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The Cross-Border Newsletter - Early 2020

February 2020

The Cross-Border Newsletter is a snapshot of transactional activity across the Canada-U.S. border. The purpose of this report is to provide a quick download of market trends, actionable insights for decision-makers and to keep our readers ahead of the curve on where the cross-border market is heading.

Should Canadian entrepreneurs incorporate in the United States?

Canadian entrepreneurs often look to the United States for the future financial prospects of their startups, primarily through development funding from angel investors and venture capitalists or a transformative exit deal with a larger acquirer. This reality raises the stakes on a key initial corporate decision of where to start their company, and can cause Canadian entrepreneurs to wonder, “am I better off incorporating in the United States?” In this article, we explore how while incorporating in Canada is a viable, and often compelling option, there is no “one size fits all” solution, and savvy founders are advised to consider the issues so that they can make an informed decision.

Understand the risks and advantages of incorporating in the United States

SEC proposes amendments to proxy rules applying to proxy advisory firms

In November 2019, the U.S. Securities and Exchange Commission (SEC) issued proposed amendments to its proxy rules to regulate certain of the activities of proxy advisory firms. The proposed amendments amend the definition of “solicitation” to expressly include the activities of proxy advisory firms, and are intended to help ensure investors who use proxy voting advice to inform their voting decisions receive more accurate, transparent and complete information from proxy advisory firms. In this article, we discuss these proposed amendments and explain the potential implications for Canadian businesses.

Find out more about the proposed amendments

Cannabis in the United States: The laws of the land in 2019

Canada made history in October 2018 by becoming the first major country in the world to legalize the “adult use” of cannabis for recreational purposes at both the federal and provincial government levels – and this progress continued in Canada in 2019. In the United States, cannabis is legal for medical use under state law in more than 30 states, and is even legal for adult recreational use under state law in more than 10 states. However, cannabis continues to be illegal under U.S. federal law in all states – unless it is hemp. In this Legal Year in Review article, we discuss the evolving cannabis legal landscape in the U.S., including the prominence of cannabidiol, or CBD.

What you should know about the cannabis landscape in the U.S.

International tax: A year of transition

In 2019, global efforts towards international tax reform – spearheaded by the G20 and the OECD – continued to move forward. Two developments in particular are expected to have a major impact in Canada. First, on December 1, 2019, the Multilateral Instrument (MLI) entered into force in Canada. Second, recent proposals from the OECD to alter the manner in which global profits are allocated among countries – “BEPS 2.0” – would expand the taxing rights of market jurisdictions (Pillar One) and impose a global minimum tax on multinational enterprises (Pillar Two). In this Legal Year in Review article, we analyze the major international tax developments in 2019 that will impact Canadian business.

Stay up to date on the latest changes to the international tax landscape