Many immigrants gain permanent residence in Canada as skilled workers. Through the immigration programs of the Express Entry system, Canada has done well to address its shortages in labour.
The immigration programs in Canada have always been known to target only skilled workers. Indeed, this is certainly the case for most programs. Be that as it may, Canada’s (immigrant) target audience is as diverse as the country’s population.
There are programs for skilled workers. Other programs aim at family reunification. There are even programs for the most vulnerable sectors like refugees and asylum-seekers.
The Canadian government recognizes how entrepreneurship promotes Canada’s long-term prosperity. Acknowledging the benefits of investment in the country, Canada has also opened business immigration as an option.
There are now programs and streams aimed at those who wish to be both entrepreneurs and permanent residents of Canada. For entrepreneurs, Canada has the Investor Visa.
On an investor visa, business owners and investors could start businesses in Canada. In doing so, investors and business owners could gain permanent residence, as well as generate employment for Canadian citizens and permanent residents.
In short, business people could immigrate to Canada. If you are a business owner who wishes to venture into the Canadian market, read on.
This article is about coming to Canada as an investor.
Active Vs. Passive Investment
Before thinking about “investment” in Canada in exchange for permanent residence, it is important to be clear on the difference between active and passive investment.
In common day parlance, many think of investment as the practice of making a deposit and waiting for its returns. Within the context of Canadian business immigration, many prospective applicants think the same way. Many think that all that is required is an investment of money or financial assets.
However, this form of investment is “passive”. In other words, this is merely turning a business in Canada into a passive source of income. For business immigration in Canada, this is not allowed. A business in Canada that an investor has either purchased or started cannot be used as a passive source of income.
Instead, the Canadian government requires investors to “actively” participate and invest in the businesses to which they have allocated assets. Once an investor purchases or starts a qualifying business in Canada, he or she needs to be physically present to operate and manage the business.
In this sense, investment in a business in Canada needs to be “active”. This is a requirement for permanent residence. Hence, if you wish to start a business, you need to consider whether you are willing to stay in Canada to manage and operate it.
The Immigrant Investor Program
The Canadian government launched the Immigrant Investor Program sometime in 1986. The program was launched to attract more migrant investment into Canada. As a requirement, applicants of this program needed to prove a net worth of 1.6 million CAD. With this net worth, it becomes clear that this is an immigration program for the business class.
The Immigrant Investor Program also required candidates and applicants to have managerial experience (NOC skill level 000). As well, the managerial experience should be at least two years at the time of application. It should also be in a qualifying business. In the past, qualifying businesses were those in the following industries:
- Professional services
Besides having a net worth of 1.6 million CAD and managerial experience, a candidate would also need to make a substantial investment. This investment was in the form of an interest-free loan to the Canadian government, which is payable after five years from the date of investment. During the Immigrant Investor Program’s heyday, the minimum required investment was at least 800,000 CAD.
These were the requirements for investors who wished to be permanent residents of Canada. Needless to say, these investors needed to be present in the country as they operate their businesses.
Throughout the 26 years of its availability, the Investor Immigrant Program has drawn much criticism. Due to the lofty requirements for net worth and minimum investment, it is easy to see that the program catered mainly to the upper classes.
While in effect, the Immigrant Investor Program attracted numerous investors from mainland China and Hong Kong. This has led to widespread negative perceptions about the program. To the average Canadian citizen and permanent resident, the Immigrant Investor program appeared as a way for foreign nationals to “buy” their way past the immigration process.
This was perceived by many in the country as unfair. Also, it was seen to go against the guiding principles of equality on which the points-based system of Canadian immigration was based.
Ordinary permanent residents and Canadian citizens were not the only detractors of the Immigrant Investor Program. Due to a series of amendments on eligibility requirements, the program also received flak from prospective investors who wanted to be permanent residents.
From its inception in 1986 until 2009, the required net worth stood at 800,000 CAD with the minimum investment requirement set at 400,000 CAD (minimum). In 2010, the Canadian government raised the requirements for both amounts by as much as 100%. This led to the 1.6 million CAD and 800,000 CAD requirements for net worth and minimum investment, respectively.
This amendment to the eligibility requirements led to a reduction in the number of applicants under the program. As a result, the Investor Immigrant Program brought in lesser investors.
Closure Of The Immigrant Investor Program
No longer the popular stream for business immigration in Canada, the Government of Canada decided to close the program. This decision was made in 2012 when the moratorium for the program’s closure was issued.
On June 19, 2014, the government of Canada issued the Economic Action Plan 2014 Act. The Act officially closes two immigration programs for business immigration. Besides the Federal Entrepreneur program, the Immigrant Investor Program was also closed.
Nevertheless, the IRCC acknowledged the backlog of applications for the program. Hence, business investors whose applications were made before February 11, 2014 would still be admitted. Applications made after June 19, 2014 were terminated. The IRCC also issued refunds to a number of applicants.
