Incorporate a Business in Canada as a Refugee

Immigration status does not decide whether a person is allowed to incorporate a business in Canada. It does decide several concrete points of Canadian corporate law: whether that person can sit as the only director of a federal corporation, whether a one-time federal filing is required when the business is established, which identification a bank will accept to open a corporate account, and how smoothly a Canada Revenue Agency registration will go.

An Important Note on Scope

Hadri Law is a corporate and commercial law firm. We do not practise immigration law and this article is not immigration advice. It explains how Canadian corporate law, tax law, and financial-institution rules apply to a person's decision to incorporate a business, based on that person's current immigration status. Nothing in this article is intended to, and nothing about incorporating a business will, affect, support, strengthen, or expedite a refugee claim, a Protected Person's permanent residence application, or any decision by the Immigration and Refugee Board or Immigration, Refugees and Citizenship Canada. Anyone with questions about their claim or application should speak with a licensed immigration lawyer or a Refugee Law Office or Legal Aid clinic.

That statement is not a formality. The corporate questions below have clear answers. The immigration questions do not belong to us, and readers should not treat anything here as a comment on how a claim or application will be decided.

Can a Refugee Incorporate a Business in Canada?

Yes. Anyone in Canada can be a shareholder in a corporation regardless of immigration status. Director eligibility, a one-time Investment Canada Act notification, and banking or CRA registration steps differ depending on whether someone is a permanent resident, a protected person, or a refugee claimant with a pending claim. This is a corporate law question, separate from the immigration claim itself.

The rest of this guide works through those differences group by group. It covers three legally distinct positions in one article because the underlying corporate law questions are identical across all three. Only the answers change.

The Three Groups at a Glance

	Group 1: Resettled refugee (GAR or PSR)	Group 2: Protected person, PR application pending	Group 3: Refugee claimant, claim pending at the IRB
PR status	Permanent resident on landing	Not yet a permanent resident	Not a permanent resident
Status under the Investment Canada Act	"Canadian"	"Non-Canadian"	"Non-Canadian"
ICA notification on establishing a new business	Not required	Required	Required
Meets the CBCA "resident Canadian" test	Yes	No	No
Can be sole director of a federal (CBCA) corporation	Yes	No	No
Can be sole director of an Ontario (OBCA) corporation	Yes	Yes	Yes
Typical banking ID	PR card	Work permit, plus PR-application documents	Refugee Protection Claimant Document (IMM 1442), plus work permit if issued
Typical SIN	Permanent SIN	900-series SIN if on a work permit	900-series SIN tied to work permit expiry
Work authorization needed to work for own corporation	No separate permit needed once landed	Yes, valid work permit required	Yes, valid work permit required

Read the table as a map, not as advice about any individual. The rows are unpacked below, because the "no" in the CBCA row changes where a person should incorporate, and the ICA row creates a filing deadline that is easy to miss.

Ownership Is Not the Constraint: Three Things Are

There is a persistent misconception that a person needs citizenship or permanent residence to own a Canadian company. That is not the law. Neither the Canada Business Corporations Act nor Ontario's Business Corporations Act imposes any citizenship or residency condition on shareholders. A person living outside Canada entirely can hold 100 percent of the shares of a Canadian corporation. So can a refugee claimant whose hearing has not yet been scheduled.

The real constraints for people in the three groups above are narrower and more specific:

Who can serve as a director, which is governed by residency rules that differ sharply between the federal statute and Ontario's
A one-time federal notification under the Investment Canada Act, which applies to non-Canadians establishing a new Canadian business
Administrative friction at the bank and at the Canada Revenue Agency, driven by which identity and status documents a person holds

Each of these gets its own section below. If you are looking for the general mechanics of incorporating in Ontario, the name search, the articles, the minute book, and so on, our guide on Ontario incorporation for foreign entrepreneurs covers that ground. This article is the status-specific overlay on top of it.

Constraint One: Director Residency

This is the single most practically consequential rule in this article, because it determines where a person should incorporate.

The Federal Rule

Under the Canada Business Corporations Act, RSC 1985, c C-44, s. 105(3), at least 25 percent of the directors of a CBCA corporation must be "resident Canadians." Where a corporation has fewer than four directors, at least one of them must be a resident Canadian (CBCA s. 105). A one-director corporation therefore needs that one director to satisfy the test.

