Application period opens for new investor visa program

28 Jan 15

CANADA

IMPACT – MEDIUM

What is the change? Canada is accepting applications for its Immigrant Investor Venture Capital pilot program.

What does the change mean? Applicants who are able to invest 2 million Canadian dollars (about US$1.6 million) and who meet other eligibility requirements may now submit applications for permanent residency.

  • Implementation timeframe: Now until Feb. 11, or until 500 applications are received.
  • Visas/permits affected: Permanent residence.
  • Who is affected: Eligible foreign investors.
  • Impact on processing times: Citizenship and Immigration Canada hopes to keep processing times for the permanent residence stage of the application at about six months.
  • Business impact: The Canadian government hopes the program will benefit Canada’s business community and broader economy, but the relatively modest scope of the pilot program makes it difficult to determine how much of an impact it will have.
  • Next steps: CIC will accept a maximum of 500 applications during the application period. Up to 60 applicants, 10 more than previously announced, will be invited to apply for permanent residency upon showing an ability to make the required investment and meet other criteria.

Background: The Immigrant Investor Venture Capital pilot program is designed to attract a small number of wealthy investors and their families to Canada. Investors will be required to make CA$2 million of nonguaranteed investments for 15 years in order to qualify. Other eligibility factors include demonstrated proficiency in either English or French, a Canadian post-secondary degree or the foreign equivalent and a legally obtained net worth of at least CA$10 million (about US$8 million). Applicants will be required to obtain a due diligence report to “validate the source of their wealth,” CIC said.

The investment money will be pooled to invest in Canadian start-up companies deemed to have high-growth potential. BDC Capital, the investment arm of the Business Development Bank of Canada, will play a leading role in managing the fund.

CIC officials have made changes to the program from previous versions to encourage sustained investments of greater amounts. The former Immigrant Investor Program required an investment of CA$800,000 in the form of a repayable loan without skills and abilities requirements, resulting in investors being less inclined to stay in Canada for longer periods and contributing relatively little to the Canadian economy.

CIC Minister Chris Alexander said in a statement that the new investor program is designed to attract investors who “will significantly benefit the Canadian economy” and “will contribute to our long-term prosperity and economic growth.”

BAL Analysis: CIC officials hope that the new program will be more successful than past investor visa programs, noting that the required investment has been increased from CA$800,000 to CA$2 million, among other changes. Capping the number of investors who can apply for permanent residency at 60 may also help avoid the backlogs that plagued past programs.

This alert has been provided by the BAL Global Practice group and our network provider located in Canada. For additional information, please contact your BAL attorney.

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