In short, the Immigrant Investor Program is now closed. At the time of writing, the IRCC no longer issues Investor Visas under the program.
Alternatives For Business Immigration To Canada
Now, you know of the Immigrant Investor Program’s termination by the IRCC. You might then be wondering if there are still ways for business people or investors to be permanent residents of Canada.
Luckily, despite the shortcomings of the Federal Entrepreneur Program and the Immigrant Investors Program, the Canadian government still sees much value in the contributions of business activity in the country- especially from foreign nationals.
The Start-Up Visa program is one way for business owners to start a business in Canada. This would allow self-employed investors to be permanent residents in Canada. The Start-Up Visa Program is covered in a different article.
If you wish to be a permanent resident who owns a business, there is one more way.
For many skilled immigrants, the Provincial Nominee Program has been the easy-breezy route towards permanent residence. Even applicants enrolled in the Federal Express Entry system benefit from the instant 600 CRS points a provincial nomination adds to an application.
Every Canadian province or territory has its own Provincial Nominee Program. Every Provincial Nominee Nominee program leads to a provincial nomination and this makes immigration to Canada faster and almost guaranteed.
Each Provincial Nominee Program has different immigration streams or categories under which eligible applicants could apply. There are numerous categories and streams for skilled workers, semi-skilled workers, and unskilled workers. Other Provincial Nominee Programs like those of Manitoba, Saskatchewan, British Columbia, and Ontario have streams for graduates and international students.
The provincial nominee programs of the different Canadian provinces and territories also have business immigration streams. Applying under these entrepreneurial streams may not lead to an investor visa.
Nevertheless, qualifying for a business or investor stream of a provincial nominee program leads to a nomination. This nomination leads to permanent residence while owning and operating a business in a Canadian province.
Common Eligibility Requirements Of PNP Business Immigration Streams
As you may imagine, a business immigration stream of one provincial nominee program will be different from that of another provincial nominee program.
Despite the differences, all business immigration streams share several characteristics. These common characteristics are their eligibility requirements.
An Approved Business Plan
Part of the application for almost all PNP business immigration streams is a business plan. Often, the plan must have comprehensive details on the following:
- Sector or industry
- Planned investment
- Labour arrangements
- Financial projections
- Overhead costs
These are just some details. Other provinces will have additional requirements for the contents of a business plan. For most, the new business must provide full-time employment for at least one Canadian citizen or permanent resident.
Candidates or applicants present the business plan in an interview conducted by the province’s immigration office or authority. Once approved, the plan will receive the support of the provincial government. This support is documented in a letter of support, which is one of the documents needed to start a business.
One of the requirements for any PNP business immigrant stream is a minimum investment in a business. The business must be in the province from which you are seeking a provincial nomination. The investment may be for a business you are purchasing or one that you plan on starting.
In different provinces, the minimum required amount varies. As well, you could expect differences based on location. For instance, the Ontario Immigrant Nominee Program’s Entrepreneurial Stream requires different minimum investments based on location. The minimum investment for a business within the Greater Toronto Area or GTA will be higher compared to those closer to the suburban and rural parts of Ontario.
Applicant’s Net Worth
There is also a minimum requirement for an applicant’s net worth. An applicant must prove his or her net worth by submitting documents that prove assets and liabilities. This is different for each province although the average minimum net worth is around 600,000 CAD. This is the minimum required net worth for:
- British Columbia
- Nova Scotia
In almost all Canadian provinces or territories, third-party financial institutions in Canada must issue proof of net worth. This cannot be done in an applicant’s home country. As well, it must be clear that an applicant’s assets were all legally and lawfully acquired.
In some provinces like Alberta, Saskatchewan and Manitoba, part of the amount that makes up an applicant’s net worth should be ready for liquidity. In other words, some of an applicant’s financial assets need to be in the form of money so that it could be spent.
Proving net worth is done with documents required by a province. In some provinces or territories in Canada, the requirements for proving net worth will also vary depending on the applicant’s country of origin. One example is the Nova Scotia Nominee Program’s Entrepreneur Stream.
Managerial Or Business Experience
All business immigrant streams under the different PNP programs will require you to show managerial or business experience. While there are differences, most provinces will require two years to five years. This is the case for the entrepreneurial streams of the PNPs of:
- Prince Edward Island
- British Columbia
- Newfoundland and Labrador
Hence, if you plan to invest in or start a new business in these provinces, you need to have at least two years of senior management experience in managing or operating a business.
Desire To Live In The Province Or Territory
Applying for a provincial nomination is an “expression of interest” to the province or territory. In applying, you are expressing that you intend to live in that particular province or territory.
It is not possible to seek provincial nomination for one province then live in a different one. For a PNP entrepreneurial stream, it must be clear that you intend to live and do business in the province or territory.