"Resident Canadian" is defined in CBCA s. 2(1). In substance, it means a Canadian citizen ordinarily resident in Canada, a Canadian citizen not ordinarily resident in Canada who falls within a prescribed class, or a permanent resident within the meaning of the Immigration and Refugee Protection Act who is ordinarily resident in Canada. The definition includes a narrow carve-out excluding a permanent resident who has been eligible to apply for citizenship for more than one year and has not done so.

The definition does not include protected persons. It does not include refugee claimants. Protected person status under IRPA s. 95 is a distinct legal status from permanent residence, and it does not convert into permanent residence until IRCC approves the PR application. Until that approval lands, a protected person is not a "resident Canadian" for CBCA purposes.

The practical result is straightforward. A resettled refugee who became a permanent resident on landing meets the test personally and can incorporate federally as the sole director. A protected person awaiting PR, or a refugee claimant, cannot be the sole director of a CBCA corporation. They would need a Canadian citizen or permanent resident to sit alongside them as a co-director to satisfy s. 105(3).

Ontario Removed Its Version of the Rule

Ontario used to have an equivalent requirement. It repealed it. The Better for People, Smarter for Business Act, 2020 (Bill 213) amended the Business Corporations Act (Ontario), RSO 1990, c B.16, to eliminate the resident Canadian director requirement, and that change took effect on July 5, 2021, by proclamation of the Lieutenant Governor (Bill 213; OBCA). Ontario corporations now have no minimum resident-director requirement at all. Commentary from Stikeman Elliott and McMillan LLP at the time confirms both the effective date and the scope of the change.

The upshot, stated plainly: a protected person or a refugee claimant who wants to be the sole director of their own corporation will generally incorporate provincially in Ontario under the OBCA rather than federally under the CBCA. That is not a workaround or a grey area. It is a deliberate policy choice Ontario made in 2021, and it is the ordinary reason non-permanent-resident founders in this position choose an Ontario corporation.

Federal incorporation remains available and sometimes preferable, particularly where a business wants a nationally protected corporate name. It simply requires finding a co-director who meets the resident Canadian test, which is a real commitment to ask of someone and should be documented properly if it is done.

Constraint Two: The Investment Canada Act Notification

The Investment Canada Act has two separate mechanisms that are constantly confused with each other: notification, which is administrative, and review, which is substantive and applies only above monetary thresholds or in national security contexts. This section deals only with notification. For review thresholds and net benefit analysis, see our articles on when an investment triggers review under the Investment Canada Act and the recent reforms to the Investment Canada Act, or our Investment Canada Act practice page.

Who Is a "Canadian" Under the Act

Section 3 of the ICA defines a "Canadian" to include a Canadian citizen and a permanent resident within the meaning of IRPA who has been ordinarily resident in Canada for not more than one year after becoming eligible to apply for citizenship. A "non-Canadian" is, in essence, everyone else.

That definition tracks the CBCA analysis closely. A resettled refugee holding permanent residence is a Canadian for ICA purposes. A protected person whose PR application is still in process is not. A refugee claimant is not.

What Non-Canadians Have to File

A non-Canadian who establishes a new Canadian business must file a Notification. The obligation flows from ICA ss. 11 and 12, and the filing window runs from any time prior to implementation up to and including 30 days after the business is established. Innovation, Science and Economic Development Canada sets out the process in plain language in its overview of the Act and its frequently asked questions.

Two points matter for readers in Groups 2 and 3, and both tend to come as a relief. First, a notification is not an application. It does not require government approval before the business starts operating. It is a filing that tells the federal government a new Canadian business now exists and who established it. In the ordinary case, nothing further happens. Second, it is a one-time obligation attached to establishing the business, not an annual compliance item. The practical risk is simply forgetting it, because the 30-day clock starts at implementation and the form is easy to overlook while a founder is dealing with bank accounts and leases.

Anything beyond the notification, including net benefit review and the national security review provisions, is outside the scope of this article and outside what most first-time founders in this position will encounter.

Constraint Three: Opening the Corporate Bank Account

This is where founders in Groups 2 and 3 most often run into unexpected difficulty, and it is worth understanding why before walking into a branch.

Business Accounts Are Not Protected the Way Personal Accounts Are

The Access to Basic Banking Services Regulations under the Bank Act create a right of access to personal deposit accounts on specified identification (SOR/2003-184). Those regulations do not apply to corporate or business accounts. A bank retains commercial discretion over whether to onboard a business client, subject to the anti-money-laundering obligations described below.

That distinction surprises people who have already opened a personal account without difficulty using a status document. The corporate account is a separate process governed by separate rules.

