2017 – Wealthy business immigrants are buying business and turning to Ottawa’s temporary work visa, ‘owner-operator’ policies to gain entry to Canada. Opportunities for investment based immigration to Canada is otherwise limited. Current federal permanent immigration programs although operational on paper, are not attracting interest from foreign investors. The federal government’s Immigrant Investor Venture Capital (IIVC) Pilot Program, offering permanent residence to ultra high net worth individuals, is practically non-existent according to the current Ambassador to China and former federal immigration minister John McCallum.
Similarly, the federal Start-Up Visa Program also offering permanent residence and a work visa aimed at mid-level net worth entrepreneurs, has hardly garnered interest since its inception in 2014, with Ottawa refusing to divulge its disappointing numbers.
This leaves a large pool of international investors seeking permanent admission to Canada to compete for a relatively small number of quota based openings under Canada’s provincial business immigration programs. The Province of Quebec dominates this area with its Quebec Immigrant Investor Program, (QIIP). It plans to receive 1900 new applications in 2017 and spots are filling quickly.
First and foremost, an employer must be an entity (person, business, corporation or organization) that makes an offer of employment to a foreign national to perform work for compensation, and for an identifiable term, in Canada. The employer is generally the entity that hires, controls working conditions and remunerates the foreign national. It must be an identifiable entity that will enable government authorities the necessary scope to fulfill its regulatory responsibilities attendant to the administration and enforcement of the Temporary Foreign Worker TFW Program.
To qualify as an owner-operator the foreign employee-investor should be able to establish a level of controlling interest in the business (e.g. a majority or plurality of shares, is not able to be fired) and be actively involved in its operation. Foreigners who do not meet this definition would not qualify for the program exemptions under owner-operator.
In all instances, the transaction must be genuine. To meet such determination, the offer must be made by a foreign employee-investor that will be actively engaged in the management of the business. This will be assessed by reviewing the foreign national’s intention to operate the business as well as prior experience in managing or operating a business.
Ownership of shares does not by itself guarantee that a foreign national qualifies as an owner-operator. Additionally, the sale and purchase of shares in an existing Canadian entity by a foreign national will require immigration approvals and will likely be conditional to the issuance of the work permit. The transaction will often therefore be strategically carried out in stages to meet both immigration and commercial practices. Consideration must therefore be given to a variety of instances, including fully completed purchases, pending complete purchases and partial purchases of the Canadian enterprise by the foreign employee-investor.
Current policy requires that “an employer/employee relationship must be clearly identified to permit regulatory responsibilities in the administration of the Temporary Foreign Worker Program.
In cases where a self-employed individual intends to enter Canada to establish or purchase a business and be involved in its day-to-day operations, the business plan and contract to purchase shares in the business must establish an employer/employee relationship with an offer of employment.
Therefore, in the absence of a job offer as in most TFWP cases, the case officer looks at the foreign worker’s business plan or share purchase contract to assess the strength of the case. The factors being considered during this evaluation are those mentioned above, i.e. will the foreign worker’s presence in Canada create or retain jobs for Canadians, or transfer skills or knowledge to Canad