Starting an Indigenous-owned and operated business on a First Nation reserve is very different than starting one off a reserve.

If you’ve got a business idea that you’re considering opening on First Nation land, then keep on watching. By the end of this video you’ll know the five major differences between starting on a business on-reserve versus off-reserve.

Before we get into the five major differences, be sure to subscribe to my channel and the bell so that you get notified when I post a brand new video.

The first major difference when starting an Indigenous business on First Nation land is that the cost of operating that business is much lower than if you’re operating off-reserve.

The reason is that almost all of the input costs of a Native-owned and -operated business are exempt from taxes, meaning that the Native status employees do not have to pay income tax, inventory is exempt from tax, utilities are exempt from tax, the building, the supplies, and pretty much everything that you have to pay for in that business are exempt from tax.

Now all of these overhead cost tax savings sure add up over time, meaning that an on-reserve business has significant cost advantages over an off-reserve business. I would love to know how many of these differences that you already knew. Is it one? Is it all five of them? Please let me know in the comments below.

The second major difference when starting an Aboriginal-owned business on-reserve is that it’s nearly impossible to get bank financing.

It’s extremely difficult to get bank financing when your assets, including your home and your business, are located on First Nation territory, because the bank cannot use that as collateral against your business loan. When applying for bank financing, the bank is much more likely to lend to you if you have major assets, such as a home, to lend against. So for a non-Indigenous business, if you’ve got a pretty good business plan and some assets that you can use against the loan as collateral, you should likely be successful. The reason that banks can’t use Native reserve land or assets on that land as collateral is because only Native band members of that specific reservation can own the land. No one else.

Which brings us to the third major difference, which is how an Aboriginal business can get financial help starting up.

The third major difference between starting a business on-reserve versus off-reserve, is that there are now unique funding opportunities for Indigenous-owned businesses,

these funding opportunities are often from Aboriginal financial institutions that will fund business projects and startups based on where you are geographically. If you’re wanting to start or grow your Native-owned business, there are 59 Aboriginal financial institutions across the country of Canada. Funding for starting up, training grants, and other subsidies can help you grow and prosper as a Native-owned business.

For off-reserve business, there are lots of funding opportunities from other organizations as well, but you’ve really got to keep an eye out for grants that are applicable to your industry and the project that you want funding for.

The fourth major difference when starting a business on First Nation versus off-reserve, is that the laws and regulations on most First Nations are much easier to follow.

Now the reason I say most First Nations is because reserves fall under federal jurisdiction in Canada. So the chief and councils within each reserve decide what the permits and regulations for business are required within their specific community. So this means that building permits, sign permits and other business licenses are determined by getting your chief and council’s approval if they require it.

For an off-reserve business, the licensing and permit process can be quite difficult, depending on what you’re trying to do for your business. Luckily though, you can find exactly what business licenses and permits that you need by going to Now let’s move on to our biggest and most anticipated difference between starting a business on First Nation versus off First Nation.

Different number five is charging tax on your sales.

Now this one specifically applies to Canada. Now the Indian Act between Canada and the First Nations people stated that First Nations are reserved for status Indians only, and that the tax system did not apply to them. However, in recent years, the Canada Revenue Agency has introduced federal regulations enforcing that First Nation businesses charge HST to customers due to the influx of non-Native status shoppers buying tax-free goods and services.

So the topic of on-reserve Indigenous businesses charging sales tax is quite complex. One in which lawyers and accountants could debate on for hours. Have you guys shopped on a First Nation reserve before? Please share in the comments below.

Now for an off-reserve business, you are required to register, collect and remit HST taxes once your gross annual revenue exceeds $30000 a year. You can find all of the details on CRA’s website. If you are looking to start up a business, no matter where it is, download my complete Business Startup Checklist at the link below. If you like this video, please let me know by hitting the like button. Let me know what you liked about it in the comments below. Be sure to subscribe and share it with your friends.