Invest in Canada

Background
On January 1, 1986, the Federal Government announced the creation of a new category of business immigrant to be known as the “Investor”. In addition, the Government announced that this new category was part of an attempt to increase the number of businesspersons immigrating to Canada yearly from approximately 2,200 in 1985 to 4,000 in 1986. This category was set up to attract a select group of immigrants who have business and management backgrounds. Thousands of visas have been issued in this category and successful immigrants have invested billions of dollars since the inception of the Investor Category.

It is probably the most appealing method of immigration for the following reasons:
 

1. it is the most effortless and worry-free way to immigrate;

2. there are no high education or language requirements;

3. there are no business plans to submit, no exploratory visits to make, or no
   promises on the part of the applicant to start a business; and

4. in some strong cases, interviews are waived.

5. candidates who otherwise would not be eligible or successful in the Immigration process can benefit from this option.

 
Who Should Apply?

Businesspeople or professionals who have a minimum net worth of CDN$ 800,000 and who can prove that they have accumulated this amount through their own efforts and are willing and able to invest CDN$ 400,000 in Canada for at least 5 years. This activity can include:

-          the running of a profitable business, such as an industrial concern or can be derived from commercial activity such as trading, real estate, or investing in financial markets;

-          or have at least 5 years in a managerial position in the private sector or a public department.

The Process

Once an applicant decides to immigrate in the Investor Category, a number of steps are taken:

1. he or she signs up for a Government-approved Fund;

2. the immigration application is sent to the appropriate post;

3. once the interview takes place or is waived, background and medical
   checks are completed;

4. the applicant then completes the purchase of the Fund; and
   the visa is issued;

5. as mentioned, the purchase of a Fund can involve a total purchase, or bank financing can easily be arranged prior to immigration to Canada. Most Investors find that financing is a very attractive alternative, since they wish to keep most of their capital intact for their ongoing business or for their relocation expenses/ accommodation or other source of income;

6. after the five-year term has elapsed, the principal is either repaid in full or the loan is extinguished.

Important Points

1. the Investor Category has been ongoing since 1986;

2. Funds are Government-approved and are guaranteed, meaning the applicant’s investment monies are not at risk; and

3. investment records are meticulously maintained for each applicant throughout the entire holding process. Investors are kept informed about their status and Fund activities.

Significant Point:

The Investor Category addressed the problem of individuals possessing significant resources who wish to immigrate to Canada but who did not wish to become involved in the day-to-day management of the business in which they invested or started in Canada. Often these individuals had investments and companies in a number of countries and were not prepared to give up these interests to participate on a near full-time basis in a business in Canada.

General Comments

Only a certain number of high-quality institutions are approved by the Government of Canada and are able to offer Units to our clients. Each one has its own particular merits which appeal to different types of investor requirements. First, they are easily able to provide financing, and second, they are very capable of keeping detailed financial records. There are certain institutions with which we deal and we maintain solid relationships with them. We have also sought out the most flexible financing arrangements should our clients not wish to tie up the total investment amount required.

Basic Features of Funds

Generally, the Federal / Provincial funds are structured the same way. Similar features include: 

(a)   they have a five-year term. That is, at least five years elapses from the day the unit is purchased to the day the Investor gets a refund. In fact, the actual term is slightly longer when notification, registration and the movement of money are included; 

(b)   the principal amount to be repaid is the original invested amount; 

(c)   there is no interest paid on the invested amount, either with the Federal Fund or with the Provincial Fund; 

(d)   Funds can be purchased in two ways: 

(i)         normally, a deposit of approximately 5% holds a unit until the interview (we are able to waive this requirement for our clients). If for some reason a deposit has been paid, the balance owing is paid just prior to visa issuance; or 

     (ii)      the total purchase price is paid all at
                     once. This method is the norm. 

(e)   borrowing-back or financing can be arranged either at the time of purchase. This financing process is fairly routine and can be completed within two weeks. Most financing arrangements involve personal guarantees, so if the terms seem too stiff for investors, they may prefer to arrange their own financing elsewhere on more favorable terms. In any event, the lenders are happy to have the Unit as collateral since the security is Government-guaranteed. 

(f)   the Funds do not offer competitive  returns since their primary concern is safety of capital. They have learned that buyers are not interested in market returns, just return of capital once the five-year term has elapsed; 

(g)   the Funds we are recommending all have first-rate track records and a solid history of communication with their Investors. With these Funds, investors receive regular communication and/or regular loan statements are sent out (where applicable). 

