Opening a business bank account in Canada

TransferWise
04.09.19
6 minute read

Canadian exports hit record highs in May 2019, and are on an upward trend according to Statistics Canada. Year on year, export values were up over 8%, with a range of goods including motor vehicles and light trucks seeing significant export uplift.

No matter what sector you work in, Canada is an attractive place to do business. If you export from Canada to Australia, or do a lot of business with customers based in North America, you may choose to open a local business bank account there to make managing your money easier. This guide covers the details you need to know about business banking in Canada including:

  • Opening an account as a foreigner, non-resident or owner of a foreign registered business
  • The banks to look at when doing your research
  • Common account fees you should consider

While finding a way to manage your money across borders makes smart business sense, getting an account with a Canadian bank may not be your best option. We’ll also cover an alternative way to open a multi-currency account and make and receive low cost international business transfers - the TransferWise borderless account for business. More on how TransferWise can help you spend less on bank fees, and have more to grow your company, in a moment.

When you’re researching Canadian business bank accounts, you’ll see accounts may focus on the features which are attractive to organisations of different types and sizes. The most common business types in Canada are as follows:

  • Sole proprietor
  • Partnership
  • Corporation
  • Cooperative

Make sure you’re researching accounts which fit the needs of your company based on the type of corporate entity you have.

Can I open a corporate bank account in Canada with a foreign corporate entity?

There’s no legal reason why you can’t open a business bank account in Canada with a foreign corporate entity. You don’t even need to be a resident to open an account.

However, there may be practical barriers to getting your business account up and running in Canada. For example, many banks ask all business owners to attend a meeting before they will approve an account application. If you’re not based in Canada this could prove tricky. These requirements are based on local law which requires banks to check the ID of all customers to prevent fraud and money laundering. In many cases banks prefer to do this face to face.

One way around this may be to work with your local bank in Australia. If they have branches in Canada, or work with a partner bank there, you may find they’re prepared to be more flexible about their application processes, because they will have already vetted your suitability for an account once.

An alternative: the borderless account for business from TransferWise

You want to get a Canadian bank account to make life easier for your business, and to save yourself time. However, if you’re going to have to travel to Canada to get an account up and running there, this might not prove feasible.

Luckily there are other ways around this dilemma. Instead of opening an account with a Canadian bank, why not get a multi-currency digital account like the TransferWise borderless account for business.

Your borderless account can be opened entirely online, with all ID checks and verification completed remotely. You’ll then be able to hold over 40 currencies in your account, including both Canadian and Australian dollars. With TransferWise you can send and receive money globally using the mid-market exchange rate that you see on Google, with no markup or hidden charges. You just pay a low transparent fee per transaction.

Borderless accounts also come with a wide range of other business friendly perks such as an open API, batch payments, and integration with Xero to save you even more time and money.

What's the process to open a corporate account? How long does it usually take?

It’s common to need to visit the bank you’ve chosen for a meeting and to present your documents, before you can open a business bank account in Canada. Once you’ve held this meeting, it should not take long to get your account up and running.

Before you attend your meeting with your chosen bank, you’ll need to check the documents required to open your account. Typical requirements vary according to the company type you own - you can expect to need:

  • Full personal details, and details of your business
  • Incorporation documents based on the company type
  • 2 pieces of primary ID such as a passport or residence card, or one piece of primary ID and one piece of secondary ID such as a credit card in your name

Any business owners and signatories will need to provide this information and documentation, and may also need to attend a bank meeting in person.

Can I open a business bank account from abroad or online? Is there a way to avoid travelling to Canada for a meeting?

Canada’s major banks ask you to visit a branch to open a business account.¹ There are agencies which can assist with opening a local bank account, although even they may not be able to find any way round this mandatory meeting. If you choose to use an agent make sure you know what you’re paying for before you sign up.

If you want to open a business account to make it easier to manage your money in Canada, without the inconvenience of having to travel there for a meeting, you may prefer to choose an alternative like a TransferWise borderless account for business.

Which bank should I choose?

When you’re choosing a bank account in Canada you’ll want to do some research to find the right one for your needs. Starting out with some of the country’s biggest banks makes sense as they tend to have the broadest range of products available. Some of the biggest retail banks in Canada include:

  • RBC
  • TD Bank
  • Scotiabank
  • HSBC

RBC:²

  • Use the handy tool to see which accounts might suit your needs, available on the RBC website
  • Basic business account from $5/month operating fee
  • Online banking options and tailored advice and support for your business

TD Bank:³

  • Canada’s largest bank with 1,150 branches in Canada alone, and more in the US
  • Business banking solutions based on the size and type of your company, including not for profit and charity organisations
  • Accounts in Canadian and US dollars
  • Branches have longer opening hours including Sundays, if you’re a fan of face to face banking

Scotiabank:⁴

  • Described as Canada’s most international bank, with branches throughout the country and also internationally
  • Several account options including a basic business account for $9.95/month, or free with a minimum balance of $6,000
  • Range of resources for company owners, including advice and business support

HSBC:⁵

  • Global bank with many branches and offices around the world
  • Full range of banking solutions for startups to large corporations
  • High interest business savings accounts available
  • Special offers including no fee accounts, from time to time and for new customers

Banking fees

Whichever account you choose for your business, you’ll need to pay careful attention to the terms and conditions, including the fees. The fee structure might not look like the one used by your home bank - and you may also use your Canadian bank account quite differently to your regular business bank account in Australia.

For example if you need to repatriate funds from Canada, you may make many cross border payments to get the money back to your home account. International transfers can prove expensive and take a fairly long time with a regular bank. You’ll want to check the exchange rates on offer as well as the admin fees, as it’s common for banks to add a markup to the rate offered to customers. This can mean your transfer costs more than you expect based on the rates you see online.

To keep your costs down you may be better off using a currency specialist like TransferWise for your international payments. All transfers use the rate you’ll find with a Google search, and there’s just a transparent upfront fee to pay to cover the costs. This can be cheaper - and often quicker and more convenient - than using a regular bank for your cross border payments.

To help your business grow you need to right partners on side - including an account provider which helps you manage your money around the world. Do some research before deciding to open a bank account for your business in Canada. You may find there are more simpler ways to access the same support, such as grabbing yourself a TransferWise borderless account for business.

Sources:

  1. https://www.scotiabank.com/ca/en/small-business/business-banking/business-bank-accounts/how-to-open-a-bank-account.html

  2. https://www.rbcroyalbank.com/business/accounts/index.html

  3. https://www.td.com/ca/en/business-banking/

  4. https://www.scotiabank.com/ca/en/small-business/business-banking/business-bank-accounts/basic-business-account.html

  5. https://www.hsbc.ca/small-business-banking-solutions/

Sources accurate as of 23 July 2019


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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