I was recently asked if it’s true that foreigners can basically “buy their way into Canada” for $120,000.
This question obviously relates to Canada’s Investor Program. This program is one of the three components of our federal Business Immigration Program, which is designed to “attract experienced business people to Canada to support the development of a strong and prosperous Canadian economy.” This program is not to be confused with Quebec’s investor program or similar programs of other provinces.
Prospective investors in the federal program must have a lawfully acquired net worth of at least $800,000. Visa officers will expect investor applicants to prove that no portion of their net worth was obtained as a result of criminal activity.
Investors must also have “business experience.” If they were the sole owner of a business, they will meet this criterion if they meet any two of the following requirements for at least two years in the period beginning five years before the filing of the application right up until the time a decision is made on the application:
Two full-time employees;
$500,000 in annual sales;
Net income of $50,000;
Net assets of $125,000.
These amounts will increase proportionately as the percentage of ownership decreases.
Alternatively, applicants may show that they have managed at least five full-time people, or their equivalent, for at least two years during this period in a business that they did not necessarily own.
Once an investor is selected, he or she will be given 30 days to deposit $400,000 with the federal government in exchange for a promissory note from CIC. The federal government will let the provinces use that money for 63 months, after which the deposit will be returned to the investor without interest.
Now here is where it gets really interesting.
Investors who don’t want to part with $400,000 for over five years can go to a financial institution, i.e. Desjardins, who will be happy to advance this money to the government on behalf of the investor. In exchange, the investor will pay Desjardins $120,000 in advance to cover the approximate amount of interest that the bank would have earned on its $400,000 during the 63-month period. Of course, the $120,000 is not refundable and basically represents the cost of admission to Canada.
This option is very popular since most investors believe that they can earn more than $120,000 on $400,000 of their capital during a five-year period.
Provided that the investor passes security and medical screens, he or she will be admitted to Canada as a permanent resident without any conditions and without any requirement to set up a business here.
Not a bad deal at all.
Guidy Mamann practises law in Toronto at Mamann & Associates and is certified by the Ontario Law Society as an immigration specialist. Reach him confidentially at 416-862-0000 or at firstname.lastname@example.org