As previously mentioned, when the Ontario Immigrant Nominee Program (“OINP”) announced the termination of its Investor Stream on October 29, 2015, it promised that it would create new Entrepreneur and Corporate Streams to replace it.  On December 18, 2015, the OINP published complete eligibility criteria and application guidelines for these new business streams.  Details of both are provided below.

The Corporate Stream

Overview

The Corporate Stream is intended to support established international corporations looking to expand into Ontario or buy an existing business.  The OINP is currently accepting applications under this stream.

An eligible corporation begins the process by submitting an application under the Corporate Stream.  If the application is approved, the corporation will be required to sign a Performance Agreement, which outlines its commitments to invest and create jobs in Ontario.  Key staff will then be issued temporary work permit support letters, which they can use to obtain work permits.

Once the key staff have arrived in Ontario, the corporation has up to 20 months from the date that they arrive to implement the business plan, actively manage the business, and meet all of the commitments outlined in the Performance Agreement.  All permanent full-time jobs that have been created must have been continuously filled for at least 10 months, prior to the corporation’s submission of its Final Report.

The applicant corporation is responsible for filing a Final Report with the OINP between 18 and 20 months after the key staff have arrived in Ontario with their valid work permits.  The Final Report must be submitted to the OINP in order to initiate the nomination process.

If the corporation is successful in meeting the commitments outlined in its Performance Agreement, the key staff will be eligible to apply for nomination.  If nominated by the OINP, these key staff members may apply for permanent residence under the Provincial Nominee Class.

Eligibility Requirements

Corporate/Investment Requirements

To be eligible under the Corporate Stream, the corporation must meet the following requirements:

• The corporation must have already been established for at least 36 months at the time of the application.
• The corporation must invest a minimum of $5 million CAD in a new or existing Ontario business.  The investment funds must have been obtained from lawful sources.
• The proposed investment activity must be of significant economic benefit to Ontario.
• If the corporation is purchasing an existing Ontario business, the following additional criteria apply: (1) the acquired business must have been in continuous operation by the same owner for the preceding 60 months, (2) the purchase must completely transfer ownership from the previous owner(s) to the corporation, (3) the Ontario business must not have been previously owned/operated by a current or former OINP business stream nominee, (4) the proposed business plan must intend to grow the business (buy and hold business plans with no intent to grow the business are not permitted), (5) the corporation must maintain, at a minimum, the current wage levels and employment terms of existing staff, (6)  the corporation must preserve all existing permanent full-time jobs, and (7) the corporation must also satisfy the job creation requirement (see below).
• The corporation must create 5 full-time, permanent positions for Canadian citizens or permanent residents for each key staff member nominated.  Positions must be paid or at above the prevailing wage for that position.  A full time position means a position that consists of at least 1,560 hours of paid employment in a 12 month period.  However, the following are not considered permanent, full-time employees even if the employee works 1,560 hours in a 12 month period:  (1) seasonal or part-time employees, (2) subcontactors or agency workers, or (3) employees who do not work on the corporation’s premises (i.e. employees who work from home or who telecommute).
• There must be a clear structural linkage between the parent corporation and the proposed new business in Ontario (i.e. subsidiary, branch, or affiliate of the parent).
• The business must intend to make a profit through the sale of goods and/or services.
• Primary income sources must be from active (earned) income, not passive (unearned) income.
• The proposed business must comply with Canadian legal requirements and all regulatory industry and licencing requirements, which govern its legitimate operation.
• The proposed business must comply with all provincial labour laws, including employment standards, health and safety, and labour relations legislation.
• The proposed business must be considered a permanent business in Ontario.
• The corporation must submit a business plan with its application, prepared in accordance with the OINP’s requirements.

Please note that additional criteria and due diligence requirements apply where the proposed business is a land development or leasehold company.  However, this is outside the scope of the present article.

Ineligible Business Types

As the OINP will not process applications for proposed businesses that are likely to have little or no long term economic benefit.  Therefore, the proposed Ontario business may not be:

• Existing Franchises in Ontario (new foreign franchises expanding into Ontario are permitted) [Greater Toronto Area ("GTA") only];
• Gas Stations [GTA only];
• Tire Recycling;
• Scrap Metal Recycling;
• Pawnbrokers;
• Bed and Breakfasts [GTA only];
• Holding Companies;
• Laundromats;
• Automated Car Wash Operations;
• Payday loan and related businesses; and
• Businesses which have been previously owned / operated by current or former OINP business stream nominees

Key Staff Requirements

Applicant corporations may request up to 5 key staff members who will establish the business in Ontario and who are seeking a provincial nomination to permanently relocate to the province.  All key staff must meet Stage 1 requirements at the time of the application in order for the complete application to be approved.  Key staff must also meet additional nomination requirements once the business has met commitments outlines in the Performance Agreement (Stage 2) in order to be considered eligible for provincial nomination.

