Investor Category

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 may benefit from this option.

Who Should Apply?

Businesspeople or professionals who have a minimum net worth of CDN$ 1,600,000 and who can prove that they have accumulated this amount through their own efforts and are willing and able to invest CDN$ 800,000 (interest-free) in Canada for at least 5 years. This background 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 active 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 visa post;
  3. once the interview takes place or is waived, background and medical
    checks are completed;
  4. the applicant then completes the investment of the Fund; and
    the visa is issued;
  5. as mentioned, investing a Fund can involve a total cash investment, or bank financing that can easily be arranged prior to the Canadian immigrant visa issuance. 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 (in case of using financing option).

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 upon request.

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.

Basic Features of Funds (Federal/ Provincial-Quebec)

General Comments

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.

Basic Features of Funds (Federal/ Provincial-Quebec)

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

(a)   they have a five-year term. That is, at least five years elapses from the day of actual investment 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 (Quebec) Fund;

(d)   Investments can be done 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 (Federal);

(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 Investment. 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 Investors 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. In fact the funds are now managed by the government and the payback security is guaranteed by the government.

(h)   investments into all Funds are priced at $800,000. The financing service costs capital requirement is influenced by the existing Bank Prime Rate at the time. This cash money is used for service fees and  the loan interest over the entire term and usually no further cash calls are made on the Investor; and

(i)     investment into 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 (Federal/Provincial-Quebec) has been chosen, we go through each step with the client so that all documentation is done precisely and all is understood.

Investing into 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 investor 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.

(d) investment is required after successful Quebec interview or waiver of an interview by Quebec Authorities.

Immigrant Investor Program Facilitator Institutions:

The following is the list of some financial institutions that are officially facilitating the immigrant Investor’s banking Criteria and administration monitoring.

Some Immigrant Investor Program Facilities Institutions (At the time of writing):

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.

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?

When should I commit my investment?

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.

What forms must be completed to enable me to make the $800,000 payment?

What forms must be completed to enable me to make the $800,000 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?

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 $800,000?

Can I borrow all or part of the $800,000?

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?

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

No. To qualify for immigration as an investor immigrant, CAN$800,000 must be paid to the Receiver General for Canada (at the time of writing).  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?

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?

Is my investment guaranteed?

Yes. Immigrant investors will be repaid their full investment of $800,000. The investment is fully government guaranteed by the provinces and territories that participate in the program.

When will my investment be returned?

When will my investment be returned?

CIC will repay the investor’s $800,000 (without interest) in five years. The exact date of repayment depends on when the $800,000 is received by CIC.  At the latest, the amount would be returned five years and three monthsfrom the date of investment.

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

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$1,600,000 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?

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$1,600,000.  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?

Are there terms and conditions imposed on immigrant investors?

Investor visas do not include terms and conditions.  Investors however, are expected to commit their $800,000 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?

When can I withdraw my money?

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

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

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 June 26, 2010?

What are the major changes in the redesigned Immigrant Investor Program, which became effective on June 26, 2010?

– The investment has been increased to CAN$800,000 for all investors.

– The investor’s minimum net worth has been increased to CAN$1,600,000.

– The investor’s $800,000 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 June 26, 2010 changes affect the Quebec program?

Do the June 26, 2010 changes affect the Quebec program?

Quebec harmonized its program by incorporating the $800,000 investment amount and the $1,600,000 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 for Federal part.