Startup Law: Does moving a company from the US to Canada constitute tax complications?

To preface my answer, I am not aware of Canadian tax law, so I do not know the tax implications there, but I am sure there will be Canadian tax implications.  To be sure, it looks like the principle place of business will be in Canada, which more than likely subjects your company to Canadian tax.  If you still have a Delaware as the incorporation state, that means you have some nexus with the US to keep you subject to US (and Delaware) tax. (This also could be true if business is conducted within the US, even if not incorporated in US anymore.) The amount subject to the tax between both countries is determined on the facts, and you should consult a professional to see what or how much tax you will be subject to in each country.  Also, I am not sure about the assets, if any, you are transferring to Canada and the tax implications upon the assets "transfer".  Again, I would need more facts re these issues. We re to terminating the US company, this may get tricky because the liquidating of the interests involved.  I would need more facts to accurately determine the tax implications here.  Hope this helps.

From a Canadian tax perspective there may be a whole host of issues that a non-Canadian corporation must be cognizant of before “carrying on business in Canada”.  If the US corporation sets up an office in Canada, this would create a permanent establishment for the company in Canada, creating an obligation to pay Canadian income taxes, as well as US income taxes.  Depending on how the US corporation is set up (i.e. an LLC, S-corp, C-corp) there could be potential foreign tax credit mistiming issues creating a significantly high tax liability for US tax purposes.  In addition, there could be an additional branch tax of up to 25% in Canada (subject to a potential reduction in the tax rate under the Canada-US Tax Treaty).  Finally, if the company’s products/services are subject to Canada’s Goods & Services Tax (GST)/Harmonized Sales Tax (HST), the non-resident corporation would likely have to post a security deposit with the Canada Revenue Agency in an amount equal to 50% of its net GST/HST expected liability over the next 12 months (regardless, the minimum security deposit requested by the Canada Revenue Agency would be $5,000).   Most of these issues are avoided by incorporating a Canadian company.  The company could be a subsidiary of the US corporation, so long as your US advisors see no issue with that structure.  One thing to keep in mind when incorporating a corporation in Canada is that most provinces require that there be at least one Canadian resident director or a requirement that the majority of directors are Canadian resident individuals.  (New Brunswick does not have this requirement.)    We are a Toronto, Ontario, Canada based accounting firm and I would be pleased to assist you with any tax and/or accounting needs as you make you move to Canada.