CBC’s Paul Haavardsrud wrote at the beginning of the month how Canada’s northern Yukon Territory wants to make its autonomous government a potent selling factor for business, by making Yukon a preferred place to incorporate businessses. Leveraging its sovereign jurisdiction in this way could work: Look at Delaware.
What do a Chilean mining company, an Illinois-based pharmaceutical firm that just sold for $12.8 billion, and a gold producer from Colorado operating in Turkey have in common?
They’re all registered in Yukon.
That Alacer Gold, Catamaran, or Orosur Mining don’t do any work in the territory is a quirk of Canadian regulatory history that Yukon wants to make less of an oddity. So today, Yukon is changing its Business Corporations Act in a bid to convince even more far-flung companies that part of the answer to tapping Canada’s capital markets can be found north of 60.
“If you want to send a message to the business community that this is a good place to come, what better way to say it than you’ve got really good business legislation,” says Paul Lackowicz, a partner at Lackowicz & Hoffman, a Whitehorse law firm.
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How much of a difference can some esoteric changes to business legislation really make? For a province like Ontario or Alberta, not much at all. But for a remote locale with a population of only 36,500, even a little economic activity can move the needle.
In that regard, Yukon is in the same boat as Delaware, a tiny state that’s so amenable to business that nearly half of the public companies in the United States are incorporated there. Yukon’s regulatory changes don’t include tax benefits, so no one should expect it to become Delaware North.
Registering for a business licence in a jurisdiction is also different than incorporating there as a legal entity. Still, in a sparsely populated territory that raised its employment rate 2.1 percentage points in 2013 by adding an extra 400 jobs, even changes at the margin can matter.