On February 11, 2014, Economic Action Plan 2014 announced the Canadian Government intends to terminate the Immigrant Investor Program (IIP) and Federal Entrepreneur Program (FEP) in order to adopt new pilot programs specifically targeted to meeting Canada’s labour market and economic needs. The IIP program allowed potential immigrants with business experience, high net worth and cash to make a guaranteed, interest free investment to the Canadian government in exchange for permanent resident. The FEP allowed experienced business people to come to Canada for the purpose of owning and managing a business that would create jobs and contribute to the economy. However, the programs were not providing sufficient long-term economic benefit to Canada and therefore will be replaced with more targeted programs.
While the IIP program did not allow a foreign investor to choose where the money went, the FEP program allowed potential immigrants with business experience to buy into and become a manager of qualifying businesses as a path to residency. It also allowed Canadian businesses to benefit from foreign investment and expertise through partnership with foreign entrepreneurs looking to relocate to Canada. Without the FEP, the question is what other options are available for attracting qualified foreign nationals looking to relocate to Canada permanently?
Entrepreneur Start-Up Visa:
One option for residency through foreign investment is the Entrepreneur Start-Up Visa. The Start-Up Visa, originally designed as a pilot program, grants permanent residency to immigrant entrepreneurs while assisting them to become established in Canada. Successful applicants partner with private sector organizations in Canada to receive funding, guidance, and expertise in operating a successful business in Canada. In order to be eligible for a Start-Up Visa, an applicant must show:
- the business venture or idea is supported by a designated venture capital fund, designated angel investor group, or designated business incubator (as listed on the CIC website) by submitting a letter of support showing the minimum investment threshold in one category has been reached
- that you are able to meet the minimum language requirements in either English or French (CLB 5 in all abilities)
- proof of completion of at least one year of post secondary education and that you were in good standing during that year
- proof of sufficient settlement funds determined by the size of your family
In addition to the above criteria, an applicant must show that they plan to reside on a province other than Quebec and they (and any family or dependents) must pass Canadian security and medical clearances. Finally, no more than 5 foreign nationals may apply for permanent residency under the same start-up business plan. In order to prevent fraud, a CIC officer may ask for a peer review of any proposal in order to ensure that it is genuine.
Provincial Nomination Programs:
While the federal Entrepreneur Program has been discontinued, some provinces still offer an avenue to permanent residency through Business Investment Programs. For example, British Columbia requires a minimum net worth of $400,000-$800,000 (depending on location), a minimum investment of $200,000-$400,000 plus 1/3 ownership of an eligible company (once again, location specific), and create 1-3 jobs for Canadians or permanent residents. Applicants sign a performance agreement and arrive in BC on a two-year work permit. Once the performance agreement is fulfilled, they will be nominated for permanent residency.
NAFTA Investor Program:
Under NAFTA, citizens of Mexico and the United States who invest in a new or existing business may be eligible to apply for an investor work permit to manage their business. In order to qualify for the work permit, the NAFTA investor must show that there has been a significant investment and they want to enter Canada for the purpose of developing and directing the business.
New Pilot Programs:
Upon announcing the termination of the IIP and EP programs, the government has indicated there will be new pilot programs for an Immigrant Investor Venture Capital Fund and a new Business Skills Program.
For more information about any of the above entrepreneur categories, please contact www.selkirklaw.ca