For our first issue of 2019, we are honoured to welcome Consul General Zaib Shaikh to our community. As our new Consul General of Canada for Southern California, Arizona and Nevada, we asked Zaib if he would share some of his perspectives on his role and on the opportunities to build upon the special economic and cultural relationship that Southern California and Canada share together.
After more than 24 years in commercial real estate, we have never been more excited by the multiple, diverse options for expanding businesses in Southern California. Many of us have heard about Southern California’s booming economy. When we focus on commercial real estate, however, we get a much clearer picture of the industries, properties, regional markets, and undiscovered opportunities that underlie the region’s prosperity and promise. It is a region ideally suited to a broad range of users with a diversity of real estate needs.
A frequent question that often arises in our discussions with US companies who want to expand into Canada is how our country goes about taxing foreign corporations. The process typically begins with determining whether the particular corporation is considered to be resident in Canada for tax purposes. A corporation may be considered resident in Canada without being a Canadian corporation. A corporation that is resident in Canada for tax purposes is subject to tax in Canada on its worldwide income.
What will the office of the future look like? It’s an oft-asked question these days as the workplace continues to evolve, moving from the era of the cubicle to the open office and now settling quite comfortably on a landscape with a more residential look and feel.
“Office space today is being used differently, with an emphasis on making the environment more inviting and comfortable for users,” explains Ami Kvas, Director Product Management, Casegoods and Custom Solutions, Teknion. “Biophilia – bringing elements of nature, daylight and natural materials indoors – is a component of this movement. The craft and use of wood exhibited by our new collection of Punt furnishings introduces a warm, inviting and relaxing tone to the workplace, along with an elegance and comfort of home.”
The Tax Cuts and Jobs Act passed in 2017 created as a new federal income tax incentive program, the opportunity zone program, located in Section 1400Z-1 and Section 1400Z-2 of the Internal Revenue Code of 1986. In just the past few weeks, the U.S. Department of the Treasury and the IRS issued much anticipated guidance on many important aspects of the opportunity zone program, which has now moved investors’ and other business stakeholders’ interest in opportunity funds into high gear.
Despite the talk of trade disputes and the apparent political divide between Canada and the United States the two countries continue to be closely connected in many ways, including with respect to consumers and consumer products. Building your brand and product in the United States in many cases means that you have also built a reputation among Canadians due to the frequent travel of Canadians to the United States and the American media presence in Canada. This creates an ideal opportunity for many companies to launch their products and brands in Canada. While there are many similarities between the countries with respect to marketing and selling to consumers and consumer products there are also many differences.
It’s hard to believe we are already in the 4th quarter of the calendar year 2018, with the year-end right around the corner. As the year-end approaches, most of us start planning for the winter months and the holidays. It’s also a good time to catch up on personal paperwork and gear up for year-end tax planning in preparation of the 2018 U.S. tax filing season (starting in early 2019).
Taxes may not be the first thing on the top of your year-end to-do list; however, given that the implementation of the “Tax Cuts and Jobs Act of 2017” (TCJA) is right around the corner, it’s a good time to see what you can do now to be prepared and positioned for expected results and no surprises.
It probably doesn’t come as a surprise that Amazon, Netflix, Microsoft, Apple, Alphabet and Facebook have been some of the best performing stocks in the first half of this year. But what may be surprising is that those six stocks made up 98% of the S&P 500 Index returns for the first half of 2018 according to a recent CNBC article1!
Southern California (SoCal) has a huge business presence globally. It is one of the most vibrant business environments in the world. Los Angeles is the third largest municipal economy in the world. Tokyo is the largest and New York is second. LAX is the 4th busiest airport in the world and the Port of LA ranks as the busiest port in the western hemisphere. This growth of SoCal’s economy brings with it opportunities for businesses from around the world to participate in the building of infrastructure and providing services throughout SoCal. It is an opportunity to gain market share in this culturally diverse region.
The Riverside County Office of Foreign Trade is an active partner with the multitude of businesses and investors who work in this booming and sprawling Inland Southern California county, and the Office’s many programs this year illustrate the wide array of services and support exporters and investors receive.
SoCal growth companies looking for funding should consider all capital raising options. While many entrepreneurs tend to only consider the traditional route of angel investors to venture capitalists to being acquired, there are other options that may be a better fit for the company’s long-term growth strategy.
