Complete Guide to Starting a Business in Nova Scotia

Are you looking to start a business in Nova Scotia? This Canadian province has a growing economy and workforce, and investors are taking interest in multiple industries that are expanding their activities within the area, among them ocean technology, the business of diversity and seafood. With a steadily growing economy and a government that is committed to supporting economic growth, Nova Scotia is an area that offers plenty of potential for entrepreneurs to find success. 

In this complete guide, you can learn the main steps involved in starting a business in Nova Scotia, from researching your business idea to obtaining the necessary funding for operations. 

Note: These steps do not necessarily have to be completed in the order presented. Please read through the list and adjust the process according to your unique business, financial and personal needs. 

1. Find a business idea

The foundation of every successful business is a great idea that’s been validated by comprehensive market research. Taking the time to investigate the market demand for your product or service will save you time in the long run, and also help you avoid making an investment that doesn’t bear fruit. By delving into the business landscape of Nova Scotia and learning which industries thrive in the province, you will be able to verify whether your business idea is practical, and profitable. 

Nova Scotia has long supported business initiatives in the agriculture, fishing, tourism and forestry industries. However, there are other industries that are considered ripe for growth in the province, including: 

• Agri-food
• Seafood
• Clean technology
• Ocean technology
• Advanced manufacturing
• Digital media
• Information communications and technology
• Financial services
• Life sciences
• Naval defense
• Businesses of diversity

Here are a few suggestions for how you can research your business idea before you commit to doing business in Nova Scotia:

• Confirm that there is a market for your product or service. Statistics Canada can provide key province-specific information about the economy, society and environment which could prove invaluable.
• Check out the initiatives being put forward by the Nova Scotia government to advance the provincial economy. These updates can give you a good idea of the types of businesses currently thriving in the province and what type of initiatives the government is ready to support, such as start-ups, export initiatives and international investment. For example, the province of Nova Scotia recently increased funding for business startups by young entrepreneurs through the Futurpreneur program, and has multiple programs designed to accelerate the success of startups in the province.
• Look for initiatives put forward by the Government of Canada that reveal opportunities within the province of Nova Scotia, such as the Atlantic Innovation Fund and the Strategic Innovation Fund.
• Research your competitors so that you will be well-positioned to defend your business idea when it comes time to ask for funding. This guide to help businesses define their unique selling point (USP) by the Business Development Bank of Canada (BDC) is one of many resources offered on the site, including multiple articles about starting or buying a business in Canada.

2. Choose a business structure and a business name

Before you can register your business in Nova Scotia, you need to choose a legal business structure and name. 

You may want to launch a start-up, which will allow you (and oblige you) to make decisions about business structure from the get-go. Or, you may prefer to purchase an existing business which has already been set up as a sole proprietorship, partnership or corporation. 

Types of business structure

There are three main types of business structures to choose from when starting a business in Nova Scotia, each with unique tax and legal implications.

Sole proprietorship

A sole proprietorship is a type of business operated and owned by one person. This form is the simplest route to starting a business.

In a sole proprietorship, while you enjoy the full share of profits, you must also account for losses and expenses against your individual income. Moreover, should the business fail, creditors have the right to go after both your personal and business assets. Taxes for this business structure are filed at the individual rate, making it a viable option primarily for smaller-scale businesses. 

Partnership

A partnership is a business structure where a business is co-owned by two or more people. This collaborative approach can make some aspects of starting a business easier, such as sharing the burden of startup costs and risk.

It's crucial to understand that partners are collectively responsible for any debts and losses incurred by the business. Moreover, decision-making can become more complex in a partnership arrangement. 

Corporation

When you incorporate a business in Nova Scotia, you can keep your business finances completely separate from your personal finances.

There are many benefits to incorporating. For example, you will be able to transfer ownership of your business as needed, you will enjoy the security of limited liability, and you could even have easier access to loans and grants. 

However, incorporating your business in Nova Scotia will cost more, and filing your taxes will be a more complex task. It's usually a good idea to talk to a lawyer or other advisor (such as a corporate tax specialist) before moving forward and incorporating your business.

Choosing a business name

To register your business in Nova Scotia, you will need a unique, legal business name. Choosing a name involves following a list of guidelines and rules provided by the provincial government and having your name approved by the Registry of Joint Stock Companies.

If you intend to operate in other provinces, or to be certain that your chosen name is not already protected even if it is not in use, you can visit the NUANS database of incorporated businesses.

After confirming that your chosen name is unique and follows all legal guidelines, you will then need to register your business name online. 

3. Choose a business location in Nova Scotia

Choosing a location for your business is important for banking, applying for funding, and filing your annual corporate taxes. Your business location could also have important ramifications depending on the type of goods or services you are offering.

In Nova Scotia, businesses that are related to the local natural resources, such as fishing or agriculture initiatives, may do best if located near to the sea or in a rural area. In contrast, a tech start-up may be more likely to thrive in a larger center like Halifax. Other factors that could influence your choice of location include whether you intend to do business largely online or offline, whether you need a brick-and-mortar retail location or just an office, and whether you are offering goods or services as your primary commodity. 

Remember to verify zoning laws and legal regulations before signing a lease or committing to a location.

4. Obtain the necessary licenses and permits

Depending on the location and type of business you intend to operate, you will likely need to obtain specific licenses or permits. You can learn more via Access Nova Scotia or by registering with BizPal. For business operations specific to Halifax, visit the City of Halifax website.
Beyond licenses and permits, other provincial and local legislation could affect how you run your business. It is always advisable to ask for legal guidance to confirm that you are aware of and have understood specific laws and regulations, before setting up operations. Remember that a professional tax accountant can also offer invaluable assistance when it comes to taxation and bookkeeping obligations, such as filing an annual T2 tax return.

