How do I handle a sale to a US buyer priced in US dollars?

A US buyer paying in US dollars adds two things to an ordinary sale: a possible federal filing, and an exchange rate sitting between the price on paper and the money that reaches your account. Neither is unusual. Both are easier to manage when they are settled in the agreement rather than discovered at closing.

Whether the Investment Canada Act applies

Innovation, Science and Economic Development Canada says all non-Canadians who acquire control of an existing Canadian business are subject to the Act, and must submit either a notification or an application for review unless an exemption applies. The government can also review investments of any size on national security grounds. The buyer carries the filing, but your closing date should allow for it.

Who carries the exchange-rate risk

If the price is fixed in US dollars, the buyer pays a known US amount and you receive whatever it converts to in Canadian dollars on the day you convert it, so your Canadian proceeds move with the rate. If the price is fixed in Canadian dollars, the buyer carries that movement instead. The agreement can name the currency, the conversion date or rate source, and whether a holdback or later instalment is paid in the same currency.

Payments spread over time

BDC describes vendor financing and earn-outs as ways a seller can stay involved after a sale. Each stretches payment over months or years, and a US-dollar instalment extends the currency exposure across that whole period. Deciding up front whether those later amounts are fixed in US dollars, in Canadian dollars, or converted at a stated rate keeps that exposure from becoming a dispute.

Tax points for your accountant

The CRA says a seller and purchaser may jointly elect so that no GST/HST is payable on the sale of a business or part of one, but not if you are a registrant and the purchaser is not. A US buyer may not be registered, so confirm early whether the election is available. How amounts received in US dollars are reported on your return is a question for your accountant.