Incorporation Guide · Director Residency

Director residency requirements in Canada

This page sets out which Canadian jurisdictions require a resident Canadian director, what the federal 25 percent rule means, and what a non-resident still has to provide. We prepare and file your articles of incorporation for $35.00, HST included. The government fee is separate and charged at cost: $200.00 to Corporations Canada under the CBCA, or $300.00 to the Ontario Business Registry under the OBCA. Open Corporation for $35 is a department of Gondaliya CPA. A Chartered Professional Accountant checks your board against the residency test before anything is filed.

Start Your Incorporation For $35 Book Free Consultation

The federal rule in section 105(3)

Section 105(3) of the Canada Business Corporations Act requires at least 25 percent of the directors of a federal corporation to be resident Canadians.

Where a corporation has fewer than four directors, at least one director must be a resident Canadian. That matters more than the percentage, because most new corporations have one, two or three directors.

A sole director of a federal corporation must therefore be a resident Canadian. There is no way to round the 25 percent down to zero.

Number of directors	Resident Canadians required	Effective percentage	Which rule applies
1	1	100 percent	The fewer-than-four floor in section 105(3)
2	1	50 percent	The fewer-than-four floor in section 105(3)
3	1	33 percent	The fewer-than-four floor in section 105(3)
4	1	25 percent	The 25 percent quota in section 105(3)
8	2	25 percent	The 25 percent quota in section 105(3)

This single rule is the most common reason a non-resident owner incorporates provincially rather than federally. It is a question of who sits on the board, not of who owns the shares. The federal incorporation service page covers the rest of the CBCA filing.

What resident Canadian means

A resident Canadian is a Canadian citizen ordinarily resident in Canada, a permanent resident ordinarily resident in Canada, or a Canadian citizen outside Canada who falls within a prescribed class.

Ordinarily resident is about where a person actually lives rather than where they hold a passport. A Canadian citizen who has lived abroad for years is normally not ordinarily resident in Canada.

Permanent residence has a limit attached. A permanent resident who has been eligible to apply for citizenship for more than a year and has not applied falls outside the definition.

Citizenship alone is not the test and a work permit is not the test either. The reviewer confirms the current wording of the definition against the Act before any board is signed off.

Which jurisdictions still require a resident Canadian director

Manitoba is the only province in our filing set that still imposes a 25 percent resident Canadian requirement. Every other province has either repealed its rule or never had one.

Jurisdiction	Resident Canadian requirement	Other local requirement	Status of the rule
Federal, CBCA	25 percent, and at least one where there are fewer than four directors	None beyond the registered office	In force
Ontario	None	None beyond the registered office	Repealed under Bill 213, the Better for People, Smarter for Business Act, 2020
Alberta	None	An agent for service located in Alberta	Every Canadian residency requirement removed
British Columbia	None	None beyond the records office	No Canadian quota and no BC quota
Quebec	None	None beyond the head office	No Canadian quota and no Quebec quota
Manitoba	25 percent, and a sole director must be a resident Canadian	None beyond the registered office	not confirmed, reviewer to verify on the official registry page
Saskatchewan	None	A Saskatchewan-resident director or officer, or a Saskatchewan attorney	Removed by The Business Corporations Act, 2021
Nova Scotia	None	None beyond the registered office	not confirmed, reviewer to verify on the official registry page
New Brunswick	None	None beyond the registered office	Section 60 contains no residency test
Newfoundland and Labrador	None	None beyond the registered office	Section 174 repealed by 2021 c26 s4, effective 1 April 2022
Prince Edward Island	None recorded	None beyond the registered office	not confirmed, reviewer to verify on the official registry page

Our $35.00 fee includes HST and government fees are passed through at cost with no mark-up. Every government fee by jurisdiction is set out in the guide to what it costs to incorporate in Canada, and the full list is on our full pricing page.

