Canadian business owners looking for a buyer should consider foreign candidates looking to immigrate to Canada.
Any business with a strong history of earnings can qualify under federal government Owner-Operator Work Permit policies.
The foreign immigration market can be an excellent source of buyers for Canadian business owners.
For many potential high net worth high net worth immigrants, the pathway to Canada is two-staged. It begins with a temporary work permit issued by Ottawa under owner-operator rules.
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To qualify, the foreign investor must submit a credible business plan which documents a commitment to acquire the Canadian business. Once issued, the foreign investor can begin the second stage and apply for permanent residence to Canada, under one of many immigration programs.
A foreign employee-investor can create a new business, acquire an existing Canadian business, or invest substantially in an enterprise and qualify for a work permit as a TFW.
What Kind of Canadian Businesses Qualify under Federal Owner-Operator Immigration Policies?
There is no explicit rule on the kinds of businesses or the amount of the investment. The first requirement is that it should have a strong history of profitability and can afford to hire the investor.
Typically, high net worth immigrants would be interested in purchasing an existing profitable business at a cost of under $1 million.
Businesses may include a wide range of industries, such as retail, consumer services, hotels, restaurants and bars, travel, leisure, publishing, manufacture, IT consulting, development or design and many others. Apart from passive real estate which would be a definite exclusion, most businesses could be considered.
What Are The Conditions?
The acquisition of the business by the foreign national must, among other conditions, result in the creation or retention of Canadian jobs and there must be knowledge transfer to Canadians.
Where the foreign employee-investor acquires or intends to acquire 100% or substantial interest of an existing Canadian business, the following considerations will apply for the assessment of a Labour Market Impact Assessment (LMIA).
1) Complete Purchases
Where a 100% purchase has been completed and documentary evidence is provided (share purchase agreement, share certificate, notice of articles, central securities register, CRA#), reflecting purchase/ownership change application, the burden of proof is less onerous. However, the requirement on creation or retention of Canadian jobs and knowledge transfer to Canadians in the form of a transition plan, still needs to be satisfied.
The new owner as employer, will apply for an LMIA, to support an owner-operator management-based work visa.
2) Pending Complete Purchases
Where the transaction is pending, and contingent on an LMIA and work permit, immigration authorities will broadly assess if the anticipatory project is genuine. Key factors include how advanced the transaction is, (signed share purchase agreement, monies in escrow), how sound the foreign employee-investor’s business plan to acquire 100% ownership in the shares of the business as principal owner is and whether the intent to hire or retain Canadian workers can be established.
The existing or incoming owner as employer, will apply for an LMIA.
The existing owner could also submit the LMIA to hire the foreign employee-investor into a specific management position in the business, in which case the usual program requirements will apply. Once the purchase takes place in the future, the new owner as employer will submit a new LMIA to support an owner operator management-based work visa.
3) Partial Purchases
Where the transaction is pending and contingent on an LMIA and work permit, once again immigration authorities will broadly assess if the anticipatory project is genuine.
Key factors include how advanced the transaction is, (signed share purchase agreement, monies in escrow), how sound the foreign employee investor’s business plan to acquire a substantial ownership in the shares of the business as principal owner or co-owner is, what percentage of the business is being transferred and whether the intent to hire or retain Canadian workers can be established.
What is the Process?
- The foreign investor identifies a Canadian business to purchase.
- A Labour Market Impact Assessment (LMIA) is submitted along with a suitable business plan.
- Once a positive LMIA opinion is issued, the foreign investor applies for a 12-24 months, renewable temporary work permit at the management level.
How Long Does It Take?
Once a suitable business is found, it will take 2-3 months to complete the LMIA application process. It will take less than 3-months in most jurisdictions to receive a work permit.
How Can Immigration.ca Help?
Through our established network of licensed professionals, we can help put Canadian business owners together with foreign investor-entrepreneurs.
Once the transaction is agreed, we rely on our 60+-years of legal experience, recognized in the Canadian legal community, to complete the required immigration formalities.
Complete our online assessment form and receive more details.
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