How to Open a Business in Florida as a Canadian: Full Walkthrough

Are you also a non-US resident considering opening a business in Florida? “The Sunshine State” is a choice for many business owners and has much to offer.
According to the SBA (Small Business Administration), about 3.1 million small businesses operate in Florida. The key to opening a business in Florida as a foreigner is getting familiar with a few essentials: choosing the proper business structure, registering with the state, securing an EIN for taxes, and ensuring your visa allows you to operate legally in the U.S.
But don’t worry—we’ve got you covered! In this guide, I will guide you through opening a business in Florida as a Canadian step-by-step, and answer all your questions!

What Kind of Visa Do You Need?

If you decide to buy a business or form one in the US,  first, you must know what type of visa you should apply for. Canadians typically have two types of visas. They are appropriate for starting or buying a business in the US.  

1. E-2 treaty investor visa 
2. EB-5 green card

E-2 treaty investor visa

This type of visa is the right choice if you want to launch your own business.

• You can renew it every five years if the company still operates. 
• You need lower investment requirements. (from $100,000 to $300,000) 
• You must ensure your investment is spent or, at least, “at risk,” or your visa will expire.
• It is available only for treaty countries. (Unavailable for China, India, and Brazil)
• You need to have active involvement in the business.

EB-5 green card

On the other hand, applying for an EB-5 green card is like getting the whole package.

• You can conduct business in the United States territory.
• This type of visa is available for all countries across the globe. 
• You will get immediate and permanent residency. 
• You can travel, study, and invest.
• If you’re wondering, “Can I work in Florida as a Canadian?” the answer is also yes.
• From November 21, 2019, they changed the EB-5 investment amount to a minimum of $900,000 for regional center investment. (3 to 5 years commitment)

How to Open a Business in Florida as a Canadian?

Step 1: Name Your Florida Company 

When opening a business in Florida as a Canadian, start with a list of potential business names. Choose the name that interests you, but don’t decide just yet. Make sure the name is available and not currently being used. For this purpose, check the Division of Corporations’ online data. Then, check the US Patent and Trademark Office to see if anyone has already trademarked it. If you’re out of options, you can try business name generators. Lastly, double-check everything accordingly. Then, use a domain name generator to see if you can purchase the web address. 

Step 2: Hire a Florida Residing Registered Agent

To open a business in Florida as a Canadian, you must hire a registered agent who lives in Florida. Your registered agent must have a physical address in Florida, as well.
Registered agents are individuals or legal entities, such as law firms. They are responsible for receiving legal documents on behalf of your company and should be available five days a week. 

Step 3: Choose the Right Type of Business Ownership

You should consider many factors before selecting the correct type of ownership for your business. It largely depends on whether:

• Your business has none or multiple partners
• Your business operates as a profitable or non-profitable organization
• Your business needs any level of liability.

Knowing the answers to these questions can help you narrow your options and decide on a business structure that would work well for you. 

But first, let’s dive deep into the most common types of business structures.

Corporation 

A corporation is a type of legal business structure that works separately from its shareholders or owners. Instead, the shareholders elect a board of directors to run and control the business.

Pros:

• Corporations are an excellent choice. They protect the owner’s personal assets and belongings from litigation. 
• Corporations are legal entities that work separately from their owners and managers.
• In the case of an owner’s decease, the corporation can’t ever dissolve. Simply because they believe it to be a separate “person.”
• You have the authority to issue stocks to raise funds from investors.

While offering limited liability, it has disadvantages, too.

Cons:

• Corporations face a lot of government intervention. And filing taxes can get overwhelming. 
• Setting up corporations is relatively complicated. It also costs much more than other types of businesses. Therefore, it’s rather more challenging to maintain. 

Fees:

• Filing fees: $35 
• Registered agent designation: $35
• Non-Profit Annual Report: $61.25
• Profit Annual Report (with supplemental fee): $150
• Amended Profit Annual Report: $61.25

How to open a corporation in Florida as a Canadian?

1. Articles of Incorporation 

To register a corporation in Florida, you must submit Articles of Incorporation to the Florida Division of Corporations. The Florida Department of State’s Division of Corporations guides you through the detailed process. You can find it in the requirements section of their website. 

