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Canada Immigration:
Canadian Immigrant Investor Program

Written by Henry J. Chang
Updated June 26, 2011
NOTICE: On June 26, 2010, Citizenship and Immigration Canada ("CIC") published proposed regulations in the Canada Gazette, which will increase the personal net worth and investment amounts utilized by the Canadian Federal Immigrant Investor Program. Under the proposed regulations, the investment required under the program will increase from $400,000.00CAD to $800,000.00CAD. In addition, the personal net worth required to qualify under the Program will increase from $800,000.00CAD to $1.6 Million CAD. Once the comment period has ended, the final regulations will be published and these higher investment and personal net worth amounts will become effective.

CIC also published Ministerial Instructions in the Canada Gazette, which has created an "administrative pause" from June 26, 2010 until the date that the final regulations become effective. According to the Ministerial Instructions, no applications under the program will be accepted unless they are post-marked or received by CIC before June 26, 2010. No subsequent applications will be accepted until the final regulations become effective. The objective of this "administrative pause" is to mitigate the growing surge in such applications under the current investment and personal net worth levels.

According to CIC, a net worth of $800,000CAD in 1999 was considered substantial enough to attract applicants with the financial wherewithal and expertise to make a significant positive economic contribution to Canada. Due to increasing global wealth, a net worth of $800,000 is now within easy reach of a modest property owner in a large city, who may not have other transferable resources as originally envisioned. In addition, CIC states that most other countries with similar programs now require an investment closer to $1 Million CAD. It therefore feels that the program has become underpriced on the international market. CIC wishes to increase the investment amount to $800,000.00CAD for this reason.

CIC has indicated that the current net economic benefit to Canada from each investment made under the program is only $59,229.00CAD due to the requirement to repay the investment after five years. It estimates that, under the new investment level, the net economic benefit to Canada will increase to approximately $89,000.00CAD.

On June 24, 2011, CIC announced that is imposing an annual cap of 700 on all new applications under the Canadian Federal Immigrant Investor Program. According to the announcement, the annual cap on new applications will allow for progress on backlog reduction while ensuring that CIC has a sufficient volume of new files to meet its commitments.

Introduction

The Canadian Federal Government administers the Federal Canada Immigrant Investor Program. In addition, the provinces also have the ability to select immigrants under their Provincial Nominee Program, which often includes an investor category. Each of these programs is discussed below.

The Federal Immigrant Investor Program

Definition of Investor

Subsection 88(1) of the Immigration and Refugee Protection Regulations, (SOR/2002-227) ("IRPR"), defines the term "investor" as a foreign national who:

  1. Has business experience;
  2. Has a legally obtained net worth of at least $800,000; and
  3. Indicates in writing to an officer that they intend to make or have made an investment.

Investment

According to IRPR 88(1), the term "investment," in respect of an investor, means a sum of $400,000 that:

  1. In the case of an investor other than an investor selected by a province, is paid by the investor to the agent for allocation to all approved funds in existence as of the date the allocation period begins and that is not refundable during the period beginning on the day a permanent resident visa is issued to the investor and ending at the end of the allocation period; and
  2. In the case of an investor selected by a province, is invested by the investor in accordance with an investment proposal within the meaning of the laws of the province and is not refundable for a period of at least five years, as calculated in accordance with the laws of the province.

Business Experience

In respect of the Federal Investor Program, IRPR 88(1) specifically defines the term "business experience" as a minimum of two years of experience consisting of:

  1. Two one-year periods of experience in the management of a qualifying business and the control of a percentage of equity of the qualifying business during the period beginning five years before the date of application for a permanent resident visa and ending on the day a determination is made in respect of the application;
  2. Two one-year periods of experience in the management of at least five full-time job equivalents per year in a business during the period beginning five years before the date of application for a permanent resident visa and ending on the day a determination is made in respect of the application; or
  3. A combination of a one-year period of experience described in subparagraph (i) and a one-year period of experience described in subparagraph (ii).

The above regulations specifies three criteria that must be satisfied before work experience will be accepted by the immigration officer: (a) experience with a qualifying business, (b) for the required period of time, (c) in a managerial role. Each of these criteria are described in greater detail in the regulations.

Qualifying Business

IRPR 88(1) defines the term "qualifying business" as a business (other than a business operated primarily for the purpose of deriving investment income such as interest, dividends or capital gains) for which, during the year under consideration, there is 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 $500,000;
  3. The percentage of equity multiplied by the net income in the year is equal to or greater than $50,000; and
  4. The percentage of equity multiplied by the net assets at the end of the year is equal to or greater than $125,000.

Required Period of Time

As stated in the regulations, for the applicant's business to count, it must have been accumulated during at least two years in the five-year period before the date of application or decision.

The investor's role in the business must have been either:

  1. Management and control of a percentage of the equity of the qualifying business as shown in the following table:
  2. AttributePercentage of Equity Controlled by Applicant
    100%50%33.3%
    Employment246
    Total Annual Sales$500,000.00CAD$1,000,000.00CAD$1,500,000.00CAD
    Annual Net Income$50,000.00CAD$100,000.00CAD$150,000.00CAD
    Net Assets at Year-End$125,000.00CAD$250,000.00CAD$375,000.00CAD

  3. Management of five full-time job equivalents (each job equivalent is 1,950 hours of paid employment per year). The management experience must be in business.

Net Worth

The applicant must have a net worth of $800,000.00CAD and these assets must have been legally accumulated. However, other than the investment itself, there is no requirement that these assets be transferred to Canada. The applicant may include the assets of their spouse, common-law partner, or conjugal partner in the determination of the net worth.

Under the old regulations, 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.

