Whether a foreign director can join a Canadian board depends on where it was incorporated
A federal CBCA corporation must have at least 25% resident Canadian directors. Ontario removed its equivalent requirement in July 2021, and British Columbia never had one.
5 July 2021
Section 105(3) of the Canada Business Corporations Act requires at least 25% of a corporation's directors to be resident Canadians, and at least one where the board has fewer than four members. Reduced requirements apply in some prescribed sectors.
Ontario amended its Business Corporations Act to remove the equivalent 25% requirement with effect from July 2021. British Columbia's Business Corporations Act has never imposed a residency requirement. The same commercial business can therefore be constrained or unconstrained purely on the basis of its incorporating statute.
Independent of residency, National Instrument 52-110 requires every member of a reporting issuer's audit committee to be independent and financially literate — a hard rule with no comply-or-explain relief for non-venture issuers.
What it means for a cross-border candidate
This is the single most practical piece of diligence a candidate can do on a Canadian approach: find out the incorporating jurisdiction before the second conversation. On a small federally incorporated board the residency arithmetic can make your appointment impossible even though you are personally eligible — and on an Ontario or BC company the same seat is entirely open.
This paragraph is the Global ID Exchange’s own reading, not a statement by any authority named above. Everything in the body of this item is a matter of record; this is judgement.
Sources
- Canada Business Corporations Act, s.105(3) and s.102(2)
- Business Corporations Act (Ontario), as amended July 2021
- National Instrument 52-110 — Audit Committees
Rules change and transitional provisions frequently apply. Verify against the primary instrument before you rely on any provision described here.
Read next: the Canadian regime in full.
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