What FINTRAC Requires

Financial institutions owe client identification and beneficial ownership obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17 and its regulations. For a corporate client, the bank generally has to do three things:

Confirm the corporation exists, using articles of incorporation, a corporate registry search, or an equivalent record, and record the names of the directors (FINTRAC guidance on identifying entities)
Identify the individuals who will operate the account, using acceptable identification methods
Obtain and confirm beneficial ownership information, covering individuals who directly or indirectly own or control 25 percent or more of the corporation (FINTRAC beneficial ownership guidance)

For a single-founder corporation, the founder is both the operating signatory and the sole beneficial owner, so the bank identifies the same person twice for two different regulatory reasons.

Documents by Group

A permanent resident card is a widely accepted government-issued photo identification document and generally poses no issue for Group 1.

For Groups 2 and 3, a valid work permit is a government-issued document that many institutions will accept as part of the identification process. IRCC's guide to status documents describes the permanent resident card, the work permit, and the Refugee Protection Claimant Document (IMM 1442) and what each one establishes.

The IMM 1442 deserves a specific caution. It is a genuine federal status document, and it appears frequently in guidance about personal deposit accounts. Whether a given financial institution will accept it as primary or supporting identification for a corporate account varies by institution and by branch. This article cannot tell you that your bank will accept it. Confirm directly with the institution before assuming it will.

The practical approach is to call the branch ahead, ask what the business banking team requires for a corporation with a non-permanent-resident director, and then arrive with everything: the certificate and articles of incorporation, the corporate registry profile, the CRA Business Number confirmation, and every status and identity document you hold. Being turned away for a missing document and rebooking two weeks later is the most common failure mode here, and it is avoidable.

Constraint Four: CRA Business Number, Director SIN, and Payroll

Every corporation needs a Business Number from the Canada Revenue Agency, and program accounts for GST/HST, payroll, and corporate income tax hang off that BN. Registration generally requires a director's Social Insurance Number, or in narrow cases an Individual Tax Number.

That requirement is where a founder's status shows up in the tax system.

The 900-Series SIN

Temporary residents in Canada with work authorization, including work permit holders, are issued a temporary SIN beginning with the digit 9. Service Canada's guidance on 900-series SINs confirms that these numbers carry an expiry date matched to the expiry of the underlying immigration document.

Two consequences follow. First, a director holding a 900-series SIN generally cannot complete registration through Business Registration Online and must instead register on paper using Form RC1 (CRA registration guidance). That is a processing delay rather than a barrier, but it is a delay worth planning around if a lease start date or a first payroll run is already scheduled.

Second, and more importantly, the SIN expires. If a corporation is running payroll and the director's SIN on file with the CRA has lapsed because a work permit expired, CRA account functions tied to that identifier can be interrupted. Remittances are the part of a business that least tolerates interruption, because late remittance penalties accrue regardless of the reason. Founders in Groups 2 and 3 should track work permit renewal timelines as a corporate compliance item, not just a personal one, and update the SIN with Service Canada and the CRA promptly after each renewal.

Group 1 does not face this. A permanent resident holds a standard SIN with no expiry, and Business Registration Online is available in the ordinary way.

It is also worth knowing that a Business Number obligation is not unique to corporations. A sole proprietorship can require one too, on a different analysis, which we cover in our post on whether a sole proprietorship requires a CRA Business Number. A sole proprietorship carries no director residency rule and no separate corporate ICA notification for establishing a corporation, but it also provides no limited liability, which is usually the reason founders incorporate in the first place.

Work Permits: Incorporating Is Not "Work," but Running the Business Usually Is

This distinction is important enough to state on its own, and it is one of the few places in this article where corporate law and immigration law touch.

Incorporating a company is a filing, holding shares is an ownership interest, and holding the title of director is an office. None of these, standing alone, is generally treated as "work" under Canada's immigration framework, which is why the corporate steps described above are available to people in all three groups.

Actually performing services for the corporation is different. Providing labour, delivering the service the business sells, managing operations day to day, or otherwise doing the work of the business generally is "work" and requires authorization under the Immigration and Refugee Protection Regulations (SOR/2002-227). Owning the corporation you are working for does not change that analysis.

For Groups 2 and 3, that means a valid work permit is needed to operate the business, and it is an ongoing requirement rather than a one-time condition satisfied at incorporation. A permit that expires while the business is running does not just affect the founder personally. It affects who can lawfully perform the work the corporation has contracted to deliver.

