Today Canada is the seventh-largest economy. Many companies are owned by private entities, however, the government participate in the health-care system as well as supervises some services, such as public transportation and utility industries. The Canadian economy is quite diverse and quite well-developed.

The biggest part of the Canadian economy is international trade and export. Currently the U.S.A. is Canada’s biggest trade partner. In Canada international trade accounts for nearly 45% of the GDP, considering the fact that free trade agreements between Canada and the U.S. have dramatically increased trade by eliminating custom duties. Despite quite small size of its population, the Canadian economy is currently one of the most blossoming in the world.

Every of the country’s strategic industries are extremely well-developed. Even though the agricultural sector is small, it utilizes advantage of the Canada’s numerous natural resources scattered all around the country. Considering all that Canada is an attractive destination for global businessmen and corporations. Canadian flexible tax legislation provides room for utilization of the holding structures: the country hosts several big holdings.

ATCO group
ATCO group is a one of the biggest Canadian holding companies, having big net turnover and assets. Today this corporation employs almost 7 000 specialists of different professions. Holding’s subsidiary companies are diverse, but most of them are in either the gas / electricity or construction industries.

ATCO was founded in 1947, by S. Don Southern who gave a minority stake to his son Ron Southern, under the name Alberta Trailer Hire, renting fifteen utility trailers in the Calgary area.[3] As the company’s operations grew, they also began to sell trailers, first becoming the Alberta Trailer Company, then ATCO. By the early 1960s, the company had operations across North America and in Australia.

In 2004, with the deregulation of the retail energy industry in Alberta, ATCO sold the retail operations of ATCO Gas and ATCO Electric to Direct Energy Marketing Ltd.; ATCO Gas and ATCO Electric still operate as distributors (owning and operating the infrastructure that delivers natural gas or electricity in its service territories) but are no longer in the retail market. As part of the sale to DEML, DEML contracted call center and billing services from ATCO I-Tek.

DRI Capital
DRI Capital Inc. is a local Toronto-based Canadian healthcare royalty fund manager, a kind of private fund. Holding company’s scope of duties includes purchasing robust and predictable royalty streams from already existing pharmaceutical medicine, thus, providing constant profit to the investors.

The holding was established back in year 1992. During first year of conducting business activity it quickly went public on the Toronto Stock Exchange and acquired a royalty interest in the innovative British biotechnology development company.

Great-West Lifeco
Great-West Lifeco is mostly an insurance oriented Canadian holding company, operating on the territory of North America, Europe and Asia using 5 local subsidiaries around the world. Most of the businesses Great-West Lifeco has indirect control over are part of its largest subsidiary: The Great-West Life Assurance Company; the rest are supervised by the located in the United States subsidiary branch.

Onex Corporation
Onex Corporation is a private owned equity investment company and holding structure located not far from Toronto, Ontario, Canada. In year 2016, the company had estimated $22 billion worth of net assets under its management. The company is headquartered in the Brookfield Place, Toronto, with several branches in New York City, New Jersey, and London.

The firm invests in a wide array of industries. Onex Corporation previously has demonstrated a specific interest in acquiring equity shares of the high-cost manufacturing industry companies and subsequently turning them into cheap, low cost suppliers.

Manufacturing is the largest economic sector in the world, which is also one of the most important, directly and indirectly accounting for a large part of all economic activity and all jobs worldwide. It processes items and is dedicated to either creating new goods or adding value by producing finished goods for sale to customers or intermediate goods to be used in the production process. After the industrial revolution that began in Britain a few centuries ago, labour-intensive textile production was successfully replaced by mechanization and the use of fuel. Today, manufacturing creates jobs, technological development and an increase in international investment.

For this reason, some jurisdictions are leveraging manufacturing output and value-added exports to increase their operations, business performance and revenue, and to address the challenges and opportunities that manufacturers face every day in conducting their businesses.

According to Deloitte's 2016 Global Manufacturing Competitiveness Index, China, the United States, Germany, Japan and South Korea are ranked as the top five most competitive manufacturing countries in the world. These countries generate about 60% of global manufacturing GDP.

China
Canada and its provinces compete on a global scale for investments that result in low production costs, low wages for factory workers, and the adoption of globally popular product mandates. As a result, there are some significant trends in Chinese manufacturing that can easily be highlighted. These trends include creating a globally competitive, expansive manufacturing business model, helping to create a competitive business environment for manufacturing in China and increasing sales in domestic and overseas markets. This fact can encourage start-ups to grow, invest and compete with other successful manufacturing companies.

United States
The United States is successful in attracting investment in many of the world's most active industries, such as aerospace, auto assembly, pharmaceuticals, to name a few. The USA has signed an agreement with Germany to implement a dual vocational training program for the advanced manufacturing sector. US business policies focus primarily on technology transfer, sustainability, monetary control, and science and innovation, giving manufacturing companies (automotive in Detroit and high-tech in Silicon Valley) a competitive advantage.