Stage 1 Key Staff Requirements

• Key staff must be essential to the establishment and operation of the proposed business.
• Key staff must be in a senior, executive, managerial, or specialized knowledge capacity (National Occupational Classification (“NOC”) level 0 or A) in the applicant corporation’s existing business.
• Only one key staff in NOC A can be proposed.
• The key staff must have at least 36 months of experience in the last 60 months, in same position that they will hold in the proposed Ontario business, with the applicant corporation.  They must have been continuously working for the applicant corporation in that position during the 12 months prior to the submission of the application.
• Key staff must not have an immediate family relationship with any member of the corporation’s Executive Board, Board of Directors, or a shareholder owing more than 10% equity in the applicant corporation. Immediate family members include: spouse, mother, father, sister, brother, grandparents, and the spouse’s immediate family members.
• Key staff must not hold any equity in the applicant corporation, except where it was obtained as part of the remuneration in accordance with his or her employment contract, in which case the equity must be less than 10% of the applicant corporation’s business.
• The position to be assumed in the proposed Ontario business must be a permanent, full-time position and must meet prevailing wage levels.

Stage 2 Key Staff Requirements

After the corporation has met its Performance Agreement commitments, key staff will be required to meet the following additional requirements in order to be nominated for permanent residence:

• Key staff must be in a position for which they were approved by the OINP and carrying out the approved job duties.
• Key staff must physically reside in Ontario for at least 75% of each year (9 months out of the year) that they are in Ontario under a temporary work permit.
• Key staff must have a language proficiency equivalent to the Canadian Language Benchmark (“CLB”) Level 5.

The Entrepreneur Stream

Overview

The Entrepreneur Stream is designed to support individuals from countries who are looking to implement a new business idea or buy an existing business in the Province of Ontario.  However, unlike the Corporate Stream, individual entrepreneurs may not immediately submit an application under the Entrepreneur Stream. This is because the Entrepreneur Stream is subject to an Expression of Interest (“EOI”) System, which is similar to the Government of Canada’s Express Entry System.

Prospective entrepreneurs may submit an EOI to indicate their interest in being considered by the OINP they but will not be permitted to apply under the Entrepreneur Stream unless they receive an Invitation to Apply (“ITA”).  If the entrepreneur receives an ITA from the OINP, he or she can submit a complete application under the Entrepreneur Stream.

Under the EOI System, applicants are selected based on the number of ranking points that they receive, rather than when they file their application.  As a result, an applicant who submits an EOI after another applicant but who has a higher number of ranking points will receive an ITA before that other applicant.

Once an entrepreneur has received an ITA, has filed a complete application, and has been approved, he or she then signs a Performance Agreement with the OINP.  This Performance Agreement outlines the commitments that the entrepreneur has made to invest and create jobs in Ontario.  The OINP will then issue a temporary work permit support letter that the entrepreneur can use to apply for a temporary work permit, which will allow him or her to establish the proposed business in Ontario.

The entrepreneur must arrive in Ontario using their temporary work permit within 12 months from the date of their letter of confirmation.  Upon arrival, the entrepreneur will have up to 20 months from that date to implement the business plan and satisfy all of the commitments contained in the Performance Agreement.

The required permanent full-time jobs must be filled within 10 months from the date of the entrepreneur’s arrival in Canada they must remain filled for at least 10 months prior to the submission of the Final Report.  The entrepreneur will be responsible for filing a Final Report to the OINP between 18 and 20 months after he or she has arrived in Canada.  This Final Report must be submitted to the OINP in order to initiate the nomination process.

If the entrepreneur is successful in meeting the commitments described in the Performance Agreement, he or she will receive a Confirmation of Nomination, which may be used to apply for permanent residence.

