Canada offers a strong and stable business environment, along with an immigration regime that is transparent and relatively predictable. Given this situation, foreign business people and entrepreneurs may find Canada to be an attractive destination if they are considering setting up a business internationally.
Set out below are some of the potential immigration options for foreign business people and entrepreneurs.
Canadian federal government permanent resident categories
While Canada's provinces have Permanent Resident (PR) programs for entrepreneurs (see information below), the federal government does not currently have either an investor or an entrepreneur PR category.
However, business people may sometimes be eligible to apply for Canadian permanent resident status under a federal skilled worker category.
Canada's Express Entry permanent resident regime is based on a points system. Applicants are assessed under factors such as age, education, work experience and language ability. Candidates with enough points are invited to apply for PR status. One of the requirements under Express Entry is that the principal applicant must take and pass a mandatory English or French language test.
Business people sometimes first come to Canada under a work permit and then transition to PR status as a skilled worker. Obtaining at least one year of full-time skilled work experience in Canada also provides more points under the Express Entry system. Some applicants need to gain those points to have enough points to be invited to apply for PR status under the Express Entry system.
There are a number of work permit options that may be available. For example, if the applicant has been employed full-time by a foreign company outside of Canada for more than 12 months and is transferred to a related company in Canada, then they may be able to obtain an intra-company transferee work permit. Some entrepreneurs may be able to apply for an owner/operator Labour Market Impact Assessment (LMIA) to obtain a work permit, where the entrepreneur owns 50% or more of the Canadian entity.
The corporate ownership structure of the Canadian entity and, if applicable, its ownership relationship to the foreign company that employs the applicant outside of Canada, is important as this may affect both work permit and PR options. Before setting up a business in Canada, consider getting advice from an immigration lawyer regarding whether the structure will support immigration options.
Canada also has a Start-up Visa Program that may sometimes be used to obtain permanent resident status and a work permit while the permanent resident application is pending. The program has very specific rules regarding the ownership and shareholding structure that a qualifying start-up visa business must have to be eligible. It also requires the immigrant entrepreneur to obtain the support and sponsorship of a designated Canadian venture capital fund, angel investor or business incubator.
Provincial nominee programs
Canada's provinces and territories have PR programs, called Provincial Nominee Programs (PNPs). Some PNPs are aimed at entrepreneurs. Each PNP has its own unique set of requirements.
If someone is granted a PNP nomination, it can be used to obtain a work permit to work in Canada, and eventually PR status if the conditions of the program are met.
To use a specific entrepreneur PNP, the applicant must intend to reside in that province and must operate a qualifying business in that province. A detailed business plan is usually required.
While each PNP entrepreneur program has its own set of eligibility requirements, generally each program requires the following:
- The applicant must have prior qualifying business experience
- The applicant must have at least a minimum net worth, legally obtained, which will need to be verified by an independent accounting firm designated by the province
- The applicant must invest a substantial minimum amount in a qualifying business in the province and/or must own a prescribed percentage of the qualifying business
- The qualifying business in Canada must meet PNP eligibility requirements, as some types of businesses are prohibited
- The applicant must reside in the province and must actively manage the day to day operations of the qualifying business in the province
- The qualifying business in the province must create employment for Canadians or Canadian permanent residents
- A performance agreement is usually required, and a nomination will be conditional on the applicant proving that the PNP requirements have been met
- PNPs may have other requirements such as requiring an exploratory trip to the province, proof of language ability and/or maximum age limitations.
The requirements of the particular entrepreneur PNP must be carefully assessed before applying for a PNP. Links to the various PNPs can be found at this IRCC website page: Provincial Nominee Programs. Note that the requirements of any of these programs may be changed without notice.
Quebec investor and entrepreneur categories
The province of Quebec has its own immigration system. If a foreign national intends to reside in Quebec, they must apply for permanent resident status under the Quebec system. Someone intending to reside in Quebec would not be able to use the federal Express Entry system.
Quebec offers Investor and Entrepreneur categories, as well as a skilled worker category.
Under the Quebec Investor Program, the applicant must have a net worth of at least $2,000,000, obtained legally. They must have business management experience in a qualifying business for at least two years in the five years prior to the application. They must provide an investment of $1,200,000 to the Quebec government for a five year term. The Quebec Investor category does not require an applicant to start or manage a business in Quebec. This is the only PR program within Canada that only requires a passive investment to be made.
The Quebec Entrepreneur Program is broadly similar to other provincial entrepreneur programs. Applicants must meet net worth criteria and must be involved in an eligible business in Quebec that meets certain criteria. The applicant must manage the day-to-day operations of the business in Quebec.
An applicant's family members (spouse and dependent children) can gain permanent resident status if the principal applicant is granted PR status. A dependent child is a child of the applicant who is under 22 years old at the time the permanent resident application is filed, and who does not have a spouse or common-law partner.
Maintaining permanent resident status
If someone becomes a permanent resident of Canada, that person must meet a residency requirement to maintain PR status. The general rule is that a PR must be physically present in Canada for 730 days out of any 5 year period after becoming a permanent resident to meet the residency requirement. The 730 days of physical presence inside Canada do not have to be consecutive.
Eventually, a permanent resident of Canada may become eligible to apply for Canadian citizenship. Citizenship is required to obtain a Canadian passport. To be eligible for citizenship, a permanent resident must accumulate at least 1095 days (3 years) of physical presence in Canada in the 5 years prior to applying for citizenship. In addition, the person must have filed income taxes in Canada for at least 3 years in the 5 years prior to applying, if they were required to do so. Applicants between 18 and 54 years of age must pass a citizenship test and must demonstrate adequate knowledge of English or French. Further information on eligibility for citizenship may be found here: Eligibility Information for Citizenship from IRCC.
This is a general overview of some of permanent resident options for business people and entrepreneurs. Anyone considering entering Canada for business purposes, or making a permanent resident application, should obtain legal advice so that their specific situation can be assessed and the options reviewed.
Gowling WLG, with offices located across Canada and globally, is well positioned to provide strategic legal advice to individuals and companies wishing to do business in Canada. In addition to providing expertise relating to immigration and entry strategies, those seeking to enter or move to Canada may also require other legal services that can be provided by Gowling WLG including advice on corporate structure, tax, transfer pricing, employment law and intellectual property law. Gowling WLG's Guide to Doing Business in Canada provides general information on various considerations.