Canada offers the most established and the most widely used investment immigration programs in the world conferring permanent resident status. Canada accepts close to eight thousand business applicants annually providing permanent residence to 25,000 immigrants. The Canadian confederation system of government and the country’ social norms offer a “European alternative” to the more unabashed capitalism of the USA. Canada offers European style social benefits complete with the resultant high levels of taxation and unparalleled quality of life. Under the Canadian model, business immigrants can enjoy the benefits of a national health care program, affordable first class education and a national pension system that provides measurable annual income upon retirement.
Canada’s constitutional laws feature a dual immigration system. Business immigrants with a high net worth can therefore choose between a passive business investor program operated by the Federal government and a more popular program exclusively managed by French speaking Quebec. The Quebec immigration program offers significantly faster processing times and other benefits.
Applicants with a mid-range net worth can choose to participate in a number of business programs for Entrepreneurs, including programs managed by the provinces.
Announcement: Federal & Quebec Investor Programs are presently on hold and the below stated information reflects the particulars of programs, which were previously in place. This information is subject to change at any time.
The Investor Program (Passive Investment)
- The Federal Investors ClassThe Federal Investor program is passive in nature and requires an investment of $800,000 CAD which is deposited with the Receiver General of Canada and a personal net worth of $1.6 Million CAD with two years of suitable management or business experience. The investment bears no interest and must be maintained for five years. Applicants may state a desire to live anywhere in Canada except Quebec. The investment is government guaranteed and the proceeds are allocated to the Provinces excluding Quebec.The intention is to attract business acumen and investment to Canada. A qualified applicant has typically owned and/or managed an active trade or business, which may include professional practices, rather than merely managing investment activities. In this context gray areas include professionals that don’t manage the business, passive real estate investors and investment managers. For example developing real estate may qualify where as merely owning real estate may not qualify. Gifts and inheritances only qualify where the applicant parlayed the gift or inheritance into a business that he or she actively manages.The regulations require management of five or more full-time employees or compliance with two of four bright light tests, designed to define the scale of the underlying business, for at least two years in the period beginning five years before the date of the application and ending on the day a determination is made on the application;
- Percentage of ownership in the enterprise times number of full time employees, not less than two;
- Percentage of ownership times total annual sales not less than $500,000;
- Percentage of ownership times net income not less than $50,000;
- Percentage of ownership times year end net assets not less than $125,000.
The Federal program permits applicants to finance the bulk of their investment through designated banking institutions. Typically the financing schemes require a down payment of $180,000. The bank loans the applicant the balance of $620,000. The applicant deposits the sum of $800,000 with the Receiver General. The Canadian government guarantees repayment of the bank loan not the investor’s down payment.
The bank takes fees and interest from the down payment, the immigration agent takes their commissions from the down payment. The Federal government disburses the net proceeds to the Provinces for use in a variety of public projects. The net cost to the investor is the down payment. The five year investment period begins following visa issuance.
- The Quebec Immigrant Investor ProgramThe Quebec program is virtually the same as the Federal program with the following important distinctions: the investment is guaranteed by the Province of Quebec; one must state an intention to settle in Quebec; the investment proceeds are allocated to the Province of Quebec rather than the English speaking provinces and the five year investment period begins following Quebec approval, even before the investor comes to Canada. If the investor is refused by the Federal authorities for a medical or security inadmissibility, the investment is refunded.An investor is defined as a foreign national with at least two years in the five years preceding the application, of management experience (duties related to the planning, management and control of financial resources and of human or material resources under the investor’s authority, provided that such responsibilities and duties are not assumed in the context of an apprenticeship, training, or specialization process attested to by a diploma) in a legal farming, commercial or industrial business, or a suitable legal professional business (whose personnel include at least two full time employees excluding the owner and his spouse), or a government department who alone or with his accompanying spouse or de facto spouse and has net assets of at least $1.6 Million obtained legally, excluding amounts received by gift within the period of six months prior to the submission of an application and who undertakes to invest $800,000 for five years, in a prescribed (government guaranteed) investment.Recent legislative and policy changes have given investor’s management experience a more liberal application than historically applied in order to allow professionals such as doctors, dentists, pharmacists, accountants, lawyers and engineers who operate their own professional practices, which employ at least two full-time personnel, to qualify as an investor.An applicant may finance the investment in a manner similar to the Federal program except that the Province of Quebec designates securities brokerage firms and investment banks to finance the investment rather than banks.The Quebec program has been more popular than the Federal program because they generally process the applications faster and pay brokers higher commissions. It’s that simple. The final result is no different than the Federal program except that an applicant must land in the Province of Quebec. But the Canadian Constitution allows Canadian permanent residents to land in Quebec and move elsewhere later.Once approved the Quebec destined applicant will undergo Federal security and medical background checks prior to visa issuance, which generally takes place within 3-6 months following Quebec approval.
