Buying a Business in the USA as a Canadian

When buying a business in the USA as a Canadian, a local foreign exchange specialist like MTFX can help you save on international business money transfers.

Expanding your business beyond Canadian borders is a significant step that can open up new avenues for growth and profitability. The United States is a prime destination for Canadian companies looking to scale their operations in various international markets. With its proximity, large consumer base, and economic ties, doing business in the US from Canada offers numerous advantages, making it an attractive market for Canadian businesses. In this blog, we'll look at the benefits of doing business in the US as a Canadian company and how business global payments can help you make the money transfer process easier for you.

Can a Canadian own a business in the US?

Yes, a Canadian can own a business in the United States, but ownership and immigration status are two separate considerations. Canadians are allowed to buy, start, and operate US businesses as foreign owners, provided the structure and legal requirements are properly set up. However, owning a business does not automatically grant the right to live or work in the US, which is where visa planning becomes critical.

Below is a clear breakdown of what Canadians need to know when looking to buy a business in the USA or pursue a cross-border business purchase.

• Ownership is allowed, immigration is separate: A Canadian can own shares or assets of a US company without being a US resident. However, if you plan to actively manage the business while living in the US, you will need an appropriate visa. This distinction is often misunderstood and is one of the most important legal considerations when a Canadian buys a business in the US.
   
• Visa pathways tied to business ownership: Canadians commonly pursue business ownership through the E-2 Treaty Investor visa or the EB-5 Immigrant Investor Program, depending on investment size and long-term goals. These options fall under broader Canada to US visa options and determine whether a Canadian citizen can operate the business from within the US.
   
• Buying an existing business vs starting one: Many Canadians prefer purchasing an established operation rather than starting from scratch, especially when buying a small business in Canada or exploring options abroad. Buying an existing business often means immediate cash flow, an established brand, existing customers, and proven supply chains. This approach appeals to Canadians, asking whether they can buy a business in the USA rather than build one from the ground up.
   
• Legal requirements for Canadians buying a US business: A cross-border business purchase involves more than signing a sales agreement. Canadians must navigate entity formation, contracts, due diligence, escrow arrangements, and compliance with both US federal and state laws. Understanding the legal requirements for Canadians buying a US business early helps avoid costly delays and structural mistakes.
   
• Financial and foreign exchange considerations: Buying a US business means moving large sums of money across borders, often under tight timelines. Currency fluctuations and international transfer fees can directly impact your purchase price and ongoing operating costs. This makes financial planning and FX management essential for Canadians involved in a US business acquisition.

Is it worth buying a business in the US as a Canadian?

Expanding your business into the United States can be strategic for Canadians looking to grow and diversify their operations. With its vast consumer base, robust economy, and favourable trade relations with Canada, the US market presents many opportunities for Canadian businesses.

Proximity to the US market

One of the critical advantages for Canadian businesses operating in the US is the geographical proximity. Logistics, transportation, and cross-border trade are more manageable and cost-effective with a shared border. This proximity also allows for easier operations management and quicker response times to market demands. Furthermore, you can get good CAD to USD rates when sending money to the US from Canada.

Access to a larger customer base

The US is one of the largest consumer markets in the world, offering Canadian businesses access to a significantly more significant customer base. Expanding into the US allows companies to reach millions of potential customers, which can lead to increased sales and revenue growth.

Diverse market opportunities

The US market is highly diverse, offering various opportunities across various sectors. Whether your business is in technology, manufacturing, retail, or services, the US provides numerous avenues for growth and expansion. This diversity also allows Canadian companies to tap into niche markets and customize their offerings for different regions.

Favourable trade agreements

Canada and the US have a strong trade relationship, bolstered by agreements like the United States-Mexico-Canada Agreement (USMCA). These agreements reduce trade barriers, such as tariffs and quotas, making it easier and more cost-effective for Canadian businesses to operate in the US. The regulatory alignment between the two countries also simplifies cross-border trade. This is why, you can get competitive CAD to USD rates if you want to transfer money for your business.