Eligibility Requirements

Minimum Eligibility Requirements

There are 5 factors that have minimum eligibility requirements for the entrepreneur and, if applicable, his or her business partner:

• Experience – Applicants must have at least 36 months of full-time business experience in the last 60 months, with the last 12 months in either active general business administration or in an area of expertise related to the proposed business opportunity.  This experience must be as a business owner or senior manager.
• Net Worth - If the proposed business will be located in the GTA, the entrepreneur must have a minimum net worth of $1,500,000.00.  If the proposed business will be located outside the GTA, the entrepreneur must have a minimum net worth of $800,000.00.  If the proposed business will be in the Information and Communications Technology/Digital Communications Sector (regardless of where the  business is established in Ontario), the entrepreneur must have a net worth of $800,000.00.
• Personal Investment Funds – If the proposed business will be located in the GTA, the entrepreneur must make a minimum personal investment of $1,000,000.00 and have a minimum equity ownership of $33.3%.  If the proposed business will be located outside the GTA, the entrepreneur must make a minimum personal investment of $500,000.00 and have a minimum equity ownership of 33.3%.  If the proposed business will be in the Information and Communications Technology/Digital Communications Sector (regardless of where the  business is established in Ontario), the entrepreneur must make a minimum personal investment of $500,000.00 and have a minimum equity ownership of 33.3%.
• Job Creation – The entrepreneur must commit to creating at least 2 permanent full-time jobs for Canadian citizens or permanent residents.  Positions must be paid or at above the prevailing wage for that position.  A full-time position means a position that consists of at least 1,560 hours of paid employment in a 12 month period.  However, the following are not considered permanent, full-time employees even if the employee works 1,560 hours in a 12 month period:  (1) seasonal or part-time employees, (2) subcontractors or agency workers, or (3) employees who do not work on the corporation’s premises (i.e. employees who work from home or who telecommute).
• Exploratory Visit – If the entrepreneur purchases an existing business, he or she must make at least one business-related visit to Ontario with the 12 months preceding the submission of the application.

The entrepreneur must meet the minimum requirements for all of the above factors in order to be eligible to apply under the Entrepreneur Stream.  If the entrepreneur is applying with a business partner who is also seeking nomination, the business partner must also meet all of the minimum requirements for each factor described above.  For example, if the proposed business is located in the GTA, both the entrepreneur and the business partner must each investment $1,000,000.00 (a total of $2,000,000.00) and each create at least 2 permanent full time jobs (a total of 4).

General Requirements for the Proposed Business

In addition to the above minimum requirements, the proposed business must meet the following general requirements:

• The business must intend to make a profit through the sale of goods and/or services.
• Primary income sources must be from active (earned) income, not passive (unearned) income.
• The proposed business must comply with Canadian legal requirements and all regulatory industry and licencing requirements, which govern its legitimate operation.
• The proposed business must comply with all Ontario labour laws, including employment standards, health and safety, and labour relations legislation.
• The proposed business must be considered a permanent business in Ontario.
• Any third party investors must be a Schedule I or Schedule II bank or an institutional investor.

If the entrepreneur is purchasing an existing Ontario business, the following additional criteria apply:

• The Ontario business must have been in continuous operation by the same owner for the preceding 60 months
• The purchase must completely transfer ownership of the Ontario business from the previous owner(s) to the entrepreneur, the business partner, and/or third party investor(s).
• The Ontario business must not have been previously owned/operated by a current or former OINP business stream nominee.
• The entrepreneur must preserve all existing permanent full-time jobs and create 2 additional permanent full-time jobs.
• The entrepreneur must maintain, at a minimum, the current wage levels and employment terms of existing staff.
• The proposed business plan must demonstrate that the entrepreneur intends to grow the business.  Buy and hold business plans with no intent to grow the business are not permitted in the Entrepreneur Stream.

As with the Corporate Stream, the OINP will not process applications for proposed businesses that are likely to have little or no long term economic benefit.  Therefore, the proposed Ontario business may not be:

• Existing Franchises in Ontario (new foreign franchises expanding into Ontario are permitted) [Greater Toronto Area ("GTA") only];
• Gas Stations [GTA only];
• Tire Recycling;
• Scrap Metal Recycling;
• Pawnbrokers;
• Bed and Breakfasts [GTA only];
• Holding Companies;
• Laundromats;
• Automated Car Wash Operations;
• Payday loan and related businesses; and
• Businesses which have been previously owned / operated by current or former OINP business stream nominees

Nomination Requirements

The entrepreneur will be required to satisfy additional nomination requirements in order to be nominated by the OINP, once he or she has established the Ontario business and met the commitments described in the Performance Agreement.  The entrepreneur does not need to satisfy these criteria at the time of the initial application filing but must do so when applying for nomination after the business has been established.  The nomination criteria are as follows:

• The entrepreneur must have a language proficiency equal to CLB Level 5 or equivalent.
• The entrepreneur must be physically residing in Ontario for at least 75% of each year (9 months out of the year) that they are in Ontario establishing his or her business under a temporary work permit.

