Immigraion To Canada

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Canada Business and Investment Immigration Overview

Permanent Residence

Canada offers the most established and the most widely used investment immigration programs in the world conferring permanent resident status. Canada accepts close to six thousand business applicants annually providing permanent residence to 15,000 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 can therefore choose between a Federal immigration program composed of the English speaking provinces and a more popular program exclusively managed by French speaking Quebec. The Quebec immigration program offers significantly faster processing times and other benefits.

A. The Investor Program

a. The Federal Investors Class

The Federal Investor program is passive in nature and requires an investment of $400,000 CAD which is deposited with the Receiver General of Canada and a personal net worth of $800,000 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 $120,000. The bank loans the applicant the balance of $280,000. The applicant deposits the sum of $400,000 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.

b. The Quebec Immigrant Investor Program

The Quebec program is virtually the same as the Federal program with the following important distinctions: the investment is guaranteed by the Province of Quebec; professionals such as doctors, dentists, accountants and lawyers do not qualify as management experience; 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.

A Quebec investor is defined as a foreign national with three years of management experience in a lawful and profitable agricultural, industrial or commercial enterprise, in a government body or an international body and who possesses a personal net worth of $800,000 CAD accumulated through lawful economic activities. The investor must also undertake to invest $400,000 CAD for five years, in a prescribed (government guaranteed) investment.

When assessing applications, the definition of management experience is strictly followed and given a narrow interpretation by the Quebec government authorities. It states:

"The actual assuming on a full-time basis of responsibilities and duties related to the planning, managing and control of material, financial and, where applicable, human resources, provided that such responsibilities and duties are not assumed in the context of an apprenticeship, training, or specialisation process attested to by a diploma".

One 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 process the applications much 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.

Some Useful Hints (Quebec and Federal):

There is no advantage in investing until one’s application is approved in principal (either Quebec or Federal).

Processing delays under the Federal program regularly exceeds 2.5 years. This reduces the incentive of the Federal program. Rumor has it that the Federal government wants to increase usage of its program and will reduce processing delays. But such rumours have come and gone in the past.

The Quebec program generally offers processing times in the area of 18 months or less to visa issuance and 12 months to begin the five year investment period from application submission. Applicants who are able, can attend their selection interview in Montreal which can further shorten overall processing time.

As a result of the above factors, the majority of applicants use the Quebec program.

Applicants who require early entry status may consider alternative methods of entering Canada on a non immigrant basis while waiting for permanent residence processing to conclude.

Under the Canadian immigrant investor program, management experienced applicants may move to Canada for as little as $120,000 CDN. The down payment effectively becomes the cost of acquiring Canadian permanent residence.

B. The Entrepreneur Program

a. The Federal Entrepreneur Class

The Entrepreneur class confers permanent residence upon applicants who demonstrate an ability to become economically established in Canada on the basis of their two years of suitable business experience and a personal net worth of $300,000 CAD. Approval is contingent upon the entrepreneur undertaking to invest and become involved in the active management of a qualifying Canadian business operated in Canada that will contribute to the economy and create employment for Canadians.

There are two important distinctions from the Investors Class. First, the Entrepreneur Class applicant must establish and become active in the management of a qualifying Canadian business in Canada. Approved applicants are therefore admitted to Canada under a conditional visa and must report regularly to immigration authorities. Applicants who do not fulfill their qualifying Canadian business conditions may be subjected to removal hearings which could lead to deportation of the applicant and family members.

Second, applicants without qualifying business experience cannot qualify. Thus unlike the Investors Class, the management of five or more full-time employees option is not available under the Entrepreneur Class.

To Qualify a successful Entrepreneur Class applicant is one who has:

1. Managed a qualifying business and has controlled a percentage of equity of the qualifying business for at least two years in the period beginning five years preceding the application; and

2. Possesses a personal net worth of C$300,000 legally obtained (assets may comprise of inheritances as well as the assets of a spouse/common-law partner/same-sex partner) and

3. Undertakes to control at least 33% of the equity of a qualifying Canadian business and provide active and ongoing management of the qualifying Canadian business that will create at least one incremental full-time job (37.5 hours per week or more) for Canadian citizens or permanent residents, other than the entrepreneur and their family members. This condition must be fulfilled for a period of one year within the period of three years after the day on which the entrepreneur becomes a permanent resident. This is known in the industry as meeting entrepreneurial terms and conditions.

b. The Quebec Entrepreneur Program

The Quebec program differs substantially from the Federal program.

