Immigrating to Canada as an Entrepreneur

To qualify as an entrepreneur, you must have business experience. This means that you must have managed and controlled a percent of equity of a qualifying business. Entrepreneurs must have a legally obtained net worth of at least CDN $300,000.

When you immigrate to Canada as an entrepreneur, you must have the intention and the ability to control a percentage of equity of a qualifying Canadian business. You must provide active and ongoing management of the qualifying Canadian business. Your business must create at least one new full-time job for a Canadian citizen or permanent resident. You must meet these requirements within three years of becoming a permanent resident.

Before your immigrant visa is issued, you are required to sign a statement that you intend and will be able to meet the conditions of permanent residence.

Requirements for entrepreneurs

To be eligible for immigration as an entrepreneur, an applicant must:

1. have managed and controlled a percentage of the equity of a qualifying business for at least two years in the period beginning five years before the date of application;
2. have a legally obtained net worth of at least $300,000; and
3. intend and be able to manage and control a percentage of the equity of a qualifying Canadian business equal to or greater than 33 1/3 percent, and create at least one full-time job equivalent for Canadian citizens or permanent residents, other than the entrepreneur and his or her family members, for a period of at least one year within three years of arriving in Canada.

Entrepreneur - Requirements

“Entrepreneur” means a foreign national who

1. has business experience;
2. has a legally obtained minimum net worth; and
3. provides a written statement to an officer that they intend to and will be able to meet the conditions.

Conditions

(1) An entrepreneur who becomes a permanent resident must meet the following conditions:

1. The entrepreneur must control a percentage of the equity of a qualifying Canadian business equal to or greater than 33 1/3 per cent;
2. The entrepreneur must provide active and ongoing management of the qualifying Canadian business; and
3. The entrepreneur must create at least one incremental full-time job equivalent for Canadian citizens or permanent residents, other than the entrepreneur and their family members.

(3) 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 entrepreneur becomes a permanent resident.

(4) An entrepreneur who becomes a permanent resident must provide to an officer evidence of compliance with the conditions within the period of three years after the day on which the entrepreneur becomes a permanent resident.

(5) An entrepreneur must provide to an officer

1. not later than six months after the day on which the entrepreneur becomes a permanent resident, their residential address and telephone number; and
2. during the period beginning 18 months after and ending 24 months after the day on which the entrepreneur becomes a permanent resident, evidence of their efforts to comply with the conditions.

“Business experience”, in respect of an entrepreneur, means the management of a qualifying business and the control of a percentage of equity of the qualifying business for at least two years in 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.

“Full-time job equivalent” means 1,950 hours of paid employment.

“Minimum net worth” means

1. in respect of an entrepreneur, CDN $300,000; and
2. in respect of an entrepreneur selected by a province, the minimum net worth required by the laws of the province.

“Net assets”, in respect of a qualifying business or a qualifying Canadian business, means the assets of the business, minus the liabilities of the business, plus shareholder loans made to the business by a foreign national and their spouse or common-law partner.

“Net income”, in respect of a qualifying business or a qualifying Canadian business means, the after tax profit or loss of the business plus remuneration by the business to a foreign national and their spouse or common-law partner.

“Net worth”, in respect of an entrepreneur, means the fair market value of all of the assets of the entrepreneur and their spouse or common-law partner minus the fair market value of all of their liabilities.

“Percentage of equity” means

1. in respect of a sole proprietorship, 100 per cent of the equity of the sole proprietorship controlled by a foreign national or their spouse or common-law partner;
2. in respect of a corporation, the percentage of the issued and outstanding voting shares of the capital stock of the corporation controlled by a foreign national or their spouse or common-law partner; and
3. in respect of a partnership or joint venture, the percentage of the profit or loss of the partnership or joint venture to which a foreign national or their spouse or common-law partner is entitled.

“Qualifying business” means a business – other than a business operated primarily for the purpose of deriving investment income such as interest, dividends or capital gains – for which, in each of any two years in the period beginning five years before the date of application for a permanent resident visa and ending on the date a determination is made in respect of the application, there is documentary evidence of any two of the following:

1. that the percentage of equity multiplied by the number of full time job equivalents is equal to or greater than 2 full-time job equivalents per year;
2. that the percentage of equity multiplied by the total annual sales is equal to or greater than $500,000 CDN;
3. that the percentage of equity multiplied by the next income in the year is equal to or greater than $50,000 CDN; and
4. that the percentage of equity multiplied by the net assets at the end of the year is equal to or greater than $125,000 CDN.

