Starting a business in Quebec: The essential guide

Do you have a business idea? Do you want to be immersed in the entrepreneurial world? The good news is that starting a business in Quebec is easier than you think. However, there are essential steps to take to ensure a strong beginning.

In this guide, you’ll find everything you need to know about starting a business in Quebec. From the creation process to choosing the proper legal structure, anticipating challenges, available resources, and more. Vital information to confidently embark on the initial stages of your venture!

As of December 2021, there were 255,328 businesses in Quebec, with 97.7% being SMEs* This vibrant entrepreneurial atmosphere plays a crucial role in our economy. There are numerous advantages awaiting new businesses, especially sole proprietorships, which comprise most recent ventures. These advantages include:

Launching a business in Quebec, is straightforward. Additionally, the startup steps are well-documented, regardless of the business’s legal structure – more on that later.

Québec is one of Canada’s most diverse and prosperous provinces, thanks to its commercial relationships worldwide. This makes our market a promising geographic location for companies.

The Quebec government and the Canadian government offer various support programs for entrepreneurs and startups. These practical and financial programs streamline the startup and growth processes significantly. Revenu Québec provides an extensive network of resources accessible to you, such as your local employment center.

Furthermore, their services are personalized, free, and available regardless of your project’s nature.

Thanks to a well-regulated administrative system, Quebec businesses can handle their taxes without hassle. For sole proprietorships, income and expenses are typically integrated into the owner’s personal income. This results in personal tax rates, simplifying administrative complexities.

Even procedures like the TPS/TVQ sales tax are straightforward regarding tax filings. Nearly everything can be done online with a few clicks at both the provincial and federal levels. Additionally, your business income data is available online, allowing quick access to requested tax evidence for financing purposes. For example, this will enable you to consult your files quickly and obtain the tax proofs you need when applying for financing.

Quebec’s high-quality education system, with numerous higher education institutions, provides local businesses with access to a pool of skilled talents. And that’s not counting the international talent from all fields who settle in Quebec. This multilingual, qualified workforce is an invaluable asset for local businesses. Quebec’s advanced infrastructure and technology further contribute to its appeal for businesses.

It’s important to remember that every company and entrepreneur is unique. Some advantages vary based on the industry, business size, and other factors. Engaging in a business project involves thorough research to understand what pertains to you and to identify specific challenges along your journey!

Are you a practical thinker? You’ll be pleased to learn that starting your own business follows several well-defined steps. Here’s a summary of these to enhance your action plan.

First and foremost, it’s essential to understand that you perceive your idea in one way (X) while the market perceives it in another way (Y). This illustrates that even a brilliant idea isn’t always profitable when put into action. This is why meticulously analyzing its relevance in the current market is essential. Doing so lets you contemplate its feasibility once realized and brought to the forefront.

Your tool of choice: market research. This tool provides insights into the interest of your target market (direct customers or businesses) about your service or product concept. Does it meet an active need? Is the potential customer base sufficient to generate profits within realistic timelines? Who are your competitors? What’s the supply-demand ratio? These are some of the questions that market research encourages you to explore.

The legal structure is the legal facade your company takes on. Each structure has advantages and disadvantages in terms of management, liability, administrative, and fiscal processes. This decision depends on your specific business needs, considering factors like short and medium-term goals, the number of shareholders, and more.

As mentioned earlier, a sole proprietorship is the most common business structure for startups in Quebec. This is due to the simplicity of setting up this model and the flexibility it offers to self-employed individuals.

However, it’s essential to keep in mind that the owner has unlimited liability for the company’s debts and obligations.

This form is a variant of the sole proprietorship. The owner can limit his liability by assigning a separate asset to the business: an entity detached from his personal assets.

Two or more partners agree to contribute money, work or assets to the company. The general partnership can facilitate the equitable sharing of profits and losses. In other words, all partners are liable for the company’s debts.

Here, shareholders’ liability is generally limited to their investment in the company. This is because the corporation is a separate legal entity from its shareholders. It’s established through a process of incorporation that emphasizes the shares held by the shareholders.

Similar to a general partnership, this form involves two types of partners: general partners (responsible for managing the business) and limited partners (generating funds without playing an active management role). Limited partners have limited liability, while general partners have unlimited liability.

It is a combination of a limited partnership and a corporation. It includes both general partners (responsible managers) and limited partners (shareholders with limited liability).