2. Corporate Bylaws

Prepare corporate bylaws. It is a document containing the structure and governance of your business. You can find the exact information you need to put in the corporate bylaws in the Florida Business Corporation Act. 

3. Board of Directors

To open a corporation in Florida, you should assemble a board of directors. Your board of directors should align with oversight and management. There are rules regarding who can be a director and who cannot. You can find it in the Florida Business Corporation Act. Once you have assembled a board of directors, it is time for the first board meeting. You must introduce the chosen directors to everyone in your first board meeting.

4. Stocks Issuance 

Issuing stocks is a way to raise funds and distribute ownership. It is also a great way to attract experienced and qualified staff to bring in their talent. Usually, the corporation issues the stock in the first board meeting. For further information, visit the Florida Business Corporation Act.

Sole Proprietorship

A sole proprietorship is the simplest business structure. It is unincorporated and only has one owner. 

Pros:

• The taxation process is pretty simple and straightforward. That is because it only has one owner. 
• It requires the least amount of administrative work and lower startup fees.
• Since you’re the sole owner, you get to keep all the benefits and revenue. 

Cons:

• A sole proprietorship business structure doesn’t offer you personal protection from liabilities. In the event of debts or lawsuits, you may lose all your personal assets. 

LLC (Limited Liability Company)

LLCs are considered unique entities. They offer a combination of a sole proprietorship’s low costs and the liability protection of a corporation. You also have multiple taxation options. 

Pros:

• The setup process is pretty straightforward. 
• Your personal and business assets will be separated. And also safe from litigation. 
• LLCs are only subject to federal taxation and not state taxation. 
• You have three options for taxation. You can decide to be taxed as a pass-through entity.

Cons:

• You can’t issue stocks to invite investment. Therefore, finding the investors would be demanding, and the budget would be tight. 
• Starting-up fees for LLCs compared to other structures are high. 

Fees:

• Filing fee (required): $100 
• Registered agent: $25. 
• Annual Report (& Supplemental Fee):  $138.75.
• Amended Annual Report: $50.

If you are considering opening a business in Florida as a Canadian, read below.

LLC business structure is suitable for small to medium-sized businesses. Usually, new businesses choose an LLC business structure. That is because there is less worry about setting up a corporation. 

Opening an LLC in Florida as a Canadian has some steps, which we will now briefly explain:

1. Choose the right state to set your business up: Look for a state that has tax regulations that suit you the best. Some states, like Wyoming, Delaware, and Nevada, are more business-friendly than other states. They don’t impose state income tax on non-US citizens, don’t disclose private information of business owners to the public, and generally have regulations in business owners’ favor. 
2. Choose a name for your LLC. The name you pick out should be unique. And not used by anyone else but you. It also should include the phrase “Limited Liability Company”. 
3. File the legal documents. Most states require you to file Articles of Organization. Once the Secretary of State approves it, your LLC is formed. 
4. Hire a registered agent. A registered agent is responsible for receiving the legal documents on your behalf. And they also need to live in the state where your LLC is formed. 
5. Get an Employer Identification Number. The IRS issues EINs for businesses. You must obtain one. This is because it’s how the IRS handles the taxation process for your business. 
6. Open a US business bank account. It is a crucial step in the LLC formation process. When you have one, you can separate your personal and business finances. It also helps smooth the conducting of transactions.
   
   
   

Step 4: File the Necessary Paperwork

If you want to open an LLC in Florida as a Canadian, you must file the Articles of Organization for Florida. 

To incorporate your company, you must file Articles of Incorporation. If you have hired a registered agent, there is a section where you must put the names in these articles. 

Step 5: Get an EIN

There is a crucial difference between opening a business in Florida as a Canadian and a US citizen. 

As a non-US citizen, you must apply for an EIN (Employer Identification Number) online. You need to file Form SS-4. There’s no complication, and the process is relatively straightforward. 

This 9-digit number is unique to every business. The IRS issues this number for taxation purposes. If you are a US citizen, you won’t need this number. Your social security number is enough. That’s how the IRS will handle your taxation process.

Step 6: File Your Beneficial Ownership Information Report

As a Canadian, you are almost done opening a business in Florida. In this step, you must file a Beneficial Ownership Information (BOI) with the Financial Crimes Enforcement Network. 

