By Sharad Gondaliya, CPA
Many websites and advisers still say an Ontario corporation needs a Canadian resident director. That stopped being true on July 5, 2021. Today a non-resident can be the sole director and sole shareholder of an Ontario corporation. Here is what changed, what stayed the same, and what it means if you already pay a nominee director.
Open Corporation for $35 is a department of Gondaliya CPA.
What changed
Until 2021, Ontario’s Business Corporations Act required at least 25% of directors to be resident Canadians, the same as the federal rule. Ontario’s Bill 213, the Better for People, Smarter for Business Act, 2020, repealed that requirement. The change came into force on July 5, 2021.
| Rule | Before July 5, 2021 | Since July 5, 2021 |
|---|---|---|
| Resident Canadian directors | At least 25% | None required |
| Sole non-resident director | Not allowed | Allowed |
| Non-resident shareholders | 100% allowed | 100% allowed |
| Minimum number of directors | 1 | 1 |
What did not change
- The corporation still needs a registered office address in Ontario. A post office box alone is not accepted.
- Directors still carry personal liability for unremitted payroll deductions, withholding tax and GST/HST.
- The corporation still files a T2 return, an Ontario annual return and any GST/HST and payroll returns.
- Tax is unchanged. A corporation controlled by non-residents pays the general rate of 26.5% in Ontario.
Federal still has the rule
The federal Canada Business Corporations Act still requires at least 25% resident Canadian directors, and at least one when the board has fewer than four. That is why we recommend Ontario, or BC, to non-resident founders. As of October 2026, the federal rule remains law.
Open Corporation for $35 is a department of Gondaliya CPA. We regularly incorporate Ontario corporations with fully non-resident boards.
Already paying a nominee director in Ontario?
If your Ontario corporation added a resident director only to meet the old rule, you may no longer need one. The usual steps:
- Confirm no lender, licence or contract requires a Canadian director.
- The nominee resigns in writing, or the shareholders remove the director by resolution.
- File a Notice of Change with the Ontario Business Registry within 15 days.
- Update CRA, your bank and your minute book.
The departing director stays liable for 2 years for amounts that went unremitted while they served. Please make sure all remittances are current before the change.
Stuck with a federal corporation?
A federal corporation can move to Ontario through continuance, then drop the resident director. See moving a federal corporation to Ontario.
What the change means in practice
| Step | Visit to Canada needed? |
|---|---|
| Incorporate an Ontario corporation | No |
| Register all CRA accounts | No |
| Open a Canadian business account | No; we help you do it remotely, and the institution gives final approval |
| File annual returns | No |
Open Corporation for $35 is a department of Gondaliya CPA. Questions? Please email info@opencorporationfor35.ca.
FAQs
Is the rule change permanent?
It is current law. Any future change would need new legislation, and we would update our clients.
Does BC have a resident director rule?
No. BC also allows 100% non-resident directors.
Who is Open Corporation for $35?
Open Corporation for $35 is a department of Gondaliya CPA. Gondaliya CPA is a CPA Ontario firm in Toronto, led by Sharad Gondaliya, CPA.
Start your Ontario corporation
Please start at opencorporationfor35.ca or email info@opencorporationfor35.ca. Open Corporation for $35 is a department of Gondaliya CPA.
