[quote]1. Is there a similar corporation like that in Canada? If not can anyone please recommend what I should set my corporation to (what type). Do I have to file a separate business tax (LLC does not require separate business tax in USA)?
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I think that it might be like a limited partnership. No matter what type of company you start (even a corporation) no one will lend you money without a personal guarantee. A corporation MAY help you if you get sued but that is about it. A corporation will cost about $1000 and needs a lawyer to do. A partnership or similar will cost about $50 - $100 and can be done by you (University Ave. above the Business Depot near Dundas).
[quote]2. What else do I need to be doing aside from incorporating?[/quote]
You will need a vendors permit, GST and PST registration. Good accounting software will help also.
[quote]3. I will be importing my products from Italy directly to Toronto. I'm quite confused about the tax implications. I know that everytime I get a package from outside Canada, I get to pay an exuberent amount of fees (taxes, brokers) that amount to quite a lot. What would I expect in my case?[/quote]
It would depend on the product being imported. I export and my customers never pay duty or taxes. Why not try bringing in a small order and see how it goes. You can also ask the supplier to give you a price with the duty and taxes included.
[quote]4. When someone buys from me from USA, is it going to be a nightmare shipping? Will the buyer be forced to pay brokerage fees, additional taxes(like what??) [/quote]
It is not a nightmare to ship to the USA. It is only 30 miles away. Brokerage fees, taxes, etc. are things you are going to have to find out. Try [url="http://exportsource.ca/gol/exportsource/interface.nsf/vSSGBasic/es02687e.htm"]here[/url] for starters.
[quote]5. How about shipping to fellow Canadians? Any problems there with taxes?[/quote]
If your product is taxable then you will have to charge ONT residents PST. I am not sure if GST should be charged for ONT or ALL of Canada. There is tax on shipping.
[quote]6. For any Canadian stores, what is the response from US buyers? Are they scared away because it's not an American store?[/quote]
We have lots of customers in the USA. They love the conversion rate. The only thing is we have alot of FDA paperwork to fill out for every order to the USA.
[quote]7. What other concerns should I address?[/quote]
Too many to list;
The best way to learn is to ask the people already doing it. If you have a tax question ask the Gov't (but they are not always right). Suppliers are better at answering questions. If the company in Italy has shipped to Canada before they will be able to tell you about taxes and duties, etc. People already exporting to the USA will be able to tell you about brokerage fees, etc. for similar products.
For accounting software there is a contribution that links OSc with Quickbooks and works with the Canadian version.
For shipping my advice is FedEx and UPS can get expensive, if your items are not very valuable then try Canada Post. The good thing about FedEx and UPS is they are a wealth of shipping information and will be able to tell you if the products exported will have taxes, etc. and also what type of export paperwork you will have to provide, if any. Canada Post sucks for getting information.
Ask your bank about starting a business in Canada (ask for a referal at a Business Banking Center, not your local branch). They have done it before and have booklets available for start-ups. FBDB (College Park ???) has a great book also. They will include all the phone numbers and addresses you need. There is also a gov't book store somewhere around Bay & Gerrard.
If you are not working and qualify for EI they will (if you qualify) pay you to take a course in starting your business and then pay you during your start-up (for a year I think). Extra money never hurts.
[quote]Sorry I'm a bit confused here. I know of a certain charge where the broker (not sure if they're called that) has to open your package to make sure it's safe, and then charge a fee. Is that duty or something else? Good to know anything less than $100 is duty free. [/quote]
I ship coffee (which can be used to pack drugs) and have NEVER had one of my packages opened by any customs office. Some products have duty and others do not. It is a all about finding out what the rates are on the products you sell and marking the packages with the appropiate information. I have never heard of the $100 or less thing.
[quote]I did a bit of research and I found that using Canada Post (which is the cheapest) way of sending things across the border. But sometimes they may inspect that item, and that'll cost $25.[/quote]
I have never heard of that. Include the proper docutmenttion and all should be fine. I am sure they do inspect random packages but I don't believe they charge you just because they inspect yours. It is probably a brokerage fee that they were referring to. Canada Post does not have brokerage fees, only UPS and FedEx.
[quote]Thanks for your answers. I'm on a limited budget, so contacting an accountant is not really an option for me . I've contacted Revenue Canada but they don't really know anything. I appreciate all your answers. [/quote]
If you can't at this time afford an accountant I would go with the partnership or sole propriotorship. Corporate taxes are a headache and will cost you between $650 - $1000 per year just to file them. With the others you just add your income to your personal tax return.
[quote]Unless you think you will have alot of debt. If your business folds and you are a corporation, creditors will go after the corporation and not you personally. You could incorporate sometime down the road.[/quote]
A corporation may save you against some suppliers but the Gov't and Banks, etc. will still come after you. You will not be able to borrow money without a personal guarantee also.
[quote]I've contacted Revenue Canada but they don't really know anything.[/quote]
What a surprise, try other people who sell similar products. When I started I found everything I needed from my competitors. They always helped me when I started because they have all been in the same position.
Good luck with everything.
Peter
Java Roasters Inc.
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. I've contacted Revenue Canada but they don't really know anything. I appreciate all your answers.