“Qualifying Canadian business” means 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.

You can become a permanent resident of Canada by applying in the entrepreneur class. To apply, simply follow these four steps:

To establish whether a business is a “qualifying Canadian business” during a year for the purposes of 3) above, the business must not have been operated primarily for the purpose of deriving investment income (such as interest, dividends or capital gains), and an applicant must provide documentary evidence that the business meets at least two of the following criteria:

• 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;
• the percentage of equity, multiplied by the total annual sales, is equal to or greater than $250,000;
• the percentage of equity, multiplied by the net income for the year, is equal to or greater than $25,000; or
• the percentage of equity, multiplied by the net assets at the end of the year, is equal to or greater than $125,000.

Features of the Entrepreneur Program

• A minimum net worth requirement of $300,000;
• A requirement that within three years of becoming a permanent resident, the entrepreneur must have controlled and have actively managed a qualifying Canadian business for a period of at least one year, and that the business must have created employment opportunities for others; and
• All family members are admitted under the same conditions as the principal applicant; the conditions are removed once the entrepreneur satisfies the conditions.

Under the Canada-Quebec Accord, the province of Quebec operates its own immigrant entrepreneur program. All entrepreneurs in the Quebec program must intend to live in Quebec and must be selected by Quebec. In common with the federal programs, entrepreneurs in the Quebec program must have a net worth of $300,000.

Entrepreneur is an immigrant:

The establishment or purchase of a business should have and expectation of on-going commercial activity and or profit generation. The entrepreneur should hold a significant degree of control in the business.

A substantial investment in a business denotes the purchase of a portion of a business (as a partner) or of shares (as a shareholder).
"Substantial investment" does not require a specific dollar figure, or a fixed minimum investment.

A business must contribute in more than a temporary and marginal way to the level or nature of economic activity of Canada or one of its communities, regions, provinces or territories to classify as "significant contribution to the economy".

In the case of Lui v. The Minister of Employment and Immigration (1991) the IAD held that the following were factors that could be considered in determining whether an entrepreneur had made a significant contribution to the Canadian economy (the IAD noted that the list was not intended to be exhaustive):

1. There must be an establishment of a business to which at least one employee (other than the entrepreneur and his family) reports to work.

2. The commercial activity must be carried on in anticipation of profit.

3. The business must be earning revenues.

4. All business licensing requirements of the municipality must have been met.

5. All legal requirements must have been fulfilled (i.e. deductions, etc.)

The negative impact on the economy if the business were not established will be assessed:

• Would there be significant loss of employment or employment opportunities?

• Would clients purchasing goods or services from the business be negatively affected or merely switch to another supplier/retailer/manufacturer?

• Would there be any significant loss of revenue to the federal, provincial or local governments?

The entrepreneur is required to create or continue employment opportunities in Canada for one or more Canadian citizens or permanent residents, other than entrepreneur and his/her dependants. The employment opportunity should be equal to full-time employment, either one person working full time, or two people working the equivalent of a full-time position.

Retaining the services of accountants, lawyers, or business consultants on a fee-for-service basis does not create employer – employee relationship and thus does not create employment opportunities.

In order to satisfy the requirement of active and on-going participation in the management of the business, the entrepreneur must demonstrate input into management decisions through involvement in the operations of the business on a continuing basis.

"Active" can be considered as causing action or change, and "on-going" as continuing.

Persons who wish to operate a professional practice in Canada must meet Canadian licensing requirements.

As a general rule, passive investment in real estate, bonds or other securities, or other investment made primarily with the hope of capital appreciation, would not satisfy the requirement of significant contribution to the economy, or active and on-going management.

Selection Criteria

Entrepreneurs are not assessed under Occupational Demand and Arranged Employment/Designated Occupations.

Entrepreneur must be awarded at least one unit of assessment for experience.

There is no basis in law to require an entrepreneur to undertake a specific business activity or to locate in a specific area.