The Investor Program

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.

The Entrepreneur Program
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:

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

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

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.

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:

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:

Failure to establish a Canadian qualifying business can result in the deportation of the applicant and landed dependents.

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 dependents.