As cryptocurrencies gain traction toward mainstream adoption and acceptance, companies in the crypto ecosystem must balance an influx of revenue and fast growth with the challenges of building a financial infrastructure capable of supporting their changing needs. Whether they’re a cryptocurrency exchange, a company funded through an initial coin offering (ICO), a platform or technology provider―or any combination of those categories―firms need processes and tools to help them address technological, marketplace and regulatory uncertainty amid rapidly changing token and company valuations.
While e-commerce in the U.S. reaches a stage of maturity and online sales stabilize, Canada is expected to see consistently higher e-commerce growth – especially this year and into 2019.1. Canadians shop more online, they increasingly turn to their neighbor to the south. Last year, 67 percent of our e-commerce shoppers bought from U.S. merchants. That’s 23 percent more than in 2016. How often do they shop? Six times each, on average. And, according to Canada Post’s 2018 Canadian Online Shopper Study, 65 percent of Canadian e-commerce shoppers are planning on buying just as much, if not more, in 2018.
Faster, more efficient service is a common goal of all businesses that ship to Canada, and this need for speed has been exacerbated in recent years, with the surge in e-commerce shipments heading to Canada. Canadian customers share the same delivery expectations as their U.S. counterparts — shipments should arrive within 2-3 days, on-time, and at little or no cost to the customer. But with an international border to cross, longer distances to travel, and an unknown distribution network to conquer, how could this be done? In fact, tremendous advances have been madeincross border logistics such that U.S. businesses can now reach the Canadian market faster and with more flexibility than ever before. Much of this innovation has been fueled by technology, and some, by looking at things in a new way.
Canadian companies that may have cast their dreams of California aside because the state is too far and too competitive ought to go try out—especially since it has recently become the world’s fifth largest economy and is brimming with opportunities. The state’s economy is so large that the Canadian Trade Commissioner Service (TCS) treats the northern part of the state and the southern part as two separate markets, explains Krista Eisan, a trade commissioner based in Los Angeles who covers the clean technologies sector. Southern California is well-known as the entertainment capital of the world with a multitude of roles for Canadians there and in related fields such as digital media. The region also boasts many robust industries, namely environmental technology, life sciences--including bio-technology and medical devices and research, manufacturing—particularly for apparel. For companies looking for an “agent”, the TCS is ready to help.
In a recent New York Times article, Long Beach Mayor Robert Garcia said of his City, “the downtown is being reborn and recreated.” Indeed, Long Beach has undergone an impressive revitalization in recent years, transforming its historic downtown into a desirable urban environment on the water and building upon its rich tradition in aerospace, manufacturing, and shipping. People often associate Long Beach with its Port, and for good reason – it is one of busiest in the United States moving more than $100 billion in goods in 2017 and creating 1 in 8 jobs in the City. Yet, Long Beach’s strong Port is only part of what makes the City a great business destination.
Next month marks 23 years that I have worked for a Canadian company. Next month also marks 23 years as an Air Canada employee and therefore, an Ambassador of our neighbors to The North. But ties to Canada began, for me, long before I “flew the flag” for its country’s Flag Ship Carrier. It began in the 1940's.
We think of borders as being fixed by geography. Something that we can point to on a map. Something we experience when we cross it. Most Canadians live in proximity to the U.S. border and part of Canada’s identity is defined by this border. But for an expatriate living away from one’s home country, a border can be more elastic than fixed. Over time, the proximity to the border is measured less by physical distance and more by personal attention, relevance and interest. And so while a physical border in times of peace is rarely redrawn, for an expat, the border can actually stretch near and far over the years. For me, it has been in the shape of an arc – sometimes feeling very close and sometimes existing far away - regardless of the actual distance.
There is a large and dynamic Canadian market waiting for Southern California businesses to discover. Québec, a province of over 8 million people with an annual GDP of over $300 billion, may be better known among the Northeastern U.S. states it borders than here in Southern California. And for that reason, MAPLE Business Council has developed a turnkey three-day fact-finding mission to share some of Québec’s leading centers of excellence and innovation. It will be a chance to explore new export, investment, and innovation collaboration opportunities.
While there has justifiably been a lot of focus on opportunities pertaining to emerging countries in Asia and Latin America, we can often forget about the significance of the trade relationship between Canada and the US, which is the second largest bilateral trade relationship in the world. The US is the largest economy in the world and its most populated state, is also home to the 6th largest economy of the world with an annual GDP exceeding $2.5 trillion.