Korean companies participating in projects in Canada are increasingly seeking guidance on obtaining a Canadian Business Number, commonly referred to as a BN. This has become particularly common following LG Energy Solution’s expansion into Ontario, as Korean suppliers and contractors prepare the insurance, immigration, tax, and administrative documents required by Canadian customers and prime contractors.
Common questions include:
“Can a Korean company register for a Canadian Business Number?”
“Can we obtain a BN without establishing a Canadian subsidiary or branch?”
“Our Canadian customer requires a local business number before our Korean employees travel to Canada.”
“We have been told that a BN is required for insurance, a Certificate of Insurance, or immigration-related documentation. How should we proceed?”
A Canadian BN is a unique nine-digit number used to identify a business or legal entity in its dealings with the Canada Revenue Agency and certain other government programs. A Korean company does not necessarily need to establish a Canadian subsidiary or branch before obtaining one. Depending on its activities and registration requirements, it may apply as a non-resident business.
Canadian BN Registration for Korean Companies
A Korean company may be able to obtain a Canadian BN without separately establishing a Canadian subsidiary or branch, provided that the applicable requirements are met. This is commonly necessary when a Canadian customer or prime contractor requests a local business number, or when the company needs to prepare a Certificate of Insurance, Canadian insurance coverage, or immigration-related documentation.
Many of Hanbridge Partners’ corporate clients are suppliers participating in LG-related projects. Following LG Energy Solution’s expansion into Ontario, Korean suppliers involved in those projects have also been required to prepare Canadian business registration, insurance, and tax-related documentation.
Under the standard process, companies often expect BN registration to take approximately one month. Where a project schedule is particularly urgent, however, expedited processing may be available. In the LG supplier matters handled by Hanbridge Partners, many BNs were issued on the same day.
Key Company Information Registered under a BN
A Canadian BN generally consists of nine digits. During the registration process, the Korean company’s home-country information and the corporate details required for Canadian registration must be organized and submitted.
Information recorded in the CRA system may include the company’s country of incorporation, Korean business registration number, date of incorporation or registration in Korea, business activities, address, and contact details.
If the company’s information is entered incorrectly at this stage, unnecessary amendments may be required later when arranging a Certificate of Insurance, obtaining insurance coverage, filing tax returns, or submitting documents requested by a prime contractor.
BN registration should therefore be viewed not merely as the process of obtaining a number, but as the process of establishing the company’s registered information for its Canadian project activities.
CRA Registration Information for a Korean Corporation
Local Requirements after BN Registration
After obtaining a BN, the company generally proceeds with the additional requirements imposed by the Canadian customer or prime contractor. Hanbridge Partners’ clients have submitted their BNs and satisfied local legal and practical requirements, including Certificates of Insurance, before commencing their Canadian projects.
For Canadian projects, a BN is often connected to insurance arrangements, contract submissions, and documentation required before personnel can begin work at a project site. This may be particularly relevant where Korean employees travel to Canada to perform on-site work or where the Korean company has a direct contractual relationship with a Canadian customer.
Obtaining a BN, however, does not complete the company’s Canadian compliance review. The CRA may also consider whether a foreign company registered in Canada has income arising from Canadian activities and whether related tax returns or payments may be required.
The Canadian tax implications should therefore be reviewed together with the BN registration process.
CRA Registration and Tax Considerations
When a Korean company registers to conduct business in Canada, the CRA may treat the company as potentially subject to reporting and tax obligations in respect of income earned from Canadian activities. From the CRA’s perspective, a foreign company registered in Canada may become subject to ongoing tax administration.
If income that has already been taxed, or is expected to be taxed, in Korea is also taxed in Canada, a double-taxation issue may arise. Where the relevant requirements are satisfied, the company may consider applying for tax relief based on the Canada–Korea Income Tax Convention.
If the applicable relief is approved, it may be possible, depending on the facts, for a company registered in Canada to operate without incurring Canadian income tax on the relevant business income.
The appropriate treatment will depend on factors such as the company’s contractual arrangements, scope of work in Canada, and nature of the income. Companies should therefore consult an accountant or attorney experienced in international tax matters before proceeding.
How Hanbridge Partners Can Help
Hanbridge Partners is a cross-border advisory firm established by professionals with nearly 20 years of experience in international tax and accounting matters involving companies in the United States, Korea, and Europe, together with legal professionals. During the firm’s early years, its professionals also reviewed and supervised the work of accountants in multiple jurisdictions for a global tax platform company headquartered near Silicon Valley.
Requests relating to overseas expansion increased rapidly from the second half of 2024, with Canadian matters particularly concentrated in November and December. Canadian BN registration became one of the services most frequently requested by companies participating in overseas projects.
Hanbridge Partners has assisted Korean suppliers involved in LG Energy Solution’s Ontario projects with BN registration, local requirements such as Certificates of Insurance, and related CRA tax reviews. For urgent projects, we have completed numerous same-day BN registrations and organized Korean corporate information in accordance with the submission requirements of Canadian customers and prime contractors.
Key Takeaways
A Canadian BN is not limited to companies that have established a Canadian subsidiary or branch. A Korean company may be able to register with the CRA as a foreign company and obtain a BN, making it an important starting point for satisfying insurance, Certificate of Insurance, immigration, and contractual requirements for a Canadian project.
After the BN is issued, however, the company may also need to review reporting and tax obligations relating to income earned in Canada. The potential availability of relief under the Canada–Korea Income Tax Convention should also be considered.
For this reason, companies should not focus solely on obtaining the number. They should also consider the tax and compliance structure that will apply after registration. A Korean company asked by a Canadian customer or prime contractor to provide a BN should review the registration process and related CRA tax considerations at an early stage of the project.