Entrepreneur: Regulatory Requirements

The Canadian government announced a new entrepreneur visa program in Septemer, 2012.

As a result, a moratorium has been placed on all Entrepreneur Program applications until further details of the new program are announced.

Immigration Minister Jason Kenney announced the changes on 12 September, 2012 and more details are expected to be revealed later in 2012.

Further information about changes to Canada visa policy can be found on the Canada Visa Bureau blog as well as the news section.

To establish whether a business is a 'qualifying Canadian business' during a year, the business must not have been operated primarily for the purpose of deriving investment income (such as interest, dividends or capital gains).

The definitions to determine those requirements are as follows:

'Entrepreneur' means a foreign national who:: Has business experience;; Has a legally obtained minimum net worth; AND; Provides a written statement to an officer that they intend and will be able to meet the qualifying conditions.

'Business experience' in respect of an entrepreneur, means:: A minimum of 2 years of experience consisting of two 1-year periods of experience in the management of a qualifying business and the control of a percentage of equity of the qualifying business during the period beginning 5 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:: In respect of an entrepreneur, CA$300,000.

'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 the foreign national who is making or has made an application for a permanent resident visa 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 the foreign national who is making or has made an application for a permanent resident visa 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:: 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;; 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; 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, during the year under consideration, there is documentary evidence of any 2 of the following:

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;

The percentage of equity multiplied by the total annual sales is equal to or greater than $500,000;

The percentage of equity multiplied by the net income in the year is equal to or greater than $50,000; AND

The percentage of equity multiplied by the net assets at the end of the year is equal to or greater than $125,000.

'Qualifying Canadian business' means:

A business operated in Canada by an entrepreneur - other than a business operated 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 3 years after the day the entrepreneur becomes a permanent resident documentary evidence of any two of the following:

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;

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 in the year is equal to or greater than $25,000; AND

The percentage of equity multiplied by the net assets at the end of the year is equal to or greater than $125,000.

Conditions for Permanent Residence

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

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

Conditions

If at the time an entrepreneur selected by a province provides the written statement referred to in the above definition of 'entrepreneur', the province has established the conditions required to be met by such an entrepreneur, that statement must refer to those conditions instead of the conditions and must meet those conditions.

Applicable Time

The entrepreneur must meet the conditions for a period of at least 1 year within the period of 3 years after the day on which the entrepreneur becomes a permanent resident.

Evidence of Compliance

An entrepreneur who becomes a permanent resident must provide to an officer evidence of compliance with the conditions within the period of 3 years after the day on which the entrepreneur becomes a permanent resident.

Report and Evidence of Efforts to Comply

An entrepreneur must provide to an officer:

Not later than 6 months after the day on which the entrepreneur becomes a permanent resident, their residential address and telephone number; AND
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.

Family Members

The family members of an entrepreneur are subject to the condition that the entrepreneur meets these conditions.

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