We are not immigration counsel and cannot advise on any specific permit, its conditions, or its renewal. This point is included because founders routinely assume that owning the business resolves the work authorization question, and it does not. Anyone in this position should get that assessed by an immigration lawyer before committing to client contracts or a lease.

Group-by-Group Summary

Resettled Refugees Who Landed as Permanent Residents

From a pure corporate law perspective, this is the most straightforward of the three positions, and in practical terms it is indistinguishable from any other Canadian founder. A resettled refugee, whether government-assisted or privately sponsored, becomes a permanent resident on landing. That makes the person a "Canadian" under the ICA, so no notification is required when establishing a new business. It also satisfies the CBCA "resident Canadian" definition, so federal and Ontario incorporation are both fully available with a single director. The permanent resident card serves as identification at the bank, a permanent SIN allows online CRA registration, and no separate work permit is needed to work in the business.

The remaining questions for this group are the ordinary ones every founder faces: share structure, whether a holding company makes sense, and whether a shareholders agreement is needed if there is more than one owner.

Protected Persons With a Pending PR Application

A protected person has received a positive determination but has not yet completed the permanent residence process. That gap is where the corporate friction sits. Because permanent residence has not been granted, this founder is a non-Canadian under the ICA and must file a notification when establishing a new Canadian business. The person also does not meet the CBCA resident Canadian definition, which is why Ontario incorporation under the OBCA is usually the practical choice: it permits a sole director with no residency condition.

On documents, precision matters here. A protected person at this stage is generally not holding a Refugee Protection Claimant Document. The IMM 1442 is the claimant-stage document, issued while a claim is pending. A protected person with a PR application in progress will typically hold a work permit along with documentation of the positive protection decision and the in-process PR application, and will not yet hold a Confirmation of Permanent Residence, since that document issues only once IRCC finalizes the PR application. Those are different documents establishing different things, and conflating them causes problems at the bank. If a work permit is held, the associated SIN is a 900-series number with an expiry date, and the CRA friction described above applies.

Refugee Claimants With a Claim Pending Before the IRB

The corporate analysis for a claimant matches the protected person analysis on every point: non-Canadian under the ICA and therefore a notification obligation, no CBCA resident Canadian status and therefore Ontario incorporation as the ordinary route, a 900-series SIN if a work permit has been issued, and a valid work permit needed to perform services for the corporation.

The status document differs. A claimant with a pending claim holds the Refugee Protection Claimant Document (IMM 1442), and as noted above, whether that document alone will satisfy a bank's corporate onboarding process is institution-specific.

What sets this group apart is not a different rule. It is that the claim's outcome is genuinely unknown, and prudent corporate planning accounts for outcomes that have not been decided yet.

Contingency Planning for Refugee Claimants

The following is ordinary business planning, of the kind any lawyer would recommend to any founder whose future presence in the business is uncertain for any reason. It is not a comment on the merits or likely outcome of any claim, and nothing in it should be read that way.

The corporation survives. A corporation is a separate legal person. It does not dissolve, lapse, or become void because a shareholder or director loses status or leaves Canada. Its filings, its contracts, and its liabilities continue exactly as before. This is worth stating clearly because founders often assume the company is somehow tied to their personal status. It is not.

The director seat needs a plan. A director who becomes unable or unwilling to act must be replaced through a proper resolution, and directors' resignations and appointments must be reflected in the corporate records and filed where required. The problem is timing: replacing a director in a hurry, from outside the country, with no successor identified, is far harder than naming a co-director or a designated successor at the outset. Deciding in advance who steps in, and having that person's consent to act documented, is inexpensive now and valuable later.

Shares can be held from anywhere. There is no residency restriction on share ownership, so a founder who leaves Canada can continue to hold shares, or can sell or transfer them, subject to the corporation's articles and any shareholder agreement. What matters is that the transfer mechanics exist before they are needed. A shareholders agreement with clear transfer, valuation, and buy-out provisions is the tool for this, and it is far easier to negotiate when everyone is present and the situation is calm.

Personal guarantees do not go away. This is the point most often overlooked. If a founder personally guarantees a commercial lease, an equipment finance agreement, a supplier line, or a business loan, that guarantee is a personal contractual obligation. It is not affected by immigration status, it does not terminate if the guarantor leaves Canada, and a landlord or lender can generally enforce it. Before signing any personal guarantee, a founder in this position should understand exactly what obligation is being taken on and for how long, and should ask whether the guarantee can be limited in amount or duration.