A Quebec entrepreneur is defined as a foreign national with three years of management experience in a lawful and profitable agricultural, industrial or commercial enterprise and who will establish, acquire or participate in the active management of a lawful and profitable agricultural, industrial or commercial enterprise that will immediately employ three full-time residents of Quebec, other than the foreign national and his accompanying dependants.

To qualify, an applicant must possess a personal net worth of $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.

Like Investor applicants, the definition of management experience is strictly followed and given a narrow interpretation by the Quebec government authorities.

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.

Some Useful Hints (Quebec and Federal)

Processing delays under the Federal program regularly exceeds 2.5 years.

Under the Federal program, applicants who do not own and operate a business cannot qualify. Therefore, the Quebec program is the only option for applicants with high level management experience.

The Quebec program generally offers processing times in the area of 18-24 months to visa issuance.

Under the Quebec program, applicants who are able, can attend coordinate their selection interview in Montreal to coincide with their preliminary market research visit to Quebec. This can further shorten overall processing time.

Quebec applicants are under no obligation to carry out their business project presented during the selection interview. In fact, since the removal of terms and conditions falls under the Federal domain, applicants can operate their Canadian qualifying business in any province.

Although there is no official policy, Quebec authorities seem to give priority to its Investor applicants and this may explain the longer processing time for its Entrepreneur case load.

Applicants who require early entry status may consider alternative methods of entering Canada on a non immigrant basis while waiting for permanent residence processing to conclude.

Applicants who do not plan to remain in Canada on a full-time basis should not even consider applying under the Entrepreneur program.

C. The Self Employed Program

a.. The Federal Self Employed Class

The self employed class is geared towards applicants who have relevant self-employment experience as well as the intention and the ability to create their own employment and make a significant contribution to the cultural, artistic or athletic life of Canada, or to create their own employment by purchasing and managing a farm in Canada.

A successful applicant is one who has at least two years of experience in the period beginning five years before the date of the application and ending on the day a determination is made on the application, in self-employment in cultural activities or in athletics; participation at a world-class level in cultural activities or athletics; or farm management experience.

To qualify, the applicant must demonstrate a sufficient financial net worth which, although somewhat less than an entrepreneur and not specified in the regulations, should enable the applicant to be self-employed in Canada and make a significant contribution to specified economic activities in Canada and to meet the initial settlement requirements for the applicant and accompanying dependants.

b. The Quebec Self Employed Program

Self-employed applicants are assessed in Quebec under a point system. To qualify, the self-employed must have two years of applicable experience, possess a personal net worth of $100,000, have sufficient settlement funding and will come to Quebec to create employment for the applicant by practicing a profession. Successful unmarried applicants must obtain 40 points out of a possible 84 points on pre-selection and 50 points out of a possible 94 points on selection. Married applicants must obtain 48 points out of a possible 101 points on pre-selection and 58 points out of a possible 111 points on selection.

2. Temporary Residence

Applications for permanent residence under the business immigration program often entail processing delays that exceed the expectations and objectives of applicants. Accordingly, alternative solutions promoting early entry, may be available by way of temporary admissions to Canada though the investment immigration route.

Canada admits business immigrants on a temporary basis under the temporary foreign worker program. Qualified applicants include successful business persons who qualify for work permits under investment immigration vehicles supported by applicable International Agreements or that would create or maintain significant economic benefits or opportunities for Canadian citizens or permanent residents. The issuance of a work permit on the basis of investment would depend on the nationality of the applicant and the nature and location of the business in Canada.

Depending on the particular circumstances, applicants may undertake dual assessments of an application for permanent residence and an application for a work permit.

In some cases, it may be practical for an applicant to secure a work permit on behalf of a Canadian business set up as a branch office of an established entity outside Canada, which a good track record. Once the work permit is issued the applicant can then submit an application for permanent residence under a suitable category.