Strong economic ties

The US and Canada have one of the most robust economic partnerships in the world. This solid economic relationship provides stability and confidence for Canadian businesses looking to enter the US market. The integrated supply chains between the two countries also enhance business efficiency and reduce operational costs.

Innovation and technology adoption

The US is a global leader in innovation and technology, providing Canadian businesses access to cutting-edge technologies and industry trends. By operating in the US, Canadian companies can leverage this environment to enhance their competitiveness, develop new products, and adopt the latest technological advancements.

Ease of doing business

The US consistently ranks high in global ease of doing business indexes, making it an attractive destination for Canadian companies. The country offers a transparent regulatory environment, a well-established legal system, and strong protection for intellectual property, all contributing to a business-friendly climate.

Potential for partnerships and collaborations

The US offers numerous opportunities for partnerships and collaborations, whether with American companies, research institutions, or industry organizations. These partnerships can lead to shared resources, increased market reach, and innovative solutions that benefit Canadian and US businesses.

Access to talent and skilled labour

The US has a vast pool of skilled labour and talent across various industries. Canadian businesses operating in the US can use this talent to drive innovation, improve operations, and maintain a competitive edge in the market. Access to a diverse workforce also supports growth and expansion strategies.

Steps to buying a business in the US as a Canadian

Buying a business in the US as a Canadian comes with many variables, but there are basic steps any firm can follow.

Step 1: Explore the best states to buy a business in the US

Corporate acquisitions in the US are appealing because of business-friendly laws and regulations. Some of the best states to buy a business in the US include:

• California: The Golden State has the most significant state economy and GDP among US states.
• Texas: The Lone Star State is one of the least expensive states to run a business and has friendly corporate tax laws.
• Colorado: The Centennial State, or "Colourful Colorado," offers a business-friendly environment and a thriving entrepreneurial community.
• Florida: Buying a business in the Sunshine State, or exploring businesses for sale in Florida, comes with tax benefits and a robust labour force.
• North Carolina: The Tar Heel State has low corporate and property tax rates and a favourable business climate.

There are 50 states in America plus Washington, DC, so plenty of options exist. In addition, there are many factors to consider when choosing which state to register your business. The list includes tax laws, business regulations, workforce, cost of doing business, infrastructure, and access to capital.

Step 2: Do your research about investing in the US as a Canadian

You need to do thorough research on the cross-border business setup process. Not to mention, any corporate acquisition requires intensive research, especially for cross-border deals where you may be unfamiliar with the target company's country.

Areas to focus on include laws and regulations, market potential, buying processes, the best way to manage the business, whether you want a limited liability company (LLC) or a corporation, and more. The good news is that the internet can help you make an informed decision as a foreigner buying a business in the US.

Step 3: Work with reputable experts

Working with reputable experts to minimize risks to your capital investment is essential. For example, experienced business and immigration lawyers can help you find the perfect ready-made business in the United States that suits your requirements.

They can also provide legal support regarding buying and auditing the business, applying for the right immigration visa program, and ensuring your business is compliant. You may also benefit from professional assistance from an experienced accountant, real estate broker, and tax attorney.

Step 4: Find the best currency exchange service

Making international payments can be complicated when buying a business in America, while in Canada. The best way to simplify overseas transfers is to use a specialist international payment provider, such as MTFX.

This is a more affordable option than making international transfers through business bank accounts, and it also comes with many value-added services.

Legal requirements for Canadians buying a US business

Buying a business in the United States as a Canadian involves navigating both US and Canadian legal frameworks, requiring a robust strategy to address the unique challenges of cross-border transactions. While the process is well established, cross-border transactions introduce additional layers of compliance that must be addressed before a deal is finalized.

• Choosing the right legal structure: Canadians typically purchase a US business through an LLC or corporation, depending on liability, tax exposure, and long-term plans. The structure affects compliance, reporting, and how profits are distributed.
   
• Business registration and state compliance: Each US state has its own registration, licensing, and reporting rules. Canadians must ensure the business is properly registered and authorized to operate in the state where it is located.
   
