What are the Canadian tax consequences for non-Canadian investors?

For each Canadian syndicate deal, investors become partners in a special-purpose vehicle, structured as a US series limited partnership. Each Canadian syndicate will typically send out IRS Schedules K-1 to all its investors, both Canadian and non-Canadian, in any year in which it has taxable income or deductible expenses.

We understand from informal consultation with tax counsel that, generally, income and distributions from Canadian syndicated deals to non-Canadian investors who are not engaged in a business carried on in Canada will not be subject to Canadian federal income tax. However, non-Canadian investors may be subject to Canadian federal withholding tax, which may be reduced under an applicable income tax treaty or convention.

AngelList is not qualified to provide tax advice and the above should not be read as tax advice. There are many important exceptions to the generalization stated above, so please be sure to consult your tax advisor and relevant international tax treaties before making an investment.

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