How can I become non-resident and breaking all Canada Ties?

Hi,

I have been reading through so many posts trying to find my answer. But I couldn't.

I am a Canadian citizen, and I want to work in the US. My long term goal is applying for the green card and live permanently in US. So I want to get a non-resident status of Canada, which I have to break all my Canadian ties. The problem is I own a consulting corporation in Canada, which has relatively big profit. If I close it, I would have to pay the remaining money as dividend to me which I will have to pay large amount of income tax. My question is: Can I make this corporation inactive? So it will retain all its profit while I am in the US, and when I retire, I can take money out as my salary from this corporation. If this is not possible, what are my possible options?

I appreciate all your insights and opinions.

Thanks in advance

Tao

I can't help you specifically but I can comment on the process in general: you submit your request to be declared non-resident to ... I forget exactly... but it's on the Canadian tax website I think... you probably have it already. They apparently convene a panel which decides your case.

The more ties you have to Canada, the less likely they are to decide in your favor.

In my case, and this was over 7 years ago, I had a Canadian bank account which I needed to pay my Canadian credit card, because I couldn't get a US credit card (I had no US credit history and credit card companies are too lazy to check Canadian credit). I also had RRSPs. I explained this in my application and they judged it reasonable. However the reply letter I got implied the decision was not unanimous. It also implied there was a fair bit 'o decidin' goin' on. It was all a surprise to me.

So in your case, keeping a company in Canada is probably going to make them question if you are really leaving Canada permanently. Can you roll the assets into an RRSP or something? Or maybe you could argue it is for retirement and you don't want the tax hit now -- same reason you wouldn't want to cash in your RRSP.

Hi Eddycurrent,

Thank you very much for your kind help. That is helpful.

Moving it into RRSP is not an option, unless I want to pay everything as a salary. The income tax is going to be over 50%.

I do have another question though, if I am deemed to be a Canadian resident, I understand I have to pay Canadian tax as well. Do I only have to pay the Canada federal tax or provincial as well? My friend told me that he only paid the federal tax to Canada. And really there is not too much a gap between US and Canada federal tax rate.

Thanks again.

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