A GUIDE FOR OVERSEAS BUSINESS OWNERS: Immigration to Canada via Business Ownership
A Guide for Foreign Investors Purchasing a Canadian Business
In order to qualify for the Entrepreneur Work Permit Program as a foreign investor or entrepreneur who wishes to relocate to Canada, purchasing an established Canadian business may be a viable alternative.
It is difficult to find a reliable business with excellent growth prospects in preparation for immigration.
You must choose a business that matches your talents, prior expertise, and financial objectives. In addition, the firm you intend to purchase must fit the criteria established by Canadian immigration officials.
In this article, we examine how international investors might locate the ideal Canadian business to acquire.
Step 1: Concentrate on Businesses Favored by the IRCC
Assume you intend to relocate to Canada as a business owner or sole proprietor. In such a circumstance, you must demonstrate to Canadian immigration authorities that your commercial operations will generate “substantial economic value” for Canada. You can demonstrate “significant economic benefit” in a number of ways, including:
Option 1: acquiring a business in key economic industries or sectors;
Option 2: acquiring a business engaged in “significant benefit” activities; or
Option 3: investing a significant amount of money into a business that will create employment opportunities for Canadians.
Agriculture, which includes food and beverage production and food processing
Technologies of information and communication
International Education Aviation/Aerospace Mineral/Mineral Development Aquaculture
Biomedical (including R&D, production, etc.)
Forestry, Mining & Natural Resources
Cybersecurity Patent Registrations
Transportation for the Cultural Sector
Energy or Natural Gas Industry Tourism, tourist products, and tourist attractions
Services and infrastructure
Exports Fintech\Farming Video and Film Production
Financial Services Green Economy
Option 2: Important Benefit Efforts
Creating new goods and services Utilizing novel technology
Creating novel approaches for conventional businesses
Increasing Canada’s exports
Increasing research and development, and technological advancements
Transferring technological know-how and particular expertise
Providing goods or services to a local or regional market that is underserved
Option 3: Significant Economic Impact
Investment of at least $250,000 in a Canadian firm;
Job creation/retention for at least 2 Canadians; and
A functioning business that can generate enough revenue to pay all employees’ salaries.
In general, the IRCC dislikes bed & breakfasts and automatic vehicle wash operations.
Hobby farms and at-home enterprises
Scrap metal recycling
Enterprises providing payday loans, check cashing, money transfers, and cash machines
Businesses that sell used products (but not those that offer value-added services such as repairs, refurbishment, or recycling).
Real estate brokerage, insurance brokerage, or commercial
Unless they offer value, tanning salons, real estate development operations, DVD rental establishments, and products trading firms (such as import/export) are prohibited.
Businesses engaged in the production, distribution, or sale of pornographic or sexually explicit items or services, or the provision of sexually oriented services.
Step 2: Research and Choose the Appropriate Business
Start your business search on the all-encompassing Internet. There are numerous websites where business owners can advertise their companies for sale, including Business for Sale, Business Sell Canada, BuyAndSellBusiness.com, and even the Canadian Realtor website. On these websites, you can refine your search by province or even by city.
While these sites are trustworthy, you cannot rely on any website claiming to have business listings.
Scammers tend to frequent sites like Kijiji and Craigslist due to their lack of regulation and the ease with which they can appear authentic.
A useful hint: you are unlikely to locate a legitimately profitable firm for less than approximately $250,000. If a business is being offered for less than that, it is likely not very profitable.
Contact a Broker
Alternatively, one could engage with a company broker. These experts specialize in locating firms for sale and assisting with the acquisition process.
A business broker can be a wise investment because not only will they save you many hours of research, but you will also profit from their knowledge. Consult with business brokers such as Western Canada Business Brokers, Sunbelt, and Aldrin Raphael Business Brokers.
Reduce the Options
After seeing a few firms for sale that pique your interest, conduct some preliminary research.
Contact the firms directly or have your broker contact them to obtain the company’s corporation tax returns for the last three years. They will be known as T2 Corporate Income Tax Returns, Schedule 100, and Schedule 125 in Canada. You should also seek their Goods and Services Tax/Harmonized Sales Tax (GST/HST) filings for the current year.
These records provide an overview of the company’s gross sales so that you may compare your possibilities. Although it is merely the beginning of your financial investigation, it provides a sensible starting point.
It is advisable to meet with the proprietors of your top choices if possible. Ask the business owners why they are selling. Spend a few days in and around each business to gain a better understanding of the clientele, normal sales volumes, and functioning.
Regardless of the technique you choose, ensure that the company you hire fits the following criteria:
Active and functioning business (with a history of at least three years preferred)
At least two employees are employed (the more employees it has, the better)
It generates adequate income to pay the majority of expenses (at least $300,000+).
Your prior experience or skill set is pertinent to the business you intend to manage in Canada.
The potential for prolonged commercial success is high.
Step 3. Do Your Due Diligence
You’ve examined your alternatives and decided to purchase a specific firm. It is now time to send in the cavalry.
Employ a team of seasoned experts to guide you through the process of due diligence. This exhaustive research expedition should unearth any concerns the company may have, such as bankruptcy filings, lawsuits, debt, zoning challenges, and other disagreements that would fall into your lap. Your team will be able to evaluate the risks and determine how they will impact your purchase.
When purchasing a business in a foreign country, due diligence is even more crucial than when purchasing a firm in any other country. You would want experts with knowledge of the country’s laws, liabilities, and regulations.
In addition to specialists in due diligence, you will need professionals that can assist you with the purchase process. A business must have both an attorney and an accountant.
Prior to making a purchase, you will also require an immigration attorney if you plan to use your business to apply for Canadian immigration. Your immigration attorney will be able to investigate the business and determine if it meets your immigration requirements.
How We Can Help You Acquire a Canadian Business
Sadly, many immigrants wind up purchasing businesses that they aren’t interested in, aren’t competent at, and won’t make them any money!
Using our network of local contacts and knowledge of the business culture in Canada, we can assist you in locating employment possibilities that align with your immigration objectives.
Our staff will conduct research and pick the company that best meets your business and immigration requirements.
We will check the business’s papers to ensure that it is genuine and profitable, thereby supporting your immigration requirements. Ultimately, we will complete the purchase transaction for you.
HADSON Immigration Firm specializes in assisting international investors who plan to relocate to Canada and are purchasing a business in Canada. You can concentrate on your business while we handle your permanent residency and, ultimately, your Canadian citizenship.
If you are a foreign entrepreneur or foreign investor purchasing a firm in Canada, contact our team immediately to initiate the process.