Doing Business in Canada

Transcription

1 Doing Business in Canada George Hoffman SVP, International Banking, PNC (Moderator) Presented to: New York Cash Exchange Nathalie Niedoba Consul and Head of Investment Consulate General of Canada in New York Daniel Uzjco International Trade and Customs Attorney, Dickinson-Wright PLLC June 2, 2016

2 Doing Business In Canada NY Cash Exchange 2016, June 2 nd, 2016 PENSEZ CANADA Janvier 2013

3 Doing Business in Canada 1. The Trade Commissioner Service 2. Overview of Canada 3. New York-Canada Bilateral Trade Relations 4. Invest in Canada 5. Sectors of interest 6. Q&A 3

4 Trade Commissioner Service (TCS) Comprehensive Network of International Trade Professionals +150 Cities Worldwide, 10 Offices across Canada Promotes Canada s Economic Interests in the Global Market Our Service Areas: Exports International Investments Seeking Technology and Capital Instigating R&D partnerships Our Clients: Growing, Canada-based Companies Seeking Business Abroad US Companies Seeking Expansion into Canada 4

5 TCS Tech Accelerators Digital Tech (New York City) Targets high potential companies in AdTech, Data Analytics, FinTech, e-commerce, SaaS Selected companies receive space at a local co-working facility CleanTech (virtual) Targets companies in green chemistry and advanced materials; energy/water data, analysis, management & control; clean energy; clean transportation and mobility, clean web, consumer engagement and smart grid. Supporting companies connect to growth scaling opportunities in NYC and Silicon valley Health IT (Philadelphia) Connecting Canadian SME to US healthcare providers (hospitals, insurers, research centers, medical companies) Companies focus on patient-centered solutions using HealthIT including mhealth and telemedicine (ehealth) Completions to Date: 72 Digital Tech, 38 Health IT, and 46 CleanTech companies $30.2M in capital raised 123 new strategic partners identified 107 new jobs 5

6 Overview of Canada Demographics and Geography Population: 35.5 Million 81% Urban;19% Rural 75% of Canadians live within 100 miles of the US Border English and French Official Languages 3,855,101 square miles 2nd Largest Country in the World Economy Rich in Natural Resources (Oil & Gas, Agriculture, Forestry, Mining) Strong Basis for the Financial Manufacturing and Tech Sectors 6

7 New York-Canada Bilateral Trade Relations Canada is New York s Largest Trade Partner In 2015, New York and Canada shared $ 30.4 Billion in Traded Goods New York Exports $12.4 Billion to Canada Annually New York Imports $18.0 Billion from Canada Annually Exports by Industry Imports by Industry Minerals & Metals (34%) Minerals & Metals (19%) Energy (20%) Equipment & Machinery (18%) Agriculture (8%) Forest Products (7%) Chemicals (6%) Other (38%) Equipment & Machinery (9%) Agriculture (9%) Forest Products (8%) Chemicals (4%) Other (16%) 7

8 New York-Canada Bilateral Trade Relations 680,900 Jobs in New York Depend on Trade & Investment with Canada

9 Why Invest in Canada? 9

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14 Federal SR&ED Tax Credit Tax Incentive for the Costs of Performing Eligible R&D work in Canada, including: Experimental Development Applied Research Basic Research Support Work (Engineering, Design, Operations Research, Mathematical Analysis, Computer Programming, Data Collection, Testing, Psychological Research, etc.) Eligible SR&ED Expenses include: Salaries or Wages of Employees directly engaged in R&D Materials Overhead Contract Expenditures (80% of the amount of arm s length contracts) Eligible SR&ED projects must: Conduct a Systematic Investigation or Search Involve Scientific or Technological Uncertainty Result in Scientific or Technological Advancement 14

15 Why NY Companies Should Think Canada Best Investment Sectors Finance & Business Services CleanTech and Renewable Energy Advanced Materials & Manufacturing 15

16 Questions? Nathalie Niedoba Trade Commissioner (Investment) (212) Consulate General of Canada in New York

17 Doing Business in Canada Before, During, and Beyond the Border New York Cash Exchange 2016 Copyright 2015 Dickinson Wright PLLC. Copyright 2015 Dickinson Wright LLP.

18 DISCLAIMER The materials contained in this presentation, related handouts, and event website do not constitute legal or tax advice, and contact with this presentation, handouts, event website or any of the attorneys in Dickinson Wright PLLC or Dickinson Wright LLP does not establish an attorney/solicitor-client relationship. In the event that you wish to contact us, via or any other means, you should not transmit any confidential information to us until an attorney/solicitor-client relationship is established. Any information sent to us before an attorney/solicitor-client relationship is established will not be considered confidential by us, and addresses of our attorneys are not provided as a means for prospective clients to contact our firm or to submit information to us. Please consult with a lawyer, accountant, and insurance professional before making your business decisions.