Ontario repealed its 25 percent rule under Bill 213, the Better for People, Smarter for Business Act, 2020. Alberta removed every Canadian residency requirement, and Saskatchewan removed its rule in The Business Corporations Act, 2021.

Newfoundland and Labrador repealed the former rule in section 174 by 2021 c26 s4, effective 1 April 2022. British Columbia, Quebec, New Brunswick and Nova Scotia impose no Canadian residency quota at all. The Ontario incorporation service page sets out the OBCA position in full.

The three exceptions to the federal rule

The 25 percent figure is the general case. Two statutory exceptions move it, and both are in section 105 itself.

A corporation operating in a prescribed business sector, or one subject to a statutory Canadian ownership requirement, needs a majority of resident Canadian directors under section 105(3.1). That is half the board rather than a quarter.

A holding corporation that earns in Canada less than five percent of the gross revenues of itself and its subsidiaries needs no more than one third under section 105(4).

The third variation is not an exception but a floor. The fewer-than-four rule means a two-person board needs one resident Canadian, which is 50 percent rather than 25.

What a non-resident still needs where no residency rule applies

Removing a residency requirement does not remove every local requirement. Two provinces replaced the director rule with something else.

Alberta requires an agent for service located in Alberta. Saskatchewan requires a Saskatchewan-resident director or officer, or a Saskatchewan attorney, even though its 25 percent rule is gone.

Every province requires a registered office at a physical address inside that province. A post office box is not accepted, and a non-resident with no Canadian address uses a registered office address service.

A corporate bank account is a separate matter again. Banks apply their own identification rules to non-resident signing officers, and those rules are not set by any registry. The guide to documents needed to incorporate lists what each registry does require.

We file your incorporation for $35.00, HST included

A CPA checks your board against the residency test before the jurisdiction is chosen.

Start Your Incorporation

Who can be a director at all

Residency is the second test. The first is whether a person is eligible to be a director in the first place, and that test is close to identical across the country.

Section 105(1) of the Canada Business Corporations Act disqualifies anyone under 18, anyone who is incapable, anyone with the status of bankrupt, and any person that is not an individual.

Ontario applies the same three personal tests under subsection 118(1) of the Business Corporations Act (Ontario). British Columbia adds a fourth under section 124, disqualifying people convicted of fraud or of offences connected with the promotion, formation or management of a corporation.

A corporation cannot sit on a board anywhere in Canada. Directors are natural persons in every jurisdiction we file in.

What a CPA checks before you incorporate

Residency is checked before the jurisdiction is chosen, because the answer can remove an option rather than merely cost money. A board with no resident Canadian cannot file federally, whatever the fee difference says.

We then check the count rather than the percentage. A three-person board with one resident Canadian complies, and a three-person board with none does not, and the arithmetic catches people who read only the 25 percent figure.

Ownership is read separately from the board. A non-resident can hold every share of a Canadian corporation, so the residency question is answered by rearranging directors rather than by giving away equity.

Tax residence of the corporation is the question underneath. A corporation incorporated in Canada is generally resident in Canada for tax purposes regardless of who directs it, and central management abroad can create a foreign tax exposure as well.

Then the usual ground. Share classes and who receives dividends, the fiscal year end within 53 weeks of incorporation, and HST registration against the $30,000 threshold over four consecutive calendar quarters. The parent firm covers the same ground in Gondaliya CPA’s practical guide to incorporating in Ontario.

Frequently asked questions

These are the questions owners ask once a board has a non-resident on it. Each answer carries the figure, the statute or the registry that makes it true, so it can be read on its own without the rest of the page around it.

Does a Canadian corporation need a Canadian director?

A federal corporation needs at least 25 percent resident Canadian directors, while most provinces require none at all. Section 105(3) of the Canada Business Corporations Act sets the federal rule. It adds that at least one director must be a resident Canadian where the board has fewer than four. Ontario, Alberta, British Columbia, Quebec, Saskatchewan, Nova Scotia, New Brunswick and Newfoundland and Labrador impose no Canadian residency quota. Manitoba is the one province in our filing set that still requires 25 percent.

