I own a small, privately-held corporation and am looking for ways to invest my corporation's money more effectively.

The problem is the government taxes passive investment income inside a corporation at a staggering rate of almost 50%. I do not want to invest this money personally either, as I want asset protection. So far the only direction that looks promising is some sort of a trust fund (~25% tax?) I haven't had better advice from a financial advisor.

Does anyone have better suggestions?


Since you are talking about a small firm, for the long term, it would be advisable to invest your money into the expansion - growth, diversification, integration - of your business.

However, if your intention is to make proper use of your earnings in the short term, a decent bank deposit would help you to increase the credit line for your business with the benefit of having a high enough liquidity.

You can also look at bonds and other such low risk instruments to protect your assets.

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The issue only arises when the investments grow in size. A small amount won't trigger the higher tax rates.
If the amount is large enough, then consider using either: Insurance products that are 'segregated', or RRSPs in your own name after your business pays you wages, or Gifting to other family members.

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