• Due diligence and contract review: A cross-border business purchase requires careful review of financials, contracts, liabilities, and operational risks. Legal due diligence helps confirm what is being acquired and protects against undisclosed issues.
   
• Federal and state regulatory obligations: Some industries require additional approvals or permits at the federal or state level. Canadians must confirm that the business complies with all sector-specific regulations before closing.
   
• Immigration and ownership alignment: While a Canadian can own a US business, legal planning must align ownership with immigration status if the buyer plans to manage the business on the ground.
   
• Cross-border documentation and reporting: Canadians may face ongoing reporting obligations in both countries after the purchase. Proper legal guidance ensures compliance with disclosure and record-keeping requirements.

Where should you incorporate your business in the US?

Choosing the right state to incorporate your business in the United States is a crucial decision that can significantly impact your company's success. Each state offers different benefits regarding taxation, regulatory environment, and business incentives. For Canadian businesses expanding into the US, understanding these factors is essential to making an informed decision.

Delaware: The go-to state for business incorporation

Delaware is renowned for its business-friendly environment, especially for large corporations, due to its specialized legal system and favourable tax laws, making it a top choice for incorporation.

Nevada: Favourable tax environment and privacy

Nevada is attractive for its lack of corporate, franchise, and personal income taxes and strong privacy protections for business owners, appealing to those seeking discretion and tax advantages.

Wyoming: Low costs and strong asset protection

Wyoming offers low incorporation costs, no state taxes, and robust asset protection laws, making it an economical and secure choice for startups and small businesses.

Texas: A booming economy with a pro-business climate

Texas, with its strong economy, lack of corporate income tax, and various business incentives, is ideal for companies looking to grow in industries like energy, technology, and manufacturing and for those seeking a business for sale in Texas.

Florida: No personal income tax and strategic location

Florida’s lack of personal income tax and strategic location for access to Latin American markets make it an appealing opportunity for businesses seeking tax savings and international opportunities.

New York: Access to capital and a global market

New York offers unparalleled access to financial markets and global opportunities, making it a prime choice for businesses needing capital and aiming for international expansion despite higher taxes and regulations.

How to register a business in the US from Canada

Registering a business in the United States as a Canadian is a straightforward process, but it must be handled correctly to ensure the company can operate legally and efficiently. While Canadians can complete most steps remotely, registration requirements vary by state and business structure.

• Select the state and business entity: The first step is choosing where the business will be registered and whether it will operate as an LLC or corporation. This decision affects compliance, taxation, and ongoing administrative obligations.
   
• Register with the state authority: Canadians must file formation documents with the relevant state agency where the business will be based. Approval officially establishes the company as a legal operating entity.
   
• Obtain a US Employer Identification Number (EIN): An EIN is required for tax reporting, hiring employees, and opening US bank accounts. Canadians can apply for an EIN without a US Social Security number.
   
• Open a US business bank account: A US bank account is essential for managing operating expenses and receiving revenue. Some banks may require in-person verification or additional documentation for foreign owners.
   
• Apply for licences and permits: Depending on the industry and location, additional licences or permits may be required before operations can begin. These vary at the federal, state, and local levels.
   
• Meet ongoing compliance requirements: After registration, businesses must maintain good standing through annual filings, tax submissions, and record-keeping. Staying compliant helps avoid penalties and operational disruptions.

Tax implications for Canadians purchasing a US business

Buying a US business as a Canadian can trigger tax obligations in both the United States and Canada, making cross-border tax planning essential from the outset. Depending on the business structure, location, and how income is earned, Canadians may be subject to US federal, state, and local taxes, as well as ongoing Canadian reporting requirements. Issues such as double taxation, profit repatriation, and personal tax residency can significantly affect returns if not handled correctly. Because tax outcomes vary widely based on individual circumstances, Canadians considering a US business purchase should consult a qualified cross-border tax attorney or tax advisor before completing any transaction.

How much does it cost to buy a business in the US?

The total cost of buying a business in the United States goes far beyond the advertised sale price. For Canadians, a realistic budget must account for valuation differences, professional fees, regulatory costs, and cross-border financial considerations that can materially affect the final investment.

