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Canadian Entrepreneur Immigration

Written by Henry J. Chang
Updated June 26, 2011
NOTICE: On June 24, 2011, Citizenship and Immigration Canada ("CIC") announced that it would be imposing a temporary moratorium on new applications filed under the Federal Entrepreneur Program. Although revised Ministerial Instructions have not been published yet, it is expected that the moratorium will be in effect as of July 1, 2011

The entrepreneur category is similar in many respects to the E-1 and E-2 non-immigrant visas under U.S. law. However, an approval under the entrepreneur category confers permanent residence upon the applicant rather than a temporary visa.

Requirements

General

In order to qualify as an "entrepreneur" under Canadian immigration law, the applicant must:

  1. Have the required business experience;

  2. Have a legally obtained net worth equal to or greater than a minimum of $300,000 CAD; and

  3. Provide a written statement to an officer that he or she intends to and will be able to meet conditions set out in Section 98 (1) of the Immigration and Refugee Protection Regulations ("IRPR").

Each of these requirements is described in greater detail below.

Business Experience

The IRPR specifically defines "business experience" as:

The management of a qualifying business and the control of a percentage of equity of a qualifying business for at least 2 years in the period beginning five years before the date of the application for a permanent resident visa and ending on the day a deterimination is made in respect of the application.

The business experience definition for an enterpreneur applicant is more restrictive than an investor. Under the investor definition an applicant's business experience means:

  1. The management of a qualifying business and the control of a percentage of equity of a qualifying business; or
  2. The management of at least five full-time job equivalents.

The second part of this definition (the management of at least five full-time job equivalents) does not apply to the entrepreneur category. As such, a manager that oversees 100+ employees but does not own a percentage of equity in the business will not meet the definition of "business experience".

Net Worth

The applicant must have a net worth of $300,000.00CAD and these assets must have been legally accumulated. In the past, the applicant's net worth had to be acquired through the applicant's business endeavours. Assets acquired as a gift, an inheritance, or from the division of marital property would not qualify. However, this does not appear to be a requirement under the new regulations.

In addition, the applicant may include their spouse or common law partner's assets in the determination of net worth.

Section 98 of the IRPR - Establishment of a Qualifying Business in Canada

An entrepreneur must provide a written statement to an officer that he or she intends to and will be able to meet the conditions referred to in Subsection 98 (1) of the IRPR. Subsection 98(1) contains the following requirements:

  1. The entrepreneur must control a percentage of the equity of a qualifying Canadian business equal to or greater than 33-1/3%.
  2. The entrepreneur must provide active and ongoing management of the qualifying Canadian business; and
  3. The entrepreneur must create at least one full-time job equivalent (defined as 1,950 hours of paid employment) for Canadian citizens or permanent residents, other than the entrepreneur and his or her family members.
  4. The entrepreneur must meet the conditions for a period of at least one year within the period of three years after the day on which the applicant becomes a permanent resident

The term "qualifying Canadian business" is defined as a business operated in Canada by an entrepreneur other than a business primarily for the purpose of deriving investment income, such as interest, dividends or capital gains for which there is in any year within the period of three years after the day the entrepreneur becomes a permanent resident documentary evidence of any two of the following:

  1. The percentage of equity multiplied by the number of full time job equivalents is equal to or greater than two full-time job equivalents per year;
  2. The percentage of equity multiplied by the total annual sales is equal to or greater than CDN $250,000;
  3. The percentage of equity multiplied by the net income in the year is equal to or greater than CDN $25,000; and
  4. The percentage of equity multiplied by the net assets at the end of the year is equal to or greater than CDN $125,000.

Intention and Active Participation in the Management of the Business

The entrepreneur must plan to manage the business. A passive investor in a business would not qualify under this category. For the same reason, a passive investment would probably not satisfy the management requirement.

The applicant does not have to show a proven track record as a manager in a successful business. However, the applicant should at least have some relevant experience in order to convince the visa officer that he or she has the requisite ability and intent to participate in the management of the business.

Selection Criteria

Entrepreneur-applicants are generally assessed under the same criteria as "independent" applicants (for additional information regarding the selection criteria for independent applicants, please refer to our article on independent applicants.) However, entrepreneur applicants need obtain thirty-five units (35) of assessment.

In addition to obtaining at least thirty-five units of assessment, entrepreneur applicants (and their dependents whether accompanying or not) must not be otherwise inadmissible.

Provincial Nomination

Most provinces in Canada have an agreement with the Government of Canada that allows them to play a more direct role in selecting immigrants who wish to settle in that province. Applicants who wish to immigrate to one of Canada's provinces as a Provincial Nominee, must first apply to the province where they wish to settle. The province will consider the application based on their immigration needs and the applicant's intention to settle there. Provincial Nominees are not assessed on the selection criteria mentioned above.
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