No Residency Requirement for Corporate Directors in Ontario.

As of July 5, 2021, corporations incorporated under Ontario’s Business Corporations Act will no longer be required to have at least 25% of directors be resident Canadians.

As of July 5, 2021, the section of the Ontario Business Corporations Act requiring 25% of directors to be resident Canadians will be repealed. The effect of the repeal will see that those corporations incorporated under the OBCA will not need any resident Canadians on their Board of Directors.

This push by the Ontario legislature is designed to bring the province’s corporation laws inline with other provinces that also have no residency requirements for directors and attract those entities that sought other jurisdictions because of the requirement. These other provinces include British Columbia, Alberta, Quebec, New Brunswick, Nova Scotia, Prince Edward Island. Only federally incorporated entities, and those incorporated under the laws of Saskatchewan, Manitoba, and Newfoundland maintain a form of Canadian residency requirement for directors.

This change will have a great impact on the ability of foreign investors and entrepreneurs to invest in Ontario. Often these individuals were discouraged from incorporating in Ontario because the residency requirement forced them to seek resident Canadians who could act as directors for the corporation.

Contact Kustra & Bloom, for more advice on this and other business and Canadian law issues.