Germany
Germany retains a relatively high share of manufacturing exports. The country provides long-term support in government-sponsored science labs and national programs created to foster manufacturing innovation in areas such as solar and wind power and renewable energy (renewable energy sources accounted for 28% of the country's electricity generation in 2014). In addition to an energy revolution in the manufacturing industry, the country is striving to phase out nuclear energy.

Japan
Japan has a technology-intensive manufacturing sector that dominates the global manufacturing landscape in most advanced economies. The country maintains manufacturing competitiveness as there is a close link between manufacturing competitiveness and innovation. Japan has strong potential to become one of the most advanced manufacturing jurisdictions in the world. The Robot Revolution Realization Council was established in the country in 2014 as part of the Japan Revitalization Plan, introducing infrastructure and energy resources for next-generation vehicles. Japanese companies account for 50% of the global factory robot market.

South Korea
As the world leader in the manufacture of liquid crystal displays (LCD), smartphones and memory chips, automobiles, and the world's largest shipbuilder, South Korea is actively pursuing growth in free trade agreements with more than 50 countries. The country invests heavily in education and produces a large number of researchers every year. It is also known that supporting manufacturing innovation in South Korea with venture capital investments to boost high-tech startups is identified as a strategic priority.

Material matters are becoming increasingly difficult for tax purposes in Europe and globally, therefore some clients may prefer a stronger physical presence at the place of exercise than virtual office services. One of the possible strategies for increasing substance is the establishment of a functional office. Content issues usually arise when local tax authorities require confirmation that the company's operations are taking place in the country where the company is registered: they want to see that commercial activity actually exists in the specified jurisdiction.

A company of substance is a company abroad that resembles a classic “offshore” company but has what is called “substance” (presence), i.e. a business, in other words – an administrative office. It's more like a real local company but has ties to the onshore business.

For more and more entrepreneurs, the economic substance of their company is becoming too much for them. Creating economic substance has become quite the gamble as tax authorities, banks and government institutions delve ever deeper into the two main questions: 'Where is the real place of governance and control of the company?' and 'Who is the beneficial owner?'

Confidus Solutions can offer Substance Office in various jurisdictions worldwide including numerous famous offshore jurisdictions. However, considering the complexity and efficiency of content delivery, we would strongly recommend considering the following jurisdictions as your first choice: Latvia, Cyprus, Lithuania and Hungary - as we can offer more advanced services in these states instead of just a virtual office, as well more solid reasons to believe that the company operates in the specific location. The question of the actual place of management and control of the company has recently become not only for tax authorities, but also for business partners, suppliers, banks and opponents due to the implementation of interstate tax legislation and the rapid development of international trade and online trade of crucial importance.

Top selection:

Administrative office in Cyprus
Administrative office in Latvia
Administrative office in Bulgaria
Importance of economic substance
Establishing economic substance in a registered jurisdiction can be critical to verification by local tax authorities. However, the process of creating substance must be carefully evaluated beforehand, as under certain conditions it can run counter to your initial goals and business structure. The substance needs to be addressed in order to avoid a higher tax burden on your business and to avoid major tax disputes with your tax authority.

Corporations have relied on “offshore” or non-resident structures for many years to reduce or defer taxes and improve returns for investors. This is particularly popular with private equity and real estate structures. But increasingly, and particularly within the EU, tax authorities are demanding more if the reason for tax non-resident status and/or local tax exemption is to be given. Usually "more" is interpreted as having more substance and physical presence in the indicated jurisdiction.

Today there are still many structures that are set up in such a way that there is what is known as double non-taxation, meaning that there is no effective tax levied in either country on the total proceeds generated within the structure. The primary goal is to prevent the granting of treaty benefits to international corporate structures that are only geared to the advantageous conditions of the applicable double tax treaty.

When there is an advantage in having a substance
Having substance is an advantage if you are contemplating the formation of an offshore or onshore entity and want the highest possible protection in terms of recognition by international and local tax authorities. To avoid problems, your international corporate structure must be set up as an actual and "real" corporate structure.

Based on the actual role the company plays in your worldwide structure, there must be a relevant level of "real" activity. In practice, this means, for example, that the registered office of the company should not be the same as that of hundreds of other companies and the director of the company should not be the director of hundreds of other companies at the same time. That means your company address should at least be unique and the managing director should have a real function in the company.

The main function of a trust is to manage assets on behalf of their owner for the benefit of the beneficiaries. For this purpose, a trust may choose any activities it deems effective and advantageous, unless the relevant contract specifies otherwise. Some of the functions of a trust include:

Managing finances
Managing investments
Paying bills
Accounting
Preparing financial reports
Distributing profits
In addition, a trust can perform almost any other management function specified by the contract. Depending on the particular case, they may also offer financial planning, tax optimisation schemes and similar services.

Trusts can be useful to anyone who possesses considerable assets. Trusts are usually set up to secure assets and property and to optimise taxation. They also have inheritance applications: assets held in trust do not require probate as they are no longer part of the settlor’s estate, and so are unaffected by the contents of his/her will.