Clearly, the simple act of applying is an expression of your intentions.
Active Investment And Participation
This ties in with the previous requirement.
As mentioned earlier, investors and business owners need to be present in the country. They need to operate their businesses in the province from which they want the provincial nomination for permanent residence. Needless to say, this involves being present in the province.
This way, the purchased or started business does not become a “passive” source of income. A foreign investor or business owner must physically be present in the province to manage and operate the Canadian business.
Since these investors or business immigrants do not have permanent resident status yet, they will be in the province on a work permit. The duration of the work permit depends on the amount of time applicants are expected to manage or operate a business.
To illustrate, Manitoba’s Entrepreneur Pathway requires foreign investors and business owners to operate a business in Manitoba for 12 months. After successful operation, the province nominates the business owner or investor to IRCC for permanent residence.
For the 12 months that the applicant is expected to operate the business, the province gives a work permit that is valid for 12 months as well.
For Passive Investment: The Quebec Investor Immigration Program
Earlier, it was established that investment in a Canadian business must be active. It must be active in the sense that the principal applicant (who purchases or starts the business) must be present in the province operating or managing the business.
In short, for many Canadian provinces, there is no provincial nominee program or immigration program that will allow passive investment.
However, Quebec is different. At the time of writing, it is the only province that allows investors to invest passively. Unlike in other Canadian provinces or territories, foreign investors or business owners could invest in a business in Quebec without being managing or operating the business.
The immigration program for business immigration in Quebec is the Quebec Investor Immigration Program. To be eligible, there are requirements.
For Quebec, an applicant needs to have a net worth of at least 2 million Canadian dollars. This must have been legally acquired and should not include recently given donations or monetary gifts.
The net worth of 2 million Canadian dollars may be that of the principal applicant. It may also be the combined net worth of both the principal applicant and his or her:
- De facto spouse
- Conjugal partner
At the time of writing, the government of Quebec requires applicants of the Investor Program to invest 1.2 million Canadian dollars in the province. The investment must be made to Investissement Québec – Immigrants Investisseurs Inc.
The amount is quite high. The reason for this is that the investment is used to fund two business assistance programs in Quebec. These business assistance programs are the:
- Business Assistance- Immigrant Investor Program
- Employment Integration Program For Immigrants and Visible Minorities
Both business assistance programs promote entrepreneurship in the province. It also generates employment for the province’s residents and citizens.
The initial investment is paid back or reimbursed to the applicant after five years. At the end of the five-year mark, the investment firm or broker through which the investment was made will have 30 days to give the reimbursement.
Once this is done, the investor or business owner can now be a permanent resident of Quebec.
Senior Management Work Experience
An applicant should have at least two years of managerial experience. The length of experience must be within 5 years before the date of application.
As well, the applicant must show that his tasks included the following:
- Planning of operations
- Management of staff
- Control and management of a company’s finances (i.e. finances within one’s authority)
Attestation Of Learning About Quebec’s Democratic Values
This is a new requirement for the immigration process of Quebec. The Quebec government mandated the attestation of learning about Quebec’s values on the first of January 2020.
Under the mandate, all applicants for Quebec’s immigration programs need to participate in the province’s Objectif Intégration session. You could think of it as a course that introduces you to the democratic values and history of Quebec.
There is an online assessment that follows. Think of it as something similar to the Canadian Citizenship test.
If you have dependents over the age of 16 accompanying you, they also need to submit the attestation of learning.
Although you could use English or French in Quebec, you will likely score more points for displaying proficiency in French. For business immigration to the province, the minimum required score for French language proficiency is CLB 7. The following are the approved tests for French language proficiency:
- Test d’évaluation du français adapté pour le Québec (TEFAQ)
- Test de connaissance du français pour le Québec (TCF-Québec)
- Test d’évaluation du français (TEF),
- Test d’évaluation du français pour le Canada (TEF Canada)
- Test de connaissance du français (TCF)
- Diplôme d’études en langue française (DELF)
- Diplôme approfondi de langue française (DALF)
For English proficiency, the minimum required score is CLB 5. The following are the acceptable tests for English proficiency:
- Canadian English Language Proficiency Index Program (CELPIP)
- International English Language Testing System (IELTS)
There is a visa for almost every group that wishes to immigrate to Canada. For business owners, there was the Immigrant Investor Visa that is currently no longer being issued by the IRCC.
Nevertheless, there are still a number of ways for business immigrants to immigrate to Canada. You could still immigrate to Canada as an investor. You could either apply for Canada’s Start-up Visa. Or, you could do what most foreign entrepreneurs have. You could apply for a provincial nomination.
With a provincial nomination, you could run and operate a business in Canada on a work permit. This eventually gives you a nomination from your province, making you a permanent resident.
On the other hand, if you favour a more passive approach to your business immigration, there is always Quebec.