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| Investor Class Immigrants |
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Prepared
by Peter Wong, Q.C.
The content of this article is intended to be informational only. We
caution you against using or relying upon any information contained
in this article without first seeking legal advice regarding your
particular matter. All matters arising from the use of our website,
including this article, shall be governed by Alberta law and shall
be within the exclusive jurisdiction of the courts of Alberta
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| (Updated as of January
2005) |
Investor class immigrants
are those persons who may become permanent residents on the basis of
their ability to become economically established in Canada and who
are investors within the meaning of the Regulations. (Regulation 90)
An investor is defined as a foreign national who has:
a) business experience
b) a legally obtained net worth of at least $800,000 Cdn and
c) has indicated in writing that they intent to make or have made an
investment. (Regulation 88(1))
In order for an investor to be considered to have business
experience, he must have a minimum of 2 years of experience in
respect of :
i) management of a qualifying business and the control of a
percentage of equity of that business during the 5 year period
before the date of the application and ending on the date a
determination is made in respect of the application; or
ii) management of at least 5 full time employees in the same time
period as described above. (Regulation 88(1).
A percentage of equity as used in the definition of experience,
means, in the case of a sole proprietorship 100% ownership
controlled by the applicant or the spouse or common-law partner of
the applicant. (Regulation 88(1)). In the case of a corporation it
means the controlling interest in the voting shares of the issued
capital of the corporation and in the case of a joint venture or
partnership it means the controlling percentage of the profit or
loss of the entity.
In order for a business to be qualifying so that the applicant can
be considered to have business experience by managing and
controlling the percentage of equity, that business must not be a
business operated primarily for the purpose of deriving investment
income such as interest, dividends or capital gains. Further, it
must meet at least 2 of the following 4 minimum criteria:
1) Employment of 2 full time job equivalents
2) Total annual sales is greater than of $500,000 Cdn
3) Net income is greater than $50,000 Cdn
4) Net assets at the end of a year is greater than $125,000 Cdn.
(If the applicant owns less than 100% than the requirements are
multiplied by the percentage of equity that the applicant owns in
the company. For example if the applicant owns 50% of the business
than the minimum requirements would be doubled.)
If the applicant has the necessary business experience and the
legally obtained net worth of $800,000 than in order to qualify the
applicant must promise or make an investment in an approved fund. An
approved fund is specifically approved by the Minister of
Citizenship and Immigration and consists of a corporation that is
controlled by the government of a province and is authorized to
create or continue employment in Canada to foster the development of
the Canadian economy.
The investment is in the minimum amount of $400,000 Cdn and is
generally subject to a 5 year period in which the investment may not
be returned. The period commences shortly after the agent for the
approved fund receives the monies. Although the investment is a
minimum of $400,000 there are financing options available which
reduces the initial outlay of capital and in turn reduces the amount
of capital (due to interest accruing) at the end of the investment.
Needless to say, this category is suitable only for high net worth
individuals who are able to establish the origins of their money as
having been legally obtained, usually through taxation records,
business records and financial statements which would provide some
history as to the origins of money. These individuals would then be
required to leave their monies with the fund for the 5 year lock in
period. The capital repayment of funds are generally subject to
covenants of repayment made by the government which is sponsoring
the particular fund.
Caution is urged and due diligence should be done to ensure that the
agent and the fund are government approved.
If you would like assistance with making an application for
permanent residence please feel free to contact us by email at:
immlaw@caronpartners.com |
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