Prospective applicants are not always aware of the importance of meeting the definition of “entrepreneur” and the impact that it may have on non-compliance. Please contact us for guidance.
The Entrepreneur Class seeks to attract people with ‘business experience’ willing to establish and actively manage a business in Canada that will contribute to the economy and create employment for a Canadian or Permanent Resident.
There is currently a Temporary pause on this program but changes to the Entrepreneur Program are expected within the upcoming months. Please create a free account for updates about the program.
Who is an entrepreneur?
Under Regulation R (88) of the IRPA 2002; the Entrepreneur must comply with the following criteria listed hereunder in order to conform to the Regulatory definition under the Act.
An Entrepreneur means a foreign national who:
- Has business experience
- Has a legally obtained minimum net worth of $ 300,000 CAD; and
- Provides a written statement to an officer that they intend and will be able to meet the conditions referred to in subsection 98 (1) to (5) (Citizenship and immigration Canada, 2008).
Prospective applicants are not always aware of the importance of meeting the definition of “entrepreneur” and the impact that it may have on non-compliance. Our extensive experience and genuine in-depth knowledge of Immigration law and procedures will ensure that we provide our clients with up to date tailored advice. Talk to an agent now.
Do you qualify?
A prospective applicant must comply with the aforementioned Regulatory definition in order to qualify under the Entrepreneur category.
1. Business Experience
- Managed a “Qualifying Business” within the meaning of the Act (Regulation 88); the business cannot be a business that is operated primarily for the purpose of deriving investment income such as interest, dividends or capital gains.
- Controlled a sufficient percentage of equity (sole proprietorship 100% of the equity; Corporation or Partnership or Joint venture) of the qualifying business for at least two out of five years, beginning five years before the date of application for a permanent resident visa.
A qualifying Business under the Act is a business that can show evidence of any two of the following activities in the table below (akanada.com, 2012):-
|Attribute||100% Ownership||50% ownership||20% onwership|
|Net income (CAD)||$50,000||$100,000||$250,000|
2. Net Worth
By virtue of Regulation R (88) of the IRPA 2002, net worth is defined as 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. (Assets may include inheritances).
Within the meaning of the Act, the foreign national must possess a personal minimum net worth of CAD $ 300,000 legally obtained (income must be derived from a lawful source).
3. Compliance with the conditions referred to in subsection 98 (1) to (5)
Provide a written statement – pertaining to compliance with the conditions referred to in subsection 98 (1) to (5). (Entrepreneurial terms and conditions). An entrepreneur who become a permanent resident must control at least 1/3 of a qualifying Canadian Business; there must be evidence of any two of the following (in any year within three years of the entrepreneur becoming a permanent resident):
- The percentage of equity multiplied by the number of full time job equivalents is equal to or greater than two full-time job equivalents per year;
- The percentage of equity multiplied by the total annual sales is equal to or greater than $ 250,000 CAD;
- The percentage of equity multiplied by the net income in the year is equal to or greater than CAD 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 CAD.
Create at least one incremental full-time job
The Entrepreneur must provide active and ongoing management of the qualifying Canadian business that will create at least one “incremental” full-time job equivalent (1,950 hours of paid employment) for a Canadian citizen or Permanent Resident, other than the Entrepreneur and their family members.
Entrepreneur must meet/ comply with these conditions for at least one year within three years after becoming a permanent resident.
Report to Citizenship and Immigration Canada
By virtue of Regulation 98 (5) the Entrepreneur must report the following to CIC:
- Their home/residence address and telephone number within 6 months after becoming a permanent resident.
- Evidence pertaining to efforts undertaken by the entrepreneur to comply with the conditions. This must be done within 1 ½ to 2years after becoming a permanent resident.
It is noteworthy mentioning that prior to issuance of the PR visa, an Entrepreneur is required to sign a statement that the applicant / entrepreneur shall be able to meet / comply with the terms / conditions of permanent residence.
Regulation 98 (6) – family members of an entrepreneur are subject to the entrepreneurial terms/ conditions that the principal applicant must meet; failure to comply with the stipulated residency requirements pertaining to the establishment of a qualifying Canadian business can result in the deportation of the Principal Applicant (Entrepreneur and Accompanying Family Members).
The permanent resident status granted to Entrepreneur is subject to terms and conditions (unlike the investor), and may be revoked if these terms and conditions are not met within a specified period.