(h)   all Funds are priced at $400,000. The equity requirement is influenced by the existing Bank Prime Rate at the time. This equity money is used to service the loan over the entire term and usually no further cash calls are made on the Investor; and  

(i)     purchasing a unit requires the signing of a number of forms and the wiring of money. Generally, it is an uncomplicated process. Once a particular Fund has been chosen, we go through each step with the client so that all documentation is done precisely and all is understood.

Purchasing a Unit

Steps Required 

1.         Receive investment package, which includes:

(a)               Two or four Investment agreements (depending on Fund);

(b)               One Power of Attorney; and

(c)               Descriptive material; 

1.                 Sign the two Investment Agreements and Power of Attorney. Have your signature witnessed by someone; 

2.                 Courier completed forms to BACAD Consulting Group when all is complete; 

3.                  Make arrangements to wire the 5% deposit if requested to do so. This is unlikely to occur; 

4.                 The Fund will be notified of your registration as a Unit purchaser and will notify the Embassy or Consulate when appropriate; and 

5.                 Make arrangements to wire transfer the balance owing after a successful interview, background check, and medicals. 
 

The Quebec Investment System 

 The Quebec system appeals to many applicants for a number of reasons: 

(a)   it is usually faster;

(b)   the investment criteria is the same as the Federal Investment criteria; and

(c)   the applicant expresses a desire to settle in the Province of Quebec.

Immigrant Investor Program Facilitator Institutions:

The following is the list of some financial institutions who are officially facilitating the immigrant Investor’s banking Criteria and administration monitoring. (At the time of writing).

Some Immigrant Investor Program Facilities Institutions:

Desjardins
Montreal, Quebec, Canada 

Industrial Alliance
Montreal, Quebec, Canada

 National Bank of Canada
Ottawa, Canada 

Scotia McLeod

Montreal, Quebec, Canada

There are several more similar institutions in this field. 
 

GENERAL INFORMATION 

Investors must have successfully operated, controlled or directed a business and they must have accumulated, through their own efforts, a net worth of at least CAN$800,000.  The applicant will be required to make an investment of CAN$400,000, payable to the Receiver General for Canada.  The investment is subsequently allocated to participating provinces and territories in Canada, which use the funds for job creation and economic development.  The full amount of the investment (without interest) is repaid to the investor after approximately five years.  The return of the investment is fully guaranteed by participating provinces and territories.  This program is limited to those who intend to live in a province or territory other than Quebec.  Investors who intend to live in Quebec may apply under Quebec’s Immigrant Investor program. 

Features of the Immigrant Investor Program: 

-         Investors are not required to start a business in Canada. 

-        Investments are fully guaranteed by the provinces and territories that participate in the program. 

-        The provinces and territories control the investment during the five-year lock-in period. 

-        No immigration terms and conditions are imposed upon admission. Under the Canada-Quebec Accord, Quebec operates its own immigrant investor program. All investors in the Quebec program must intend to live in Quebec and must be selected by Quebec. In common with the Federal program, investors in the Quebec program must invest $400,000 and have a net worth of $800,000 accumulated through their own efforts.

 Supporting Documents for Investor Applications 

The Canadian Government requires an Investor to show that he or she has operated, controlled or directed a successful (profitable) business, and that they have earned a minimum of $800,000 Cdn dollars from their own endeavours in business or investment, including real estate. 

We wish to present sufficient documents with your application (for permanent residence in Canada) to satisfy these requirements. Generally we advise, however, that it is not necessary for an applicant to provide detailed documents on every aspect of their business career, providing we have comfortably satisfied the Canadian Government requirements. 

Generally, the attached list indicates the documents we would like to submit to establish business ownership, operation, profitability and the application’s earnings from business activities; 

·              Evidence of business(es) Incorporation and ownership;

·             Evidence of Shareholding/Director’s status/Management position in business(es);

·             Official business(es) license(s), Regulation or Corporate Operating Certificate from the appropriate Civil authority;

·              Information on general activities and the business(es). A company brochure or annual report would be of assistance;

·              Annual financial statements, including profit/loss statements, for the business(es) for the past four (4) years;

·              Evidence of business(es) taxable profits and amount of tax paid;

·             Bankers reference letter for the business. A reference letter from the company’s accounting firm would also be useful. These letters should simply state that the bank/accounting firm is fully familiar with the operations of the business(es), and confirm that they know the applicant to be the Chief Executive Officer/Owner, etc. of the business(es).

