How to open a business bank account in Canada
Canadian banks are known for their reliability and stability. Knowing how to open a business bank account in Canada can help you leverage those banking benefits.
In this post, we’ll answer all the pertinent questions related to opening a business bank account in Canada so that your organization can reap the benefits of one of the safest banking systems in the world.
Do I need to be Canadian to open a business bank account in Canada?
There are no residency requirements or citizenship requirements to open a business bank account in Canada. In fact, you can open your account in Canada even if you don’t plan to immigrate there.
Do I need to be in Canada to open a business bank account?
Some banks in Canada do require you to be there in-person when opening a business bank account while others don’t impose such requirements.
In case you choose to open your account without visiting, we recommend that you call the bank you wish to open your account in beforehand. This way, you’ll be informed of any account restrictions and requirements.
There are a number of international banks that operate in Canada. So, if there is a local branch near you, they may help you open a business bank account in your country of residence and transfer it to Canada. However, you may have to pay higher charges for holding the business bank account internationally and make a higher minimum deposit to open your account.
What documents will I need to open a business bank account in Canada?
If your company fulfills the qualifications given in the Access to Basic Banking Services Regulations under the Bank Act, the account opening process is pretty straightforward. Once you’ve submitted the required documents, you should be able to get your account up and running in one business day.
You’ll have to provide two valid forms of identification for the business owners along with a photo ID and a government-issued document.
In addition to this, you’re required to submit documents based on your company type:
Corporations:
- 2 pieces of identification of individuals who are the corporation’s signing authorities
- Articles of Incorporation/Association
- Certificates of Status
- Certificates of Compliance
- Certificates of Existence
- Corporate Annual Government Filing
- Corporate Profile Report
- Business License
- Business Number
- Notice of Assessment for Income Tax
Partnerships and Limited Partnerships:
- Registered declaration of partnership
- Trade name registration
- Copy of partnership agreement
Sole Proprietorships:
- Master business license
- Trade name registration
Which bank should I open a business bank account in?
Think about the different services you need based on the type of business you’re running.
We recommend that you thoroughly research the services offered by each bank to shortlist the ones that can help you meet your business objectives.
Keep in mind that the Canadian banking industry is way more centralized as compared to other countries like the United States. There are also fewer banks in Canada (only five banks dominate 90% of the retail banking industry).
The main five banks include:
- The Bank of Montreal (BMO)
- Canadian Imperial Bank of Commerce (CIBC)
- The Bank of Nova Scotia (Scotiabank)
- Toronto-Dominion Bank (TD)
- Royal Bank of Canada (RBC)
What bank fees can I expect?
When opening a bank account anywhere, you’re required to pay different banking fees and charges. Some of the fees charged by banks (including Canadian banks) are the standard monthly/annual maintenance fees, foreign transaction fees, checkbook fees, ATM fees, fees for debit transactions over the monthly limit, and paper statement fees.
When doing business in Canada, you should take into account the high banking fees charged for sending cross-border payments. In addition to the bank fees, many banks set an exorbitant exchange rate for foreign payments.
Banks commonly increase their fees and charge unfair markups, especially when exchanging currencies. Moreover, keep in mind that the exchange rates mentioned on boards in exchange bureaus and banks vary from that day’s real Foreign Exchange market rates. They don’t include the additional variable bank fees which mean that they’re always higher than stated.
How do I send domestic and cross-border payments from Canada?
Ablii is a business payments solution that makes it easy for companies to send domestic and cross-border payments. It lets you send money from Canada to Canada, the USA, and India, as well as send payments from within the USA and from the USA to Canada.
Using Ablii, you can easily pay vendors and suppliers and collect payments from business clients. Plus, it doesn’t require businesses receiving payments to create an account.
In addition to this, Ablii integrates with Quickbooks accounting software and offers a customizable approval process. It also lets you set up real-time notifications for payments.
Conclusion
Opening a business account in Canada is pretty simple given that your business meets all the necessary requirements. You should research your options before opening a business bank account in Canada to ensure your bank can meet your specific business needs.
And, with a business payments solution like Ablii, you’ll be able to send domestic and cross-border payments from Canada to the USA, India, and within Canada easily!
