Choosing between federal and Ontario incorporation comes down to where you will operate and who your directors are. Incorporate in Ontario ($300, name protected in Ontario, no residency rule) if you stay local. Go federal ($200, name protected Canada-wide) if you want national reach.
The short answer for GTA founders
Both options give you a real corporation with limited liability, a separate legal identity and the ability to open business bank accounts and sign contracts. The differences that matter are cost, speed, where your business name is protected, and director-residency rules. Get those four right and the rest follows.
If you are a Markham or wider GTA founder who only plans to serve Ontario customers, provincial incorporation is usually the cleaner path. If you expect to sell across provinces or want your name locked down nationally, federal incorporation earns its slightly more involved process.
Federal vs. Ontario at a glance
| Factor | Federal (Corporations Canada) | Ontario (Provincial) |
|---|---|---|
| Government filing fee | $200 online | $300 online |
| Typical timeline | Often next business day | About 5 business days |
| Name protection | Across all of Canada | Within Ontario only |
| Director-residency rule | At least 25% of directors must be resident Canadians | No residency requirement |
| Extra registration | Must register extra-provincially in each province you operate in | None — already provincial |
| NUANS report (named corp) | Required, valid 90 days | Required, valid 90 days |
| Annual return | Filed with Corporations Canada (about $12 online) | Filed through the Ontario Business Registry |
Cost: look past the headline fee
On paper, federal incorporation is cheaper at $200 versus $300 for an Ontario corporation. But the comparison is not apples to apples.
A federal corporation only settles the question of your legal existence. To actually carry on business in a province, you must register extra-provincially there. For a federally incorporated company operating in Ontario, that means an additional Ontario registration on top of the federal filing. Once you add that step, the total cost of going federal can match or exceed a straight Ontario incorporation — especially if you only ever operate in one province.
So the right way to read the fees is:
- Operating only in Ontario? The $300 provincial fee is often the lower all-in cost.
- Operating in several provinces? The $200 federal fee plus per-province registrations is the structure you actually need.
Speed: federal usually wins on the certificate
If raw turnaround matters, federal incorporation is often completed the next business day, while Ontario online incorporation typically takes about five business days. For founders racing to open a bank account or sign a lease, that gap can be meaningful.
Keep in mind that a fast federal certificate still leaves the extra-provincial registration to complete before you are fully set up to operate locally, so the "federal is faster" advantage is partly offset once you account for the full setup.
Name protection: local shield vs. national shield
This is the difference founders underestimate most.
- Ontario incorporation protects your corporate name within Ontario. Another business could register a similar name in British Columbia or Alberta.
- Federal incorporation gives your name protection across all of Canada, with Corporations Canada applying a stricter, nationwide name review.
If your brand is central to your business and you ever imagine expanding beyond Ontario, the national name protection that comes with federal incorporation is a genuine moat. If you are a local service business with no out-of-province ambitions, provincial protection is usually enough.
You can read more about the federal process directly from Corporations Canada and about provincial filings through the Ontario Business Registry.
Director-residency: a deciding factor for newcomers
For many newcomers to Canada and international founders setting up in the GTA, 董事居籍要求 — the director-residency rule — is the deciding factor.
- Ontario has no director-residency requirement. Non-resident directors can fully own and direct an Ontario corporation. This makes provincial incorporation especially friendly for newcomers, foreign founders and partnership structures with directors abroad.
- Federal incorporation requires at least 25% of directors to be resident Canadians. If your board does not meet that threshold, federal is simply not available to you until it does.
If your founding team does not include enough resident Canadians to satisfy the 25% rule, Ontario incorporation is often the practical choice.
NUANS and the named vs. numbered decision
Whether you go federal or provincial, choosing a named corporation (for example, "Maple Lane Consulting Inc.") means you need a NUANS name-search report. The report compares your proposed name against existing names and trademarks, and it is valid for 90 days, so you should incorporate within that window.
If you would rather move fast and skip the naming step, you can choose a numbered corporation (such as "1234567 Ontario Inc." or a federal equivalent). Numbered corporations do not require a NUANS report, and you can register a business name or operating name later. Many founders incorporate as a numbered company first and add a public-facing name afterward.
Staying compliant after you incorporate
Incorporation is the start, not the finish. Both structures carry an annual return obligation that keeps your corporation in good standing:
- Federal corporations file an annual return with Corporations Canada, costing about $12 online. Note this is a corporate-law filing, separate from your tax return.
- Ontario corporations file their annual return through the Ontario Business Registry.
Missing these filings can lead to your corporation being dissolved, so it is worth setting reminders or using a service that tracks them for you.
So, which should you choose?
Use this simple rule of thumb:
- Choose federal if you want national name protection, plan to operate in multiple provinces, or are building a brand you intend to scale across Canada — and you can meet the 25% resident-Canadian director rule.
- Choose Ontario if you operate only in Ontario, want a simpler single-jurisdiction setup, or have non-resident directors who would be blocked by the federal residency rule.
For most Markham and GTA founders serving a local market, Ontario incorporation is the straightforward starting point. For those with national ambitions or cross-province plans, federal incorporation is worth the extra steps.
Whichever path fits, the paperwork — name searches, NUANS reports, articles of incorporation, extra-provincial registration and your first annual filings — is exactly the kind of detail that trips up new founders. Markham Office offers a done-for-you incorporation service that handles the filing, naming and compliance setup end to end, so you can focus on launching. Reach out and we will get your corporation set up correctly the first time.