To research permits laws and regulations, you may wish to refer to any or all of the following:

• Nova Scotia Occupational Health and Safety Act
• Nova Scotia Department of Agriculture Licensing and Permits
• Nova Scotia Labour Standards Code
• New Brunswick- Nova Scotia Partnership Agreement on Regulation and the Economy (PARE)

5. Create a business plan

There is no legal obligation to create a business plan, either for the provincial or federal government. However, creating a business plan will definitely help you clarify your objectives, assess what you need in order to operate, and apply for funding via loans and governmental grants.

A business plan is also very helpful when trying to explain your venture to outsiders, as it is a comprehensive document that can easily answer many important questions. Insurers and potential financiers will also likely want to see this type of formal document, so that they can examine your market research and goals, so why not draft a business plan and update it as you move forward?

If you’re not sure how to put together a business plan, you can refer to one of the following resources:

• The CBDC (Community Business Development Corporation) of Nova Scotia
• The BDC (Business Development Bank of Canada) offers multiple business templates, including a business plan template and a marketing plan template. 

Remember, you can always add information as you refine your business goals and improve your understanding of your target audience, customer needs, competitors and more. Start with outlining what products or services you will be offering, the costs of getting started, and some reasonable financial projections. Running a business is an ever-evolving adventure, and you’ll need to be flexible and ready to adapt in order to succeed.

6. Get a business number

Many provinces in Canada have chosen to simplify the method of identifying businesses by using the federally-assigned, 9-digit Business Number (BN) for official paperwork. Not all Nova Scotia businesses need a BN, only those that will need one of the following types of accounts:

• GST/HST
• Payroll
• corporate income tax 
• import/export.

If you are not sure whether you are eligible to register for a BN, use the tool provided by the Government of Canada. Once you have determined that you are eligible, you can register for a Business Number through the CRA. 

7. Register your business in Nova Scotia

Now you have what you need to register your business with the Nova Scotia Registry of Joint Stock Companies. Use the online platform to register your business, and be ready to provide information about your business name and business structure. 

8. Open a business bank account and obtain financing

Efficient financial management is an important element of running a successful business. From opening a business bank account to applying for funding in the form of loans or grants, it’s important to get informed about your options when starting a business in Nova Scotia. 

Opening a business bank account

To separate your personal and business finances, and to qualify for some types of funding, you will need a business bank account. Visit your local financial institution and bring along:

• Your business number (BN)
• A copy of your business registration documentation
• Any other relevant information (partnership agreement, etc.). 

A business accountant from T2inc.va can help you set up and maintain your corporate accounting activities, including filing annual tax returns and regular bookkeeping, or you can rely on our efficient and affordable online taxation software.

Financing your business

Nearly all entrepreneurs rely on external sources of funding until their business is up and running and able to turn a profit. In addition to self-financing (putting up the money yourself), there are a few funding options when it comes to financing a business in Nova Scotia:

Free financing

The best type of funding comes with no strings attached. The following options involve raising funds or applying for grants, and there is no need to pay this money back at a later date. Free financing methods include:

• Grants available to businesses in Atlantic Canada
• Grants available to business start-ups in Nova Scotia
• Federal business grants
• Wage subsidies programs
• Corporate grants
• Tax rebates, tax refunds and tax credits
• Contests
• Utility rebates

Debt financing

Sometimes the only way to get your business going is by borrowing funds. Although this type of financing involves paying back money borrowed, often with interest, it can still be a viable option for many entrepreneurs who want to start a business in Nova Scotia. 

Examples of debt financing include:

• Canada Small Business Financing Program
• Provincial business loans
• Futurpreneur
• Community Futures Canada
• Federal loan programs
• Bank loan
• Etc.

8. Establish an online presence

In today’s digital age, having an online presence is crucial for business success. Start establishing your business online by securing a domain name and setting up a business email address. Enlisting the expertise of a web marketing expert can assist in developing an online presence that is both effective and economical, enhancing your sales and increasing visibility to your desired customer base.

You can get help with setting up your online presence with resources like Digital Nova Scotia, whose digital adoption programs connect businesses across the province with digital marketing experts.

9. Be prepared to pay corporate taxes

Depending on the type of business structure you have chosen, you will need to pay separate business taxes. Nova Scotia corporate tax rates range from 2.5% (for businesses earning under $500,000) to 14% for businesses earning more than 500,000. Learn more about dual tax rates on the Government of Canada site.

Nova Scotia businesses pay provincial and federal business taxes, both of which are collected by the Government of Canada. It is your annual responsibility to fill out a T2125 form.

Access Nova Scotia provides businesses with helpful information about filing corporate tax. Keep in mind that you could qualify for tax credits, such as:

• Tax deduction for new small business
• Nova Scotia Venture Capital Tax Credit
• Nova Scotia Innovation Equity Tax Credit 
• Nova Scotia Film Tax Credit
• Nova Scotia Research and Development Tax Credit

You may find it helpful to hire a professional corporate tax accountant to simplify and speed up the process, and to be sure you aren’t missing out on any relevant tax credits or deductions. 

Starting a business in Nova Scotia? T2inc.ca can help you with your business taxes

Starting a business in Nova Scotia involves a lot of time and effort. From researching viable business ideas to choosing and registering a name and securing funding, learning how to become a successful entrepreneur is a complex process.

Corporate accounting is an important part of running a successful business. Avoid the risk of an audit or tax litigation and be sure you don’t miss out on important tax credits by relying on the services of a professional tax accountant.

Contact the corporate tax professionals at T2inc.ca today to learn more.