2004 Ruling 2004-0082661R3 - Carrying on Business in Canada -- summary under Subparagraph 115(1)(a)(ii)

Ruling that the delegation by a non-resident service provider ("C Limited") to a non-resident investment fund (the "Fund") of accounting and valuation services (e.g., preparing books and records and financial statements, computing NAV each month and calculating redemption amounts and distributions) and investor services (including maintaining a register of investors, processing subscriptions, redemptions and transfer requests, monitoring compliance with anti-money laundering rules, maintaining capital accounts, and mailing or emailing periodic statements to investors) to a related Canadian corporation ("Canco") where "Canco will have no right to directly affect the legal relations of C Limited as regards to other persons and will have no authority to make contracts on behalf of C Limited" will not result in the Fund or C Limited carrying on business in Canada for purposes of ss. 2(3)(b), 115(1) or Part XIV. In the summary, CRA stated that "a business is carried on where the profit producing activity takes place and the profit producing activity of the Fund and the non-resident service provider are not in Canada".