Corporate Finance and Treasury

Managing corporate liquidity, financial risk management, managing foreign exchange

• By establishing an international business (IB) in British Columbia, a company can receive a full refund of the British Columbia taxes paid on the net income of the qualifying business (75% refund for patent income). 
• Companies can register a business or part of a business in the program. For income to qualify for the refund, one side of the transaction must be with a non-resident.
• The International Business Activity Act (IBAA), legislated by the Province of British Columbia in 2004, provides the legislative framework for the IB program.

Qualifying Activities

Managing Liquidity for Global Operations

• Dealing in short-term securities with a non-resident person or broker
• Collecting trade accounts receivable from non-residents, either affiliates or customers, for a non-resident
• Managing a portfolio for a Canadian affiliate that consists of investments in securities issued by a non-resident and not listed on a Canadian exchange
• Managing a portfolio consisting of foreign or Canadian investments to manage the  financial risk of a non-resident affiliate
• Leasing property to a non-resident by means of a direct finance lease

Managing Currency Risk and Exposure for the Corporate Enterprise

Factoring

• Accounts are receivable from a non-resident and purchased without recourse 

Accounts Receivable

• Collecting trade accounts receivable from non-residents, either affiliates or customers, for a non-resident

Administrative Services

• Administrative activities directly related to a financial activity of a non-resident 

Financial advice and research

• Providing financial advice to a non-resident (this excludes legal, accounting or tax advice provided by a corporation in the business of providing that advice)
• Preparing financial research for a non-resident (this excludes legal, accounting or tax research provided by a corporation in the business of providing that research)

Financial Risk Management

• Insuring or reinsuring prescribed risks related to non-resident persons or property situated outside Canada. Prescribed risks are those that fall within any class of insurance defined under the Insurance Act, except life, sickness or accident insurance. Captive insurance arrangements are eligible.

British Columbia's Competitive Advantages

• An ongoing supply of labour can be sourced from SFU’s Master’s in Financial Risk Management or Global Asset and Wealth Management programs and UBC's International MBA program.
• Vancouver offers an ample supply of financial professionals as shown here:
  
  

  Professional Designations in British Columbia	2009
  Certified General Accountants (CGA’s) and CGA students	14,000
  Certified Management Accountants (CMA’s) and CMA students	4,000
  Chartered Accountants (CA’s) and CA students	11,500
  Chartered Financial Analysts	1,054

  
  

• Individuals employed by a registered company (IB Specialists) may also qualify for a refund of up to 75% provincial income taxes for the first five years of employment.
• British Columbia’s taxes are competitive.
• The corporate tax rate was reduced to 10.5% in January 2010. The corporate tax rate will be reduced to 10% as of January 1, 2011.
• Canada will lower its corporate tax rate to 15% by 2012. The new rates are being phased in; the corporate tax rate is 18.0% as of January 1, 2010.
• The federal capital tax on large corporations was eliminated January 1, 2006—two years ahead of schedule.

Registering an IB

Further details on the IB program can be found in Bulletin IFA 001, International Financial Activity Overview.

The program is administered by the BC Ministry of Finance (formerly the BC Ministry of Small Business and Revenue). For more information regarding the legislation or provincial registration, please visit their website. The information on this website is provided for convenience and guidance only and is not a replacement for the legislation. Businesses considering accessing the benefits under the IBAA should consult with their professional advisors on the applicability of the legislation to their particular circumstance.

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