

Contact Us

This material is for informational purposes only and should not be relied upon as legal advice. To book a consultation with the Buzaker Law Firm’s team member regarding opening, expanding or running your business in Ontario, email us at or call (905) 370-0484

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