Can a Canadian Company Raise Money From US Investors?

Yes. A Canadian company can sell securities to US investors under the same US exemptions American companies use, most often Rule 506(b) or 506(c) of Regulation D, while complying with Canadian securities law at the same time. Many Canadian founders who plan to raise mainly in the US form a US entity (a Delaware corporation or an LLC, depending on the business and the investors) because US investors prefer it and it simplifies structure, tax and future raises. The decision between raising through the Canadian company, forming a US parent, or forming a US subsidiary depends on where the business operates, where the founders live, who the investors are and what the exit looks like, and it should be made with cross-border tax and securities advice before the first investor conversation.

By Joel Arberman, founder of Prepared to Raise · 17 companies taken public, 30+ private placements prepared · Published November 9, 2026

Why Canadian founders look south

Raising private capital in Canada for a small operating business has become harder: fewer active angels outside the large cities, prospectus exemptions that vary by province, and investor networks concentrated in technology. The US private market is larger, Regulation D is uniform across all 50 states, and a founder with contacts, customers or family in the US often finds the network they need there. A growing number of Canadian operators also plan to build the business in the US from the start.

Three ways to structure it

1. The Canadian company sells to US investors directly

A Canadian corporation can rely on Regulation D for US investors: Rule 506(b) for people the founder knows, 506(c) with advertising and verification. It files a Form D and state notices like a US issuer, and it must also fit a Canadian prospectus exemption (commonly the accredited investor or private issuer exemptions) and file any Canadian reports of exempt distribution. Investors receive shares of a Canadian company, which some US individuals accept without concern and some US funds will not touch. Works for a business that operates in Canada and wants a handful of US investors.

2. A US parent company

The founder forms a US entity, the Canadian company becomes its subsidiary (or the business is moved), and US investors buy into the US parent. This is the standard structure when the business will operate mainly in the US or raise repeatedly from US investors, and it is what most US investors expect. It has tax consequences in Canada for the founders, including on the transfer of the existing business, that have to be planned, not discovered.

3. A US subsidiary for US operations

The Canadian company stays the parent and forms a US operating subsidiary; investors invest in the subsidiary or the parent depending on the deal. Common for Canadian companies expanding into the US with a defined US business line.

Which one is right turns on tax residency of the founders, where revenue is earned, whether Canadian investors or programs are also involved, and where a future buyer would be. Get a cross-border accountant and a securities lawyer in each country into the same conversation before you decide. LLC vs corporation when you plan to raise covers the US entity choice.

US securities law for a Canadian issuer, in brief

Regulation D applies to any issuer, domestic or foreign. 506(b): no advertising, pre-existing relationships, up to 35 non-accredited investors with disclosure. 506(c): advertising allowed, accredited investors only, verification required. How to choose.
Regulation S covers offers and sales made outside the US. A Canadian company can raise from Canadian investors under Canadian rules and Regulation S, and from US investors under Regulation D, in a coordinated offering.
Form D and state notices are required for the US sales. Form D and blue-sky filings.
Anti-fraud rules apply to everything said to US investors, whatever the issuer's country.
Regulation Crowdfunding is not available to non-US companies, which is one reason a US entity is formed when a crowdfunding raise is planned.

Canadian rules do not switch off

If the issuer is Canadian, or offers are made from Canada, or Canadian residents invest, provincial securities law applies alongside the US rules. The accredited investor exemption, the private issuer exemption and the offering memorandum exemption each have their own conditions and reporting. A Canadian securities lawyer confirms which fits and files what is required. Founders who raise only from US investors through a US entity, with no Canadian investors and no offers made in Canada, simplify this considerably, which is part of the appeal of structure 2.

What US investors expect from a Canadian founder

US-style documents. A Delaware or home-state entity, a subscription agreement, an operating or shareholder agreement and a disclosure document they recognize. Canadian forms slow US investors down.
A clear answer on tax. US individuals want to know they will not receive foreign tax forms or face withholding surprises. Structure 2 usually gives the cleanest answer.
A US presence. Customers, a bank account, a mailing address, and for many investors a reason the founder is in the US often enough to run the business.
The same five things every investor needs: a specific ask, numbers that reconcile, a return path, legal documents and a disciplined process. What investor ready means.

Practical sequence for a Canadian founder

Decide where the business will live and who the investors will be.
Get cross-border tax advice on structure and on the founders' personal position, including any move.
Form the right entity with raise-ready governing documents.
Prepare the raise: plan, numbers, materials, documents, process. The 90-day plan.
Engage a US securities lawyer and, if Canadian offers or investors are involved, a Canadian one.
Raise from the people you know in the US under 506(b), or advertise under 506(c) if the network is not enough.

Prepared to Raise works with Canadian and other non-US founders forming a US company and raising from their own networks; Founder Launch covers formation and preparation together. We do not give tax or legal advice, and we never find, solicit or introduce investors.

Where to start

Start with the structure question in LLC or corporation to raise, then where US investors actually come from. If the company is new, Founder Launch describes formation and preparation as one project.

This article is general information for founders, not legal, tax or investment advice. Securities rules depend on your facts; confirm your plan with a securities lawyer before you accept money.

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