The principle of this legal structure is “one member, one vote.” Cooperative members are both owners and users of the goods or services produced by the cooperative. Decisions are, therefore, taken democratically within the organization.

When the choice of legal structure becomes challenging, it’s a sign that your business is complex enough to warrant expert advice. Accountants and lawyers can assist in such cases.

The business plan is an essential document designed to follow you from the idea to the business development – even if you’re sole proprietor. Once your concept is validated, this plan becomes your blueprint for action. It includes vital, clearly identified elements that create a detailed portrait of your business project. These include:

• An executive summary
• Company description
• Market analysis
• Marketing strategy
• Product and service organization and management
• Operational plan
• Financial analysis
• Development strategy
• Risks and opportunities

While it’s an excellent navigation tool for the business owner, the financial plan is also a requirement in various stages of your start-up. For example, it is often required when applying for financing, loans, business credit, etc. This allows you to present your business project even if it hasn’t yet materialized.

Preparation is great, but there comes a time when action is necessary. Depending on your field of activity, you may need to obtain documents such as permits or licenses. Always start by ensuring you have these administrative details covered. Then, the work can begin: kickstarting the marketing plan, prospecting, engaging in networking events, analyzing initial results and making adjustments, and so on.

Again, many legal aspects must be considered based on your industry, business structure, and other criteria. Some of the most important laws and regulations include:

• Québec Taxation
• Labor standards
• Occupational health and safety
• Environmental law
• Consumer protection
• Access to information
• Personal information protection

Targeted information can be provided through available resources that support your startup efforts. Don’t hesitate to seek advice from professionals and specialists.

In Quebec, resources available to new entrepreneurs and businesses are abundant! In addition to documentation and government programs (like the local employment center), several options are available. Here are some that enable thousands of startups to access various development opportunities throughout Quebec:

Contractor networks

Local business networks, like Chambers of Commerce, often have more impact than we realize. Joining them or participating in their events helps you build your contact network, understand your local market, and discover collaboration opportunities.

Online resources

You can find a wealth of varied information in just a few clicks. Both public and private organizations provide practical data-relevant links and constantly update their content. The internet is a goldmine for startups when used effectively.

Training and support programs

Once again, the internet is your best ally. Depending on your needs, goals, and industry, you can find training platforms, mentoring, and guidance. Moreover, most of these resources are free for startup entrepreneurs.

Business financing

Many need financing to launch their business. Different financial institutions offer their financing programs tailored to your needs. Other options like crowdfunding and bank loans are also viable. Both traditional and innovative sources await you. Explore them carefully!

Customers and network

Asking for help at the start of your project is always well-received by your network and customers. For example, a friend or family member might help you with accounting at a lower cost than a firm. A satisfied customer could write a testimonial to enhance your online credibility. The possibilities are endless—ask.

Is it possible to complete a perfect start-up journey? No – even your greatest competitors have had to overcome obstacles and challenges, even if it meant slowing down their progress. However, certain attitudes increase your odds of success, such as:

Be curious and different

Understanding your market and customer behaviour is essential. Recognizing what works for your significant competitors is important, too. However, your unique winning formula is specific to your business. Dare to offer something different, even if something very similar seems safer. This is how you stand out and create a narrative that resonates with your target audience and community. Marketing and promotion are two platforms that help you showcase your strengths and attract initial customers.

Invest in marketing and promotion

In the digital age, building your brand identity and promoting your offerings is more accessible than ever. But beware of pitfalls! It requires a well-crafted strategy, regardless of your industry. This applies to sole proprietors as well.

While investing during the startup phase carries risks, defining precise goals within your business plan helps turn it into a calculated risk.

Refine your business plan

Nothing in this plan should be left to chance. Each element plays a vital role in guiding your approach. Consult it, optimize it! Make it a compass to refer to in moments of doubt, and don’t forget to write down what’s working well.

Meet tax requirements

Taxes, fees, and various regulations apply to all businesses, including those that have just started. Always meet tax requirements regardless of your sales figures, profit margins, etc. Effective accounting management and a comprehensive understanding of your obligations are essential. Surround yourself with experts to avoid any inconveniences (like payment defaults, to name one example).

Is your business idea becoming clearer in your mind? You now have everything you need to get started. We’ve been there, and you can do it too. Here we go!

*Research and Statistics on Small and Medium-sized Enterprises (SMEs), Government of Canada

Here are a few commonly asked questions about starting a business in Quebec.