This report includes some basic information about your business. (name, address, tax, or personal ID). And information about those who influence your business formation and direction. (full legal name, date of birth, residential address, and a copy of an ID).  

Who are considered the most influential people in the company? 

• Corporate officers
• LLC member-managers
• Anyone owning 25% shares or more of your company.

When is the deadline to submit the BOI report?

Generally speaking, you have 30 days after business registration to file your BOI report. Otherwise, you won’t be able to conduct business in the US. However,

• If you register your company before January 1, 2024, you have until January 1, 2025.
• If your company is registered on or after January 1, 2024, you must file it during the 30 days after formation. 

Note: Unlike state filings, your information on the BOI report cannot be on public record. 

Step 7: Open a Bank Account in the US

This step is very crucial. However, the challenge is that some banks require you to be physically present when opening a bank account. So, it might be necessary to take a trip to the United States. 

Prepare all the legal documents relating to your business. Go to the domestic bank of your choice to open a bank account.

Note: Beware that no registered agent can assist you in this step. To open a domestic bank account, you have to do it yourself. 

However, opening a business bank account does not typically have these challenges. After obtaining your EIN, many banks agree to open business bank accounts for non-US citizens. Those who don’t have a US SSN can undoubtedly open one. 

By opening a US business bank, you ensure your personal funds are separated from your business funds. It also can help protect your personal assets from litigation.

Step 8: Pay Up Taxes

After opening a business in Florida as a Canadian, it is time to pay the taxes. But how are taxes imposed on Canadian citizens working in the US?

What businesses pay taxes in Florida?

Only C-Corporations and LLCs with C-Corp status are subject to business taxes in Florida. Specifically, Florida corporate taxes.

S corporations, standard LLCs, partnerships, and sole proprietorships, however, are NOT subject to state business taxes. 

Tax obligation in Florida for Canadian business owners varies based on the type of business structure, the business conductions in the Florida region, etc. However, there are some general considerations and regulations:

State Taxes:

Luckily, you or your business are not subject to state income tax in Florida. However, you might be subject to other state-level taxes like sales, property, or corporate taxes on some types of businesses. 

Most goods and services in Florida have a flat sales tax of 6%. However, there are some exceptions:

• Retail sales of new mobile homes: 3%
• Amusement machine receipts: 4%
• Rental, lease, or license of commercial real property: 2%
• Electricity: 6.95%

To pay taxes on your sales in Florida, file Form DR-15. It should be based on your business’s sales volume.
How often you should pay taxes on your sales:

• Over $1,000: File and pay monthly.
• $501 to $1,000: File and pay quarterly.
• $101 to $500: File and pay semi-annually.
• $100 or less: File and pay annually.

Corporate Income/Franchise Tax: 

C-corporations and LLCs serving as a corporation are subject to corporate income/franchise tax. If your business’s annual revenue is more than $2,500, you must pay a 5.5% tax. To pay corporate income/franchise tax, submit Form F-1120 by the first day of the fifth month following the end of the tax year. The filing deadline for tax years ending on June 30 is October 1.

Florida Reemployment Tax 

You may be subject to reemployment tax if you hire employees for your Florida business. The money you pay for reemployment tax goes to the Unemployment Compensation Trust Fund. The Florida reemployment tax rate is 2.7% at the time. It is applicable to the first $7,000 paid to each employee in a year. 

To pay reemployment taxes, you must file Form-RT6 at the end of each month at the end of each quarter. Deadlines are different for each quarter:

• Quarter 1: April 30
• Quarter 2: July 31
• Quarter 3: October 31
• Quarter 4: January 31

If you need further information about the type of taxes you are subject to In Florida, the exact deadlines for each year, tax rates, etc, visit the Florida Department of Revenue.

Final Words

In this article, we tried to walk you through every step of opening a business in Florida as a Canadian. 

Florida is an ideal option for many companies longing to expand their business. You will have the chance to connect with the United States’ vast market—and, on another level, global markets! 

Florida’s business-friendly atmosphere makes it an excellent stage for business success. But it’s not all about business. Florida offers a high quality of life and has rich cultural aspects. 

Are you interested in setting up your own business in the United States? Let our team at
SAL Accounting handles your bookkeeping and accounting affairs while you focus on growing your business! 

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