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Part 1: What Does the Market Look Like?

Today, expanding your business is more a matter of when, not if. With businesses popping up, markets expanding, and industries growing in all areas around the world, occupying as much of your respective market as possible is critical to your long-term success.

With that in mind, expanding your business domestically is one way to go about it. Or, if you have the right strategy and have chosen the right region, international business expansion might be an even smarter move.

Throughout the last number of months, we’ve written several articles regarding international business expansion across several different regions in the world. From Latin America and Europe to Africa and the Middle East, it’s clear to see that now is, perhaps, one of the best times in recent memory to pursue international business expansion. With so many markets emerging as significant players on the global stage, it seems that it would be difficult not to achieve sustainable success. Again, it all comes down to the strategy.

If you're a business owner, an entrepreuner, or an investor with dreams of dipping your toes into an international market then it's time to take advantages of the world of opportunity awaiting you in the hidden gem of Canada.

Now, you might be thinking, “Why expand into Canada when I can simply go a few hours south of the border and break out into the US markets?” In short, there’s something that the Canadian markets offer that the US doesn’t. But we’ll explore those details later on in this 3-part series.

First, we’ll look at the current market condition within Canada. In other words – what does the market look like? From there, we’ll move into the potentialities of expansion and the possible benefits you could open yourself up to, should you decide to expand internationally into Canada. Finally, we’ll close with the possible challenges that could disrupt your international business expansion plans.

With that said, let’s get into the first part of this intensive, 3-part series—what does the market look like?

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The Market at a Glance

Like elsewhere in the world, Canada has been impacted by the COVID-19 pandemic, including lockdowns, shutdowns, and quarantining. However, with a strong mitigation strategy in place, the country is beginning to recover — some would say quite rapidly.

In terms of the market, it’s been considered a “startup mecca,” the likes of which could potentially rival the massive Silicon Valley of the US. In fact, Canada offers one of the most robust technology industries in the entire world, placing a strong focus on advanced technologies like AI, machine learning, AR, and VR technology. The country even ranked amongst the top 3 in US News’ 2020 rankings of the best countries for business according to bdaily.co.uk.

Success like that doesn’t happen by accident—it happens by design. The Canadian government has made a concerted effort to ramp up its technology industry in recent years under the leadership of Prime Minister, Justin Trudeau. The country has worked to develop technology hubs in a number of different Canadian cities, drawing talent from all over the world to work for its startups, think tanks, research and innovation firms, and more.

The market within Canada is still developing, but it’s doing so at a rapid pace. Even though it’s a fairly small country, Canada is ranked amongst the world’s top-10 economies. Even during the devastating 2008 world financial crisis, Canada seemed to come out of it unscathed, further proving just how strong and durable the Canadian economy is. In terms of international business expansion, this is exactly what you’d want to look for—a robust economy that can make it through devastating financial events, whether it be a global pandemic or a housing market collapse and subsequent financial crisis.

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What This Means for You

As an entrepreneur, a business owner, or an investor considering expansion, nothing is more important than doing research into the region. When it comes to Canada, the writing is on the wall—it offers a tech-rich and robust economy that is rife with opportunity for a business looking to take advantage of this growing market. With major trade agreements with different countries from around the world, a shared border with one of the largest markets in the world (the US), and easy jump-off points to Europe, Latin America, and places beyond, Canada offers a prime opportunity for businesses interested in international expansion. But opportunities and benefits are one thing. It’s something else entirely to have the right strategy in place that allows you to turn opportunities and benefits into something real.

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Part 2: The Potentialities of Expansion

In this section, we’ll outline some of the major benefits that could potentially push your business closer to sustainable success, should you choose to expand into Canada. Remember, Canada is a nation poised for growth. It came out of the 2008 global financial crisis unscathed, and it’s recovering faster than many other countries in the wake of the COVID-19 pandemic. And not only that, but its massive technology industry is even giving Silicon Valley a run for its money.

Keeping this in mind, it’s important to understand how the current makeup of the Canadian market can determine just how much growth potential you can achieve once you’re able to establish your international operations. So, let’s begin to dive deep into the potential benefits that you could take advantage of once you expand your business into Canada.

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Canada’s Favorable Business Climate Is Undeniable

Arguably the most significant benefit that comes with expanding into Canada is its favorable business climate. According to bdaily.co.uk, “Canada is consistently ranked among the top 15% places in the world where it is the easiest to do business, boasting a particularly impressive score when it comes to starting a business. This is in no small part thanks to its low corporate tax rate of just 15%, and the support offered to SMEs. There is a range of government grants and loans available, with initiatives like FedDev Ontario and the Industrial Research Assistance Program also providing mentorship and entrepreneurial support.” The country also offers foreign business owners a fast and straightforward Startup Visa Program, designed to bring entrepreneurs into the country sooner.

One cannot overstate just how critically important the lower corporate tax rate and the easy entry points for startups are when it comes to establishing an international presence in Canada. As any business owner knows, expanding into a new market is challenging enough. But when you have an international government welcome you with open arms in the form of startup funding, an easy visa process, and a friendly tax rate, what more could you ask for?

