By DAVID BERTOLA
Business First

For business owners considering setting up an office or selling products or services in Canada, there are some things to think about.

We asked experts to address 10 questions that U.S. business owners should ask themselves before considering an operation in Canada:

1. Will my product sell there?

Lauren Rachlin, partner at Hodgson Russ LLP in Buffalo, said before deciding to operate in Canada, the company should make sure its products or services are needed there.

Rosanna Masucci, senior trade specialist at Buffalo Export Assistance Center, U.S. Department of Commerce, offered a simple acid test: "If you can sell a product in the U.S., you can most likely sell it into Canada, as well."

2. Should I hire an attorney?

Rachlin suggested that someone considering a subsidiary or a brand-new Canadian corporation will likely have questions an attorney can help answer.

And while anyone can establish a company, Rachlin said, "I highly recommend using a lawyer to set up a company. Get your legal house in order; get it incorporated by a corporate lawyer to make sure shareholdings are properly held."

3. How can the U.S. Dept. of Commerce help?

"We help companies export to any country, not just Canada," said James Mariano, who is director of Buffalo Export Assistance Center, U.S. Department of Commerce.

In a nutshell, he said, the organization helps companies determine three things: whether they have an exportable product, if it's a fit for a specific market and, from a regulatory standpoint, if the company can penetrate that market.

Mariano said various programs, both free and fee-based, help companies find distributors, representatives, agents, customers and partners.

4. How can the World Trade Center help me?

In several ways. Among them is an import/export tool kit that helps companies create a repeatable process to properly quote international work.

"It basically puts it in a 12-step process, assigns responsibility for each and makes sure a company is within U.S. trade regulations, since there are opportunities for companies to get burned on an international trade process," said WTCBN President Christopher Johnston.

5. What is the WTCBN Trade Expert Library?

Johnston described the library as articles written by members for members: case studies about various issues including shipping, supply chain management, conducting business in certain markets and how to separate yourself from the competition.

"Companies can learn the most from other companies," Johnston said. "Anytime a company can talk about what they learned or where they made a mistake and can pass along that knowledge, that's where the real learning takes place."

6. Can I hire independent distributors?

For establishing a sales force in Canada, U.S. companies often hire independent distributors. Sometimes, Rachlin said, these individuals represent multiple non-competing companies in various industries.

Masucci said for smaller companies, working with independent sales reps or distributors is one way to begin selling into Canada.

"This is done successfully all the time," said Jon-David Giacomelli, a lawyer with Toronto-based Cambridge LLP.

7. What legal issues may I need to think about?

Rachlin cited the example of a company selling products successfully in Canada, then establishing a pick-and-pack operation so products can clear customs once, then be sold from the Canadian entity.

He asked Giacomelli if this requires the company to incorporate or register in Canada. Or could the U.S. entity operate a pick-and-pack operation north of the border?

Giacomelli said companies often run into problems when they are a bona fide U.S. entity and not recognized as one in Canada. The most common error that causes legal headaches, he said, is not registering through the Extra Provincial Corporations Act, which awards licenses to U.S. companies wishing to operate in Canada.

8. What tax advantages are there?

The Canadian Consulate General helps U.S. companies open offices there.

"There are incentives to open up and get into Canada," said Mary Mokka, trade commissioner.

For those considering expansion or new investment opportunities, she recommends visiting investincanada.gc.ca/eng/default.aspx.

Under "Tax Advantages," which can be found in the "Competitive Advantages" section, is a list of incentives for businesses and a table that compares Canada's corporate income tax rates to other G7 countries.

For Canadian investment opportunities, Mokka recommends contacting Margaret Lange at margaret.lange@international.gc.ca

9. Are Canadian employment laws different?

"For big (U.S.) companies trying to go north, when hiring sales or distribution representatives, they have to be wary of our employment laws that differ significantly than in the U.S.," Giacomelli said.

Among these, he cited the Employment Standards Act in Canada, which provides payments to employees who are fired.

"There can be significant cost if you fire someone, and the higher you go on the food chain, the higher the cost will be," he said.

10. How might product labeling be affected?

Giacomelli gave the example of nutritional and ingredient info on food products, as well as the languages they appear in. And while there's a requirement that certain information appear in French and English, it may vary based on the province.

"This doesn't usually prohibit companies from making the move (into Canada) as it doesn't represent a large cost," he said.

For more on how to set up an operation in Canada, visit the following Web sites:

• Consulate General of Canada in Buffalo: www.buffalo.gc.ca
• Canada Revenue Agency: http://www.cra-arc.gc.ca/sred
• For those considering business expansion into Canada: www.investincanada.gc.ca/eng/default.aspx
• Ontario Ministry of Labour: www.labour.gov.on.ca/english/es/
• U.S. Exports: www.export.gov
• U.S. Commercial Service: www.trade.gov/cs
• World Trade Center Buffalo Niagara: www.trade.gov/cs