Why do R&D in Canada?
In today’s global world, there is a battle for talent and minds. I often come across companies who wish to take advantage of Canada’s strong talent and human capital to execute their Research and Development (R&D) business plan.
Why is Canada such a great opportunity for companies to do R&D?
-We create great engineers and scientists through our world-renowned universities, colleges and technical schools.
-We can access and attract the best talent in the world through open, free and progressive immigration policies like the Global Talent Stream which expedites technical talent such as programmers, engineers for companies with these labour needs.
-Canada offers very generous tax credits, incentives, grants and partnership opportunities supported by all stages of Government for early stage technology companies that lower your cost of R&D and provide significant competitive advantages.
-Lastly, our legal and tax structures are greatly simplified so that American companies can “set up shop” here relatively easily through a network of experienced service providers and advisors who are well versed in foreign R&D “inbound” operations to maximize corporate governance and minimize risk and expense.
At ENTAX, we specialize in advising technology companies on how to access the best tax credits, incentives and grants. Here is a summary of some of the major programs used by Companies in Canada to support their R&D:
-Scientific Research and Experimental Development (SR&ED): This $4B program gives companies CASH BACK on eligible R&D expenses. Companies can get cash refunds from 30% to 65% of their labour and contractor costs of performing R&D.
-IRAP: This program is aimed at companies developing technology usually with core Intellectual Property. Through this program, companies can receive anywhere between $50,000 to $200,000 to support their engineering costs as a grant from the Government.
-MITACS: This program pairs graduate level university students with private companies to solve hard problems and perform research.
Here is a common scenario found at some early stage tech companies: A small R&D stage company with 5 engineers has an annual expense of about $500,000. Through SR&ED, they may receive anywhere between $100,000 to $300,000 back in refunds. Through IRAP, this program may offer significant recoup of salaries. It is not uncommon for small tech companies in Canada to have ALL their R&D paid for!
Of course, with anything government related, there are rules, processes and policies. It’s best to speak with an knowledgeable advisor on your options and how you can take advantage of this program. At ENTAX, we have significant experience in industries such as clean-tech, agri-food, advanced manufacturing, software (IoT, SaaS, Gaming, Blockchain, AI, Mobile, VR/AR, etc.) with dedicated technical experts in each field. We have some great testimonials from happy clients that have worked with us.
Please contact us to learn more about how we can help you take advantage of R&D in Canada.