Canada: The New and Trending R&D Hub in the World
Bloomberg's September 2020 report emphasizes the problems with R&D incentives in the States and why businesses are moving their R&D centres to Canada.
But why are foreign businesses setting up their R&D centres in Canada?
Canada offers generous R&D Tax Incentives.
As a young entrepreneur, setting up a business is no easy feat, but if it's in Canada, you're in for plenty of benefits. By international standards, Canada provides the most attractive R&D treatment.
Though the U.S. is one of the top tech hubs since the tax systems are not so generous as that of Canada, there is a drastic shift and a new trend in the way businesses are setting up their R&D centres. Factors such as high business taxes, corporate culture, cost of living, and various business practices in the States make it less feasible for new ventures.
The Government of Canada provides low-interest funding, grants, and incentives under the SR&ED tax incentive program to encourage research activities in Canada's top cities. If you compare R & D's cost in other nations and Canada, you will know how cheaper it is to carry out R & D here than in the States.
The SR&ED offers plenty of incentives, and you need not be concerned about expenses such as wages, overhead costs, and materials. Incentives in different forms are provided, such as tax deduction, investment tax credit, and a refund provided it is eligible.
In the U.S, around 65-75% of all contracted research is eligible for the tax incentive, whereas, in Canada, there is a complete 100% tax incentive for contracted research.
A comparison of R&D Tax incentives for R&D between the U.S. and Canada are presented here in this post by a Toronto based CPA firm providing corporate income tax services to local and foreign corporations in Canada.
Now, do you see why Canada is far better than the States? Undoubtedly, Canada will be the next R&D Hub in the coming years and outpace Silicon Valley.
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