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Canada Will Seem Familiar to UK and US-Based Businesses

Another significant benefit for businesses expanding into Canada is its familiarity to UK- and US-based businesses. As we’ve discussed throughout many of our articles, business expansion always comes with challenges, no matter if you’re expanding domestically or internationally. However, some regions are more challenging to navigate than others.

One of the most significant factors that genuinely sets Canada apart on the international stage is that it operates reasonably similarly when compared to the UK or the US. For instance, bdaily.co.uk says, “The most common business greeting is also a handshake, unlike in Japan, where business persons typically bow instead. Meanwhile, the country’s legal system is based around British common law traditions. English is one of the country’s two official languages, spoken by over 85% of the population.” As you can see, the similarities range from small things such as greeting one another, to the lack of a potential language barrier, which should make your transition much, much easier.

Canada’s Quality of Life Is One of a Kind

While this one might not necessarily be business-related, it’ll undoubtedly impact your business one way or another.

Canada’s way of life is not only enjoyable, but it’s unique—something that’s truly set apart on the global stage. Canadians are happy with their lives, and much of that is due to the low crime rate, government benefits, and so much more.

This can be an indirect benefit that could potentially impact everything from your workplace culture to the partnerships that you form.

What Does It All Mean?

Clearly, Canada offers critical benefits that could help ensure that your international business expansion is nothing short of exceptional. However, no business expansion strategy comes without challenges—both big and small. Business expansion into Canada is no exception. There are some challenges that you should be aware of. While none of them is detrimental to your expansion efforts, they should certainly be considered as you continue your due diligence.

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Part 3: The Challenges of Expansion

It’s important to pay special attention to the various challenges that could arise when expanding into Canada. Remember, every business owner, leader, or investor charged with designing an expansion strategy will become well aware of the fact that challenges are merely inevitable — it’s how you plan for and respond to challenges that make the difference.

Expanding into Canada will undoubtedly bring about some potential challenges that all business owners and leaders need to be aware of moving forward. And, while none of these challenges is a game-breaker, they’re critically important to your overall international business expansion strategy. As you continue to conduct your due diligence planning, you’ll want to take these challenges into account so that you can ensure that you hit the ground running when you’re ready to launch your business.

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Canada Is Competitive

Even though Canada isn’t one of the largest market in the world, it’s undoubtedly one of the more prosperous regions, and that says a lot.

Startupoverseas.co.uk says, “The Canadian market can be very competitive. If you are starting a business in Canada, make sure your market research is accurate and up-to-date.” Of course, that should go without saying, but it’s critically important in Canada.

Remember, we mentioned in the first article of this series that Canada has worked hard to build up its technology industry. Today, that industry can rival Silicon Valley. With that in mind, understanding the market, knowing your competition, and foreseeing the potential risk within the technology industry in Canada is imperative. You see, you won’t just be competing with Canadian businesses, you’ll be competing with Silicon Valley, too.

Keep an Eye on the US

Canada and the US are neighbors. And while they’ve been cooperating neighbors throughout most of their history together, it’s clear to see that the US does maintain a geographic monopoly in a number of different industries, which could ultimately hinder your potential for growth in the short-term and long-term future.

Again, this will come down to your market research. When conducting research, be sure to view not only the Canadian competition but the US competition as well. You might find that many US businesses sell to customers in Canada, ultimately taking part of your target audience away from you. If you go into your expansion blindly, you could be in for a rude awakening when you find yourself fighting for customers who have already been bought and sold by US businesses.

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Setting Up an International Business Is a Challenge

It’s important to remember that setting up an international business is a challenge in and of itself. For that very reason, we always recommend looking into all your options before beginning your expansion research.

For instance, partnering with a Global PEO in Canada might be the right way for you to go about your business expansion strategy. If you aren’t already familiar with a Global PEO, we’ll fill you in. Essentially, a Global PEO is a company that serves as the Employer of Record on your behalf within a host country. They hire employees on their payroll, but these employees work for you. Not only does this take the stress of hiring, recruiting, and onboarding off of your shoulders, but it also takes payroll, benefits administration, and liability claims off of your shoulders.

And that’s not the only thing that a Global PEO can do. In addition to serving as your Employer of Record and managing all your HR-related needs, your PEO will help you navigate local and regional tax law and compliance requirements, virtually giving you an easy in to a new market.

From there, you’ll quickly see just how easy it can be for you to test the waters in the Canadian market because working with a PEO means you don’t have to incorporate in Canada formally. If things don’t work out the way you’ve planned, you can prepare your exit strategy and jump ship, knowing that you don’t employ your employees—your PEO does.

Again, you don’t have to go this route, but it’s always an excellent option to have in your back pocket if you’re a bit apprehensive regarding your international business expansion strategy.

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What It All Means

As you can see, none of these challenges are gamebreakers when it comes to expanding into Canada. But that doesn’t mean you shouldn’t give them the attention they deserve.

Now, it’s time to take your improved understanding of why expanding into Canada would be a wise move—and act on it.

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