On the personal financial side, we require: 

·              Personal tax returns for past four years;

·             Bank statements of current account values;

·             Investment statements of current holdings;

·              Evidence of real estate ownership;

·              Evaluation of real estate;

·              Statements of current mortgage on real estate.

Frequently Asked Questions

When should I commit my investment? 

You can make your $400,000 payment any time after you have submitted your immigration application.  The investment must be formally made before an immigrant visa can be issued.  If you have not done so and your visa is ready, you will be notified by a visa officer that your immigration application has met all requirements other than the investment.  You will then have 30 days to make the payment. 

What forms must be completed to enable me to make the $400,000 payment? 

You must read the Subscription Agreement, an important document that describes your rights and responsibilities as an Investor. You will be required to send two to four signed copies of the Subscription Agreement. We supply these forms to our clients in ready-for-signature form. 

Do I need to send a receipt to the Business Immigration Center to show that I have made the payment? 

No. When your payment has cleared processing in Canada, Citizenship and Immigration Canada in Ottawa will notify the visa office so that your visa can be issued. CIC in Ottawa will also return one executed copy of your Subscription Agreement to you. 

Can I borrow all or part of the $400,000?           

Yes, financing is permissible. It is your responsibility to make these arrangements and the decision to use financing can be made at any time. Use of financing in no way influences the Immigration process. 

Can I make any kind of investment in Canada in order to qualify?           

No. To qualify for immigration as an investor immigrant, CAN$400,000 must be paid to the Receiver General for Canada.  There is no other investment option, other than Quebec’s Immigrant Investor program, which is only available to immigrants intending to reside in Quebec. 

How will my investment be used in Canada?           

The money CIC receives is allocated to provincial and territorial funds according to an allocation formula.  Investors will be informed of the share of their investment allocated to each province and territory through a promissory note prepared and delivered by CIC.  The provincial and territorial funds will use the investment for economic development and job creation. 

Is my investment guaranteed? 

Yes. Immigrant investors will be repaid their full investment of $400,000. The investment is fully government guaranteed by the provinces and territories that participate in the program. 

When will my investment be returned? 

CIC will repay the investor’s $400,000 (without interest) in five years. The exact date of repayment depends on when the $400,000 is received by CIC.  At the latest, the amount would be returned five years and three months from the date of payment.  

What do you mean when you say that my minimum personal net worth must be accumulated “by my own endeavors”? 

You must have earned the minimum personal net worth amount of CAN$800,000 through your employment, business and investment activities.  Monies that are received as inheritances and gifts do not qualify as personal net worth under this program. (Some exceptions apply) 

How do I prove my qualifications and net worth to the visa officer? 

You must show documents proving that you have successfully operated, controlled or directed a business.  Many applicants use documents such as business registration documents, tax records, partnership agreements, company annual reports or financial statements for this purpose.  You must have accumulated, by your own endeavors, a personal net worth of at least CAN$800,000.  You may be required to submit bank statements or certificates, property deeds, business valuations, share certificates or similar documents for this purpose. You will be asked to explain any ambiguities, inconsistencies, shortcomings or gaps in these documents in an interview with a visa officer. 

Are there terms and conditions imposed on immigrant investors? 

Investor visas do not include terms and conditions.  Investors however, are expected to commit their $400,000 payment for a five-year period.  We hope they will also contribute to the Canadian economy by using their business skills in Canada.   

When can I withdraw my money?           

If your visa has been issued, the law locks ink
            your investment for five years. 

What happens to my investment if my immigration application is refused? 

You must request reimbursement of your money in writing. The visa office will provide the address in Canada in its letter of refusal to you. Your money will be returned 90 days after your request is received. 

What are the major changes in the redesigned Immigrant Investor Program, which became effective on April 1, 1999? 

            - The investment has been increased to
            CAN$400,000 for all investors.

            - The investor’s minimum net worth has been
            increased to CAN$800,000.

            - The investor’s $400,000 is fully guaranteed.

- All investors in the Quebec Program must intend to settle in Quebec and be  

-  Be selected by Quebec to be eligible for an immigrant visa. 

Do the April 1, 1999, changes affect the Quebec program? 

Quebec harmonized its program by incorporating the $400,000 investment amount and the $800,000 net worth requirement. To be eligible for an immigrant visa, all investors in the Quebec Program must be selected by and intend to settle in Quebec. A Certificate de Selection du Quebec (CSQ) will be required.