Business purchase price and valuation

The purchase price depends heavily on industry, location, revenue stability, and growth prospects. Many small US businesses are valued using earnings multiples or cash-flow benchmarks, meaning even modest changes in performance can significantly shift pricing. Canadians should also be aware that competitive markets and high-demand sectors often command premium valuations.

Legal, accounting, and due diligence costs

Professional fees are a necessary part of a cross-border acquisition. Legal advisors review contracts, ownership structures, and liabilities, while accountants assess financial health and tax exposure. Due diligence costs may increase if the business operates across multiple states or regulated industries.

Financing requirements and working capital

Beyond the purchase price, buyers typically need additional capital to support operations after closing, and exploring finance options for Canadians buying a US business can be crucial in managing these needs. This may include payroll, inventory, marketing, or system upgrades. Financing options and lending terms can differ for foreign buyers, often requiring higher equity contributions or personal guarantees.

Taxes, licences, and regulatory expenses

Initial costs may include state and local registration fees, operating licences, permits, and early tax obligations. These expenses vary widely depending on where the business is located and the nature of its activities, and they can add up quickly if overlooked.

Foreign exchange exposure and transfer costs

Canadians funding a US acquisition in Canadian dollars face currency risk during the purchase process. Exchange rate movements between agreement and settlement dates can materially change the effective cost of the transaction. International transfer fees and poor FX execution can further erode capital if not properly managed

How can MTFX help Canadians buy US businesses?

Are you looking to buy a business in US as a Canadian citizen? Do you need to convert Canadian dollars to US dollars for your business?

MTFX can make it worthwhile with competitive exchange rates, low transfer fees, expert foreign exchange tools, and personalized currency exchange guidance.

Competitive exchange rates and low transfer fees

Buying a business in the US as a Canadian requires you to send large sums of money across the border, and it's crucial to reduce the pressure on your bottom line. As a specialist provider, MTFX offers competitive exchange rates and FX risk management. Specialist providers are often the cheapest way to transfer international business money because they use a high-volume, low-margin approach. You can also check the mid-market rates using the MTFX currency converter tool.

Risk management solutions

Foreign acquisitions have risks, such as CAD/USD exchange rate fluctuations. Buying a company in the US as a Canadian takes time. The exchange rate may be favourable today, but there's no guarantee it will stay so by the time you're ready to close.

MTFX can help you mitigate exchange-rate risk and improve budget certainty with tools like forward contracts and market orders that track, target, and even lock in your desired exchange rate.

Expert guidance from currency exchange specialists

We have dedicated currency specialists to guide the currency market, share CAD - USD exchange rate trends, and give insight into how new developments affect your business. You can enjoy simple business money transfers by skipping the bank.

MTFX offers reliable and trusted currency exchange services for Canadians looking to buy a business in America.

With MTFX, you benefit from competitive exchange rates, low transfer fees, personalized guidance from dedicated currency specialists, and a range of tools for making international business money transfers and other payments online via our secure platform.

Open an account today with MTFX to save on foreign exchange costs when buying a business in the US as a Canadian.

FAQs

1. Can a Canadian citizen buy a business in the USA?

Yes. In fact, Canadians can buy existing businesses in the USA if they want. They have the advantage of strong economic ties between Canada and the US, as exemplified by the United States-Mexico-Canada Agreement (USMCA), preceded by the North American Free Trade Agreement (NAFTA).

2. Can I get a visa if I buy a business in the USA?

Yes, the two main options are the E-2 and the EB-5 Visa. The E2 visa is a temporary visa which expires after a defined number of years. The EB-5 visa is a permanent visa which requires a more substantial investment and leads to a green card.

3. Can Canadian businesses do business in the US?

You can live, work, and do business in the USA if you obtain the appropriate immigration status.

4. Can I hire employees in the USA for my business?

Yes, as a foreign business owner, you can hire employees in the USA. However, you must comply with US employment laws, including obtaining an Employer Identification Number (EIN) and adhering to payroll tax requirements.