The Investment

Applicants may make their $400,000.00CAD investment any time after an application has been submitted. However, payment will not required until immediately prior to visa ssuance when all other immigration matters have been resolved.

According to Section 8.1 to Chapter 9 of the Overseas Processing Manual, the investor must pay the $400,000.00CAD to the Receiver General for Canada before a visa will be issued to the foreign national. This is done by wire transfer to Citizenship and Immigration Canada ("CIC"). Before visa issuance, the immigration officer must receive verification from CIC in Ottawa that the wire transfer has taken place.

The investor is not entitled to withdraw his or her capital from the fund for a period of five years. The date of repayment depends on the date that CIC receives the investment. At the earliest

Timing of the Investment

Applicants are not required to deposit their investment until the eve of visa-issuance. Thus, they may identify a fund prior to interview but defer making the full investment until after a visa-officer has approved them, subject only to confirmation from the fund that they have made the full investment.

After entering issuance of the visa, the investor may not withdraw the application until the holding period has run its course. However, those wishing to withdraw the application prior to issuance of the visa may notify CIC in Ottawa and will receive a refund of their $400,000.00CAD within 90 days of the request. If the investor has made an investment and the visa is refused, the investor will be advised and the investment will be refunded within 90 days of a request for refund.

Investors will be repaid by Ottawa after the hold period has ended. The date of repayment depends on the date that CIC receives the investment. At the earliest, this will be in five years and two months from the date of receipt. At the latest, it will be five years and three months from the date of receipt.

Financing Arrangements

The Federal Immigrant Investor Program does not allow the investor to borrow the investment funds on an unsecured basis. Howeer, the investor may use the investment as collateral to secure a loan from a private lender.

Selection Criteria

Investor applicants are only required to obtain 35 points of assessment out of a possible 100 points. The following tables outline the selection criteria applicable to investors:

Business Experience*Maximum 35
Five years business experience35
Four years business experience30
Three years business experience25
Two years business experience20
*Within 5 years preceding the date of the application. Any additional experience gained in the period prior to the selection decision is to be counted.

AgeMaximum 10
21 - 49 years of age at time of application10
Less 2 points for each year oer 49 years of under 21 years

EducationMaximum 25
Doctorate or Master's Degree + 17 years of full-time or full-time equivalent studies25
3-year Trade Certificate or LLB or Medical Degree +15 years of full-time or full-time equivalent studies22
Bachelor's Degree or 2-Year Trade Certificate + 14 years of full-time or full-time equivalent studies20
Bachelor's Degree or 1-Year Trade Certificate + 13 years of full-time or full-time equivalent studies15
1 year post-secondary + 12 years of full-time or full-time equivalent studies12
Secondary school education5

Official LanguagesFirst LanguageSecond LanguageMaximum 24
High Proficiency168Maximum 24
Moderate Proficiency88Maximum 16
Basic Proficiency22Maximum 4
No Proficiency000

AdaptabilityMaximum 6
Business exploration trip to Canada within 5 years of application6
Participation in designated joint federal-provincial business immigration initiatives6

In addition to obtaining at least 35 points of assessment, investor applicants (and their dependents whether accompanying or not) must not be otherwise inadmissible and they must establish that they are bona fide immigrants within the meaning of "immigrant" as defined by the Immigration and Refugee Protection Act ("IRPA").

Immigrant Investors under the Quebec Immigration Program

The Province of Quebec administers its own investor program, which has been extremely popular. This is because visa processing under the Quebec Immigration Program is generally much faster than the Federal Immigrant Investor Program.

To be eligible for this program, the following criteria apply:

  1. The investor must have a net worth of least $800,000.00CAD, acquired through lawful economic activities;
  2. The investor must have a minimum of three years of management experience acquired over the course of the 10 years preceding the application for a Québec Selection Certificate, in a profitable and legal business, in government or in an international organization. The term "management experience" is defined as the actual and full-time assumption of the responsibilities and duties related to the planning, management and control of material, financial and human resources, provided that such responsibilities and duties are not assumed in the context of an apprenticeship, training or specialization process attested to by a diploma. The terms "full-time" means that the person devoted all of his or her working time to management during the period in question.
  3. The investor must sign an investment agreement, undertaking to invest $400,000.00CAD, with a financial intermediary (broker or trust company) authorized to participate in the Quebec Investor Program.

The $400,000CAD investment from the applicant is invested in a term note guaranteed by the Government of Quebec and a portion of the interest earned on the investment is paid out to eligible Quebec corporations in the form of grants. The Quebec investor program contributes to the economic development the province in this manner. The $400,000CAD investment is locked in for a period of five years.

Unlike the Federal Immigrant Investor Program (which does not permit the investor to borrow the investment funds on an unsecured basis), the Quebec Investor Program permits the investor to borrow up to 70% of the $400,000.00CAD investment on an unsecured basis. Therefore, an investor in the Quebec Immigration Program may invest as little as $120,000.00CAD and borrow the remainder of the $400,000.00CAD investment without providing security for the loan.

The Quebec Immigrant Investor Program tends to be stricter than the Federal Immigrant Investor Program in terms of its requirement that the investment funds be acquired through lawful economic activities. In many countries, potential investors may have trouble documenting the lawful source of their investment funds. In such cases, the Quebec Immigrant Investor Program may not be the best option.

Immigrant Investors under the Provincial Nominee Program

Following Quebec's lead, other provinces in Canada now have agreements with the Government of Canada that allow 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.

Because each province establishes its own selection criteria, applicants interested in seeking permanent residence as an investor under one of the Provincial Nominee Programs should review the selection criteria for that particular province.

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