Putting a shareholders agreement and a succession plan in place from the outset is simply the correct response to uncertainty. It is the same advice we would give a founder with a serious health issue, a founder planning to relocate, or a founder whose co-owner's commitment is untested.

Frequently Asked Questions

Can a refugee start a business in Canada?

Yes. There is no citizenship or residency restriction on owning shares in a Canadian corporation. A resettled refugee who is a permanent resident can incorporate federally or provincially as a sole director. Protected persons and claimants can also own and incorporate, but face director residency, notification, and banking differences described above.

Can a refugee claimant incorporate a company in Canada?

Yes. A refugee claimant can incorporate and own a Canadian corporation. In practice this usually means incorporating in Ontario, because the OBCA has no resident-director requirement, and filing an Investment Canada Act notification within 30 days of establishing the business as a non-Canadian.

Can a protected person be a director of a Canadian corporation?

Yes, but not as the sole director of a federal CBCA corporation. A protected person without permanent residence does not meet the CBCA "resident Canadian" definition in s. 2(1), so a CBCA corporation would need a qualifying co-director. An Ontario corporation has no such requirement and permits a sole director.

Does incorporating a business help a refugee claim or PR application?

No. Incorporating a business has no effect on a refugee claim, a permanent residence application, or any decision by the Immigration and Refugee Board or IRCC. Incorporation is a commercial decision governed by corporate law. Anyone with questions about their claim should consult a licensed immigration lawyer or a legal aid clinic.

Do refugee claimants need to file anything under the Investment Canada Act?

Yes. A refugee claimant is a non-Canadian under ICA s. 3, so establishing a new Canadian business triggers a notification obligation under ss. 11 and 12. The filing can be made before implementation or within 30 days after. Notification is administrative and does not require approval before operating.

What ID do I need to open a corporate bank account as a refugee claimant?

Expect the bank to confirm the corporation exists using articles of incorporation or a registry search, identify you personally, and record beneficial ownership at 25 percent or more. Acceptance of the IMM 1442 for business accounts varies by institution. Confirm requirements with the branch before your appointment.

Can I be the sole director of my own company without permanent residence?

In Ontario, yes. The OBCA resident-director requirement was repealed effective July 5, 2021 under Bill 213, so an Ontario corporation can have a single director regardless of residency. Federally, no: CBCA s. 105(3) requires at least one resident Canadian director where there are fewer than four.

Do I need a work permit to run my own corporation?

Generally yes, if you are not a permanent resident. Incorporating, owning shares, and holding a director title are not usually "work." Performing services for the corporation, including day-to-day operations and management, generally is, and requires valid authorization. Confirm your specific situation with an immigration lawyer.

Sources & Official Resources

Federal Statutes Cited

Provincial Statutes Cited 9. Business Corporations Act (Ontario), RSO 1990, c B.16 10. Bill 213, Better for People, Smarter for Business Act, 2020

Government Agency Guidance 11. Innovation, Science and Economic Development Canada: Investment Canada Act Overview 12. ISED: Investment Canada Act Frequently Asked Questions 13. FINTRAC: Guidance on Identifying Entities 14. FINTRAC: Beneficial Ownership Requirements 15. IRCC: Guide to Immigration Status Documents 16. Service Canada: Social Insurance Numbers for Temporary Residents 17. Canada Revenue Agency: Register for a Business Number 18. Canada Revenue Agency: Business Registration Guidance

Contact Hadri Law

If you are exploring incorporating a business in Ontario and want to understand director eligibility, banking requirements, and CRA registration for your situation, our corporate team can walk through the structure with you. Hadri Law advises founders on incorporation, share structure, shareholders agreements, and Investment Canada Act notifications, and our founder Nassira El Hadri is a corporate and commercial lawyer admitted to the Law Society of Ontario.

To be clear about what we do and do not do: we advise on the corporation. We do not advise on refugee claims, permanent residence applications, or work permits, and nothing we do affects immigration status. For those questions, please speak with a licensed immigration lawyer, a Refugee Law Office, or a Legal Aid clinic.

Call (437) 974-2374 for a free initial consultation, or book directly at calendly.com/hadrilaw/free-consultation. We serve clients in English, French, Spanish, and Catalan.

This article provides general information about Canadian corporate law and is not legal advice. It is not immigration advice. Reading it does not create a solicitor-client relationship. Every situation is different, and you should speak with a lawyer about your specific circumstances.