5. Do I need a physical presence in the USA to start a business?

No, you can start a business in the US without any physical presence in the country. Many states allow foreign entrepreneurs to incorporate remotely. However, having a US address and bank account may be beneficial for practical reasons.

6. How can I protect my intellectual property rights when starting a business in the USA?

To protect your intellectual property (IP) in the USA, you should register your trademarks, patents, and copyrights with the relevant US authorities, such as the US Patent and Trademark Office (USPTO). It’s also wise to use legal agreements to protect your IP from unauthorized use.

7. What types of visas are available for Canadian entrepreneurs to start a business in the US?

Canadian entrepreneurs can explore several visa options, including the E-2 Treaty Investor Visa, L-1 Intracompany Transfer Visa, and TN Visa under NAFTA. Each visa has specific business operations and investment requirements in the US.

8. Can a Canadian start a business in the US?

Yes, Canadians can start a business in the USA. You can find businesses or franchises, such as a business for sale in California, for sale in the USA. Also, you can buy a business in any industry, such as a gas station in the USA. The process typically involves choosing a state for incorporation, registering the business, and complying with state and federal regulations. While physical presence is not required, understanding legal and tax obligations is crucial.

9. How can MTFX help with buying a business in the US?

MTFX offers safe, secure currency exchange services and a cost-effective way to exchange CAD for USD and to make international business payments. FINTRAC regulates us and has specialized in FX and global payments for over 25 years.

10. What are the first steps for a Canadian buying a US business?

Start by identifying your target industry and state, then confirm whether you’re buying shares or assets and what structure you’ll use to own the business. From there, assemble the right advisors for due diligence (legal and accounting), review financials and liabilities, and outline your funding plan and timelines for closing. If you plan to operate the business in the US, you should also align the purchase with an appropriate immigration pathway early in the process.

11. How do I find businesses for sale in the USA?

Most buyers begin with established business marketplaces, local business brokers, and industry-specific listing networks in the state where they want to buy. You can also source opportunities through professional networks, accountants, franchise channels, and local chambers of commerce. The key is to filter listings by verified financials, seller disclosures, and realistic valuation expectations before moving into negotiations.

12. What legal requirements must Canadians meet to own a US business?

Canadians typically need to choose a legal entity (such as an LLC or corporation), register it in the state where the business operates, and ensure the business meets applicable licensing and regulatory requirements. The purchase itself should be supported by formal agreements, due diligence, and proper closing documentation, often involving escrow and structured payment terms. Since requirements vary by state and industry, working with qualified legal professionals is strongly recommended.

13. How do Canadians finance purchasing a business in the USA?

Common options include using personal capital, securing seller financing, arranging financing through Canadian or US lenders, or bringing in partners or investors, depending on deal size. Buyers also need to plan for working capital after closing, not just the purchase price. Because lending terms can differ for foreign buyers, it helps to prepare strong documentation, clear business financials, and a credible operating plan.

14. Do Canadians need a US bank account to buy a business?

Not always, but it often makes the transaction and ongoing operations far easier. A US business bank account can support payroll, vendor payments, tax payments, and day-to-day cash flow once the business is running. Some banks may require additional documentation for foreign owners, and in certain cases, in-person verification may be requested.

15. How do Canadians transfer funds to the US to close a deal?

Most cross-border purchases require wiring funds in USD to an escrow account or the seller’s designated account by a specific closing date. Because exchange rates and transfer fees can impact the total cost, many buyers plan currency conversion ahead of time to reduce risk, avoid delays, and ensure the final amount received matches the purchase agreement. For large transfers, using a specialist provider can also help improve pricing transparency and timing control.

16. Do Canadians need a US visa to buy a business?

No. Canadians can buy or own a US business without a visa. However, if you intend to live in the US or actively manage the business on the ground, you’ll typically need an appropriate immigration status. Ownership alone doesn’t grant residency or work authorization, so immigration planning depends on how involved you’ll be day to day..

Open an account today  with MTFX to save on foreign exchange costs when buying a business in the US as a Canadian.