Immigrate as an Investor to Canada
How easy is it for investors who wish to immigrate to Canada? Since June 19, 2014, the Government of Canada has suspended the Federal Immigrant Investors and Entrepreneurs Program due to a public outcry over the cost of living in cities like Vancouver and Toronto. In other words, the suspended Federal Immigrant Investors and Entrepreneurs Program was too successful. Under that system investors had to:
- Have a personal net worth of at least CDN $1,6 million
- Invest a minimum of CDN $800,000 for approximately 5 years in a fund
- Invest before being granted a permanent residence visa
- Have your investment guaranteed interest-free by the government
Wealthy investors from around the world took advantage of the program to move to Canada, especially cities like Vancouver and, to a lesser extent, Toronto. House prices began to rise until Vancouver is now one of the world’s most expensive cities. The political backlash meant the Conservative government decided to cancel the program back in 2014.
However, there is now a new program called the Immigrant Investor Venture Capital Pilot Program. But it has a much stricter set of requirements and, unfortunately, is now closed off to new applicants because of the quantity of applications it has already received. To qualify as an investor, you must:
- Have a personal net worth of at least CDN $10 million (more than 5 times the previous minimum)
- Invest a minimum of CDN $2 million in the Immigrant Investor Venture Capital (IIVC) Fund for 15 years (2.5 times the amount for 3 times the period). Your investment is not guaranteed, and you may not earn a return and perhaps you may even lose some or all of your original investment.
- Have your net worth audited by one of 6 designated service providers (large accounting and/or financial consultant firms)
- Display a minimum required English or French language proficiency (CLB level 5 in all 4 areas: speaking, writing, listening, reading)
- Have a post-secondary degree, diploma, or certificate of at least 1 year from a recognized Canadian educational institution or have an equivalent post-secondary foreign degree that has been validated with an Educational Credential Assessment (ECA) that qualifies as an accepted educational outcome by the ECA. That is, it is equivalent to a College certificate, diploma, or degree of at least 1 year. If you have a net worth of over CDN $50 million, you can request an exemption from the education requirements.
In other words, you now (when the Investor Pilot Program is re-opened to new applicants that is) have to invest 2 million dollars with no guarantee that you’ll even get your money back after at least 15 years time. And it’s a fund that you have no control over how and where it invests.
How does the pilot program in Canada compare to similar countries like Australia or the USA? Consider first Australia, whose immigration system is also a point-based merit system similar to Canada’s.
Immigrate as an Investor to Australia
The Australian immigrant investor program is a two-stage process:
- You first have to obtain an Investor (provisional) visa – subclass 162. This requires you to invest AUS$1.5 million for a period of 4 years. You must have lived in Australia for 2 of those 4 years, which must be the years immediately prior to your application for the next level of investor visa. (see step 2 below). Unfortunately, the provisional investor visa – subclass 162 – is not accepting any new applications at this time. Like in Canada, they have faced overwhelming demand and have halted any new applications.
- At the end of the 4-year period as a provisional subclass 162 investor, you may apply for an Investor Visa – subclass 891. You must have complied with your requirements as a 162 investor during the previous 4 years, including health requirements for you and your family. You must have a detailed business plan and meet health requirements. You must have a realistic commitment to continuing your business investment in Australia and you must not have been involved in unacceptable business or investment activities.
Immigrate as an Investor to the USA
In the USA, you may apply for an EB-5 visa which involves active investing on the part of the immigrant investor, similar to Australia’s investor visa, and as opposed to Canada’s current system in which the immigrant investor is required to invest in a fund managed by financial managers and over which the investor has no control. Here are the main requirements for an EB-5 visa:
- You must invest US$1 million in a new commercial enterprise that creates at least 10 full-time jobs.
- Your employees must be US citizens, lawful permanent residents, or temporary workers with temporary visas.
- If you invest in a High-unemployment area (one which has an unemployment rate that is 150% of the average unemployment rate) or a Rural area, your investment must be at least US$500,000. These are called Targeted employment areas.
Clearly all 3 countries are magnets for successful people with a high net personal worth who wish to settle in Canada, Australia, or the USA. So, choosing between the 3 programs depends on your goals. In general, Immigrant Investor programs tend to be the ones that experience the most changes, as governments try to adapt their investor immigration policies to their current needs. In other words, it pays dividends to keep up to date on Immigrant Investor programs so that you can take advantage and invest as soon as they open up for new applications. Don’t let the next opportunity pass you by!