Can a non-resident be the sole director of a Canadian corporation?

A non-resident can be the sole director of an Ontario, Alberta, British Columbia or Quebec corporation, but not of a federal one. Section 105(3) of the Canada Business Corporations Act requires at least one resident Canadian director where a board has fewer than four. A sole director of a federal corporation must therefore be a resident Canadian. Manitoba applies the same result through its own 25 percent rule. The registered office must still be a physical address in the province of incorporation.

What is a resident Canadian under the Canada Business Corporations Act?

A resident Canadian is a Canadian citizen ordinarily resident in Canada, a permanent resident ordinarily resident in Canada, or a Canadian citizen abroad within a prescribed class. Ordinarily resident turns on where the person actually lives rather than on citizenship alone. A permanent resident who has been eligible to apply for citizenship for more than a year without applying falls outside the definition. A work permit does not make someone a resident Canadian for this purpose.

Which provinces still require resident Canadian directors?

Manitoba is the only province in our filing set that still requires at least 25 percent of directors to be resident Canadians. Ontario repealed its rule under Bill 213 and Alberta removed every Canadian residency requirement. Saskatchewan removed its rule in The Business Corporations Act, 2021, and Newfoundland and Labrador repealed section 174 effective 1 April 2022. British Columbia, Quebec, New Brunswick and Nova Scotia never imposed a Canadian quota. Alberta and Saskatchewan replaced the rule with a local agent or local officer requirement instead.

Can a non-resident own 100 percent of a Canadian corporation?

A non-resident can own every share of a Canadian corporation in every jurisdiction we file in, because residency rules apply to directors rather than to shareholders. Section 105(3) of the Canada Business Corporations Act governs the composition of the board and says nothing about who holds the shares. A federal corporation with a wholly non-resident shareholder still needs a resident Canadian on a board of fewer than four. Choosing a province with no residency rule removes that constraint entirely.

What happens if my board stops meeting the 25 percent rule?

A federal board that falls below the resident Canadian minimum has to be corrected, because section 105(3) of the Canada Business Corporations Act applies continuously rather than only at incorporation. Changes of directors are reported to Corporations Canada within 15 days of the change. The practical trigger is a resignation, which is why a departing director is checked against the minimum before the resignation is accepted. Appointing a replacement resident Canadian director restores compliance.

Why owners trust the filing to us

Gondaliya CPA Professional Corporation is registered with CPA Ontario under firm registration number 61330051. Our clients have left us 1,300+ five-star Google reviews, and we work from 13 Ontario offices, open 9:00 AM to 8:30 PM, Monday to Sunday. We back every filing with a 30-day money-back guarantee and a 60-day fee-matching policy, and we are a Xero Partner Award Winner 2026. The platform is operated by WealthBamboo Inc., a federal corporation. Open Corporation for $35 is a department of Gondaliya CPA.

Ready to incorporate

Send the intake form and we will check your board against the residency test, confirm your jurisdiction and settle your share structure before anything is filed. Our fee is $35.00, HST included, and the government fee is shown separately at cost. Payment is by Interac e-Transfer to info@gondaliyacpa.ca, and the security question is Not Applicable because auto-deposit is enabled.

Registered CPA Ontario 61330051

1300+ Five-Star Reviews

Government Fee At Cost

30-Day Money-Back Guarantee

Start Your Incorporation Book Free Consultation

No legal advice

Gondaliya CPA Professional Corporation is a firm of Chartered Professional Accountants licensed by CPA Ontario, firm registration number 61330051. It is not a law firm. We prepare and file corporate documents and we provide accounting and tax advice. Nothing on this page is legal advice, and reading it creates no solicitor and client relationship. For legal advice, including advice on a shareholder agreement before you sign it, consult a lawyer licensed in the province where your corporation carries on business.