Many business owners have built up earnings in their corporation and are looking for tax efficient ways to pull the earnings out to achieve their personal and business financial goals. These goals may include:
building and protecting savings
providing for loved ones
planning for retirement
What is the purpose of the investment? First, think about what you'll be doing with your savings. This will help dictate what savings vehicle is best suited for your situation. Then consider the following factors:
Taxes: As a small business owner, you have access to the small business tax rate, which is typically lower than your personal tax rate (See table below). Also, as of January 1, 2019, the Federal Budget decreased the small business limit for corporations with a set threshold of income generated from passive investments.
For business owners, before investing personally or corporately, it is worth seeking professional advice to ensure that it suits your individual circumstances.