Corpy
Free zones

Free zones and incentives in Canada

Canada has no free zones in the Dubai sense. Its incentives are research credits, grants and customs programmes that defer duty on goods.

Quick answer

There are no tax-free zones. CCPCs can claim refundable SR&ED credits of up to 35%, IRAP funds R&D projects, and duty deferral programmes help importers and exporters.

Verified Oct 2026 · Innovation Canada
SR&ED (CCPC)
Up to 35%
SR&ED (other)
15%
Free zones
None
Duty deferral
Available

Main programmes

The incentives founders use most often.

ProgrammeBenefitWho qualifies
SR&ED35% refundable / 15% creditCompanies doing qualifying R&D in Canada
IRAPNon-repayable fundingSmall and medium tech companies
Duty Deferral ProgramDuty relief on re-exported goodsImporters and exporters
Provincial creditsVariesDigital media, film, R&D and others
Example

A CCPC spending CAD 400,000 on qualifying R&D salaries can receive a refundable federal credit of up to 35%, before any provincial credit.

How it works in practice

Documenting R&D

SR&ED claims need records of hypotheses, experiments and time spent, kept as the work happens.

IRAP advisers

Funding starts with an industrial technology adviser who reviews the project before you apply.

Customs programmes

Bonded warehouses and the Duty Deferral Program let goods be stored or processed without paying duty if they are re-exported.

Editor's note

For tech companies, SR&ED is the real Canadian incentive. Set up time tracking for R&D on day one; claims fail on records, not eligibility.

Before you start
  • R&D activities identified
  • Time tracking for technical staff
  • IRAP adviser contacted
  • Provincial credits checked
  • Customs programme reviewed if importing

What to watch

Claim deadlineSR&ED claims are due within 18 months of the year end.
Foreign controlNon-CCPCs get a non-refundable 15% credit, not 35% refundable.
Contractor costsOnly part of contractor fees counts toward claims.

Common questions

Are there free trade zones?

Canada uses Foreign Trade Zone programmes rather than physical zones.

Can foreign-owned companies claim SR&ED?

Yes, at 15% non-refundable.

Are grants taxable?

Government assistance usually reduces the expenses you can claim.

Local terms

SR&ED
Scientific Research and Experimental Development credit.
IRAP
Industrial Research Assistance Program.
FTZ
Foreign Trade Zone programmes.

Primary sources

Business Benefits Finder (Innovation Canada)↗Canada Revenue Agency↗Canada Border Services Agency↗