- With respect to the first condition above, the qualifying business must meet any two (2) of the following bright light criteria depending on the percentage of equity held in the qualifying business:
ENTREPRENEUR CLASS – Qualifying Business Criteria ATTRIBUTE PERCENTAGE OWNERSHIP OF BUSINESS 100% 50% 20% (i) FULL-TIME EMPLOYEES 2 4 10 (ii) SALES (CAD) $500,000 $1,000,000 $2,500,000 (iii) NET INCOME (CAD) $50,000 $100,000 $250,000 (iv) EQUITY (CAD) $125,000 $250,000 $625,000
With respect to the third condition above, the Entrepreneur Class applicant must operate a Canadian qualifying business for a period of at least one year within the period of three years after the day on which the entrepreneur becomes a permanent resident. The Canadian business must meet any two (2) of the following bright light criteria depending on the percentage of equity held in the Canadian qualifying business:
Qualifying Canadian Business – Removal of Entrepreneur Terms and Conditions ATTRIBUTE PERCENTAGE OWNERSHIP OF BUSINESS 100% 50% 20% (i) FULL-TIME EMPLOYEES 2 4 10 (ii) SALES (CAD) $250,000 $500,000 $750,000 (iii) NET INCOME (CAD) $25,000 $50,000 $75,000 (iv) EQUITY (CAD) $125,000 $250,000 $375,000
Failure to establish a Canadian qualifying business can result in the deportation of the applicant and landed dependants.
- The Quebec Entrepreneur ProgramThe Quebec program differs substantially from the Federal program.A Quebec entrepreneur is defined as a foreign national with at least two years (within the five years preceding the submission of the application) of management experience in a lawful and profitable agricultural, industrial or commercial enterprise who creates, acquires or participates in the active management of a lawful and profitable agricultural, industrial or commercial enterprise that will immediately employ at least one full-time resident of Quebec (30 hours per week), other than the foreign national and his accompanying dependants (R21 (b)). The entrepreneur must control at least 25% of the shares of the new enterprise which must have a value of at least $100,000 of the business in which they participate.To qualify, an applicant must possess a personal net worth of at least $300,000 acquired legally, and have sufficient settlement funding to cover the cost of the applicant’s first three months of living expenses in Quebec.Unlike the Federal program, Quebec entrepreneur applicants must successfully defend a business plan during a selection interview which presented in general terms, outlines the feasibility and relevancy of the project to Quebec. The selection interview is typically preceded by a preliminary market visit to the Province of Quebec by the applicant.Once approved, the application proceeds to Federal security and medical verifications followed by visa issuance with mandatory terms and conditions, within an overall processing delay which can vary between 18-30 months.
- Provincial Nomination ProgramsThere are a number of provinces (including British Columbia;Saskatchewan; Manitoba, Ontario; New Brunswick; Prince Edward Island; Newfoundland and Labrador and the Yukon Territories) which manage their own business immigration programs which require active participation in the management of a business based on a specified investment and job creation. The programs vary in the requirements to qualify but generally refer to a minimum net worth in the area of $350,000 with relevant management experience. Some of the programs require a good will deposit which is refundable once the business has been established.The attached document provides an overview of each program:http://www.immigration.ca/permres-pnp-summary.pdf Read More
Interested readers are invited to complete our Free Assessment to determine whether they qualify for immigration to Canada as an Investor or Entrepreneur.