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20 Canada is Not the 51 st State

21 But Are These States in Canada?

22 Similar But Not the Same Federal / Provincial Relations Inter-provincial differences (Quebec, East / West divide) Intra-provincial differences Role of bureacrats / regulatory officers Cultural elements (Francophonie, Labor and Employment issues, etc.)

23 A Few Words About NAFTA The North American Free Trade Agreement is a regional trade agreement between Canada, the US, and Mexico. Free Trade in Goods and Services between the Member Countries through the reduction of tariffs and elimination of NTBs Facilitates Direct and Indirect Investment into the countries Protections for fair and non-discriminatory treatment Dispute resolution mechanism private investor v. governments THE NAFTA ESSENTIALLY GUARANTEES THAT YOU WILL BE TREATED JUST LIKE A DOMESTIC COMPANY FREE TRADE DOES NOT MEAN TAX FREE TRADE

24 Before the Border

25 BEFORE INTELLECTUAL PROPERTY DISTRIBUTION CHANNELS (sales agents, distributors, licensing, franchising) EXPORT CONTRACT / POs TAXES CORPORATE STRUCTURING

26 AT THE BORDER

27 at CUSTOMS COUNTRY OF ORIGIN vs. MARKING EXPORT CONTROLS e.g., CUBA, IRAN BUSINESS IMMIGRATION

28 Beyond the Border

29 Banking in Canada George Hoffman

30 Challenges of International Cash Management Treasury Structures Local Practices Payments Collections Liquidity Risks Controls and Visibility Regulation 30

31 Canadian Banking Environment Number of Banks in Canada: 84 (28 domestic) vs 5,636 in the US Number of Foreign Banks Operating in Canada: 24 (including PNC) Well-capitalized; very stable; conservative Strong branch presence coast-to-coast, but limited presence in the US 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 Total Assets (Source: SNL) 31

32 Financial Challenges of Managing a N. American Business (Treasury Management perspective) Many similarities: Online banking, accounts, lockbox, ACH/EFT, wire. Electronic payments growing, check (cheque) still important in corporate space Differences: Canadian Payments Association Rules (Cheque, ACH, Wire) Taxes on banking services Image Cash Letter/Remote Deposit Mobile banking, alerts, reporting Complexities of managing a business across multiple borders: Cross border funding and repatriating money Cross border payments and collections Local payables, receivables, currency exposure associated with operating expenses and payroll Risk management, rules and regulations, foreign currency exposure Access to working capital and managing different interest rates Tax payments Best Practice: Understanding the similarities and recognizing the differences in banking services, regulations and market risks to impact your bottom line appropriately 32

33 Canadian Dollar Market Update * During 2015, the Canadian dollar (CAD) weakened 17% in response to lower oil prices. This marked its longest downturn since it became a floating currency in The Canadian dollar reached an almost 13-year low in mid-january, but started to stabilize after the central bank meeting. The Bank of Canada (BOC) reduced its benchmark interest rate twice last year. As of March 2016; updated information will distributed at the event. 33

34 Bank Account/Relationship Best Practices Considerations Options Complexity Managing multiple bank relationships Local borrowing needs Centralized vs. local treasury Resident vs. non-resident Receivables, payables and information risk Risk assessment Costs Local account with Canadian Bank (e.g. BMO, CIBC, PNC Canada.) vs. Multicurrency account (e.g. Canadian Dollar MCA) vs. Use of US account (e.g. USD payments, receipts and FX for CAD) Best Practice: Banks have an important role here in providing tools for enhanced visibility, better decision-making and increased control. 34

35 AFP Country Profiles 35

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37 Disclosures PNC, PNC Bank and PINACLE are registered marks of The PNC Financial Services Group, Inc. ( PNC ). In Canada, PNC Bank Canada Branch, the Canadian branch of PNC Bank, National Association, provides bank deposit, treasury management, lending (including asset-based lending through its Business Credit division) and leasing products and services. Deposits with PNC Bank Canada Branch are not insured by the Canada Deposit Insurance Corporation. Deposits with PNC Bank Canada Branch are not insured by the Federal Deposit Insurance Corporation, nor are they guaranteed by the United States Government or any agency thereof. Lending and leasing products and services, as well as certain other banking products and services, may require credit approval. PNC Bank Canada Branch does not provide legal, tax or accounting advice The PNC Financial Services Group, Inc. All rights reserved. 37