EOI Scoring Factors and Breakdown of Ranking Points

When a proposed entrepreneur submits an EOI, he or she will receive a total ranking score.  These ranking points may be earned in three categories: (1) experience, (2) investment, and (3) human capital; the maximum score available is 160 points.  These three categories are briefly described below.

Experience Factors

The maximum number of points awarded for experience factors is 50 points.

Applicants may claim points based on past business ownership or senior management experience during the last 60 months.  If an applicant has both business ownership experience and senior management experience during the past 60 months, he or she must use only 1 of these 2 types of experiences in the EOI.

The maximum number of points awarded for experience as a business owner is 25 points.  A business owner must have owned at least 33.3% of the business during the period claimed. A business owner must also have played an active role, meaning that he or she was personally involved in the day-to-day operations of the business and had direct involvement in decision making.

The maximum number of points awarded for experience as a senior manager is 20 points.  A senior manager’s role must have included senior decision-making responsibilities in areas such as operations, sales, finance, marketing, distribution, human resources, research and development, etc.

Entrepreneurs may also claim additional points based on past specific experiences in a high growth business and/or export trade business:

• High Growth Business - Experience in a business that experienced at least a 20% increase in revenue in 2 consecutive years.  Applicants will receive 15 points for this specific experience.
• Export Trade Business – Experience in a business exporting at least 20% of goods/services to a foreign market.  Applicants will receive 25 points for this specific experience.

Investment Factors

The maximum number of points awarded for investment factors is 90 points.  Applicants may claim points for net worth, investment amount, job creation, exploratory visits, key sectors, and NOC classification of the jobs that the proposed Ontario business will create:

• Net Worth – Applicants may claim points based on total net worth, up to a maximum of 15 points.  Personal net worth must be legally obtained and verifiable.
• Investment Amount – Applicants may claim points based on the total personal investment amount that will be made into the proposed Ontario business, up to a maximum of: (1) 20 points for a proposed Ontario business located within the GTA, or (2) 25 points for a proposed Ontario business located outside the GTA or in the Information and Communications Technology/Digital Communications Sector.  However, the following are not considered eligible investments: (1) cash, cash equivalents, and working capital (i.e. uncommitted funds) held by the Ontario business, and (2) wage payments made to the entrepreneur and his or her family members.
• Job Creation – Applicants may claim points based on the total number of permanent full time jobs that the proposed Ontario business will create for Canadian citizens or permanent residents, up to a maximum of 20 points.
• Exploratory Visits – Applicants may claim points based on any business-related visits to Ontario within the 1 year period preceding the submission of the EOI, up to a maximum of 5 points.  However, there is no mandatory requirement for any exploratory visits unless the entrepreneur is purchasing an existing business.
• Key Sectors Targeted – Applicants may claim points depending on whether the proposed Ontario business is in a key sector, as determined by the Government of Ontario, up to a maximum of 10 points.  However, there is no mandatory requirement that the proposed Ontario business be on one of these key sectors.  Key sectors currently defined as economic priorities for Ontario are: (1) aerospace, (2) automotive. (3) financial services, (4) food and beverage manufacturing, (5) information and communications technology, (6) life sciences, (7) mining, (8) tourism investment, and (9) water technology.
• NOC 0, A, or B Jobs – Applicants may claim points based on the NOC 0, A, or B jobs that the proposed Ontario business will create for Canadian citizens or permanent residents, up to a maximum of 15 points.  However, there is no mandatory requirement that the 2 newly created jobs actually be in NOC 0, A, or B.

Human Capital Factors

The maximum number of points that may be awarded for human capital factors is 20 points.  Applicants may claim points based on their level of education and official language ability:

• Level of Education – Applicants may claim points based on their highest level of post-secondary education completed, up to a maximum of 5 points.  However, there is no minimum education requirement to be considered for the Entrepreneur Stream.  Post-secondary education refers to full-time studies from a licenced post-secondary institution that leads to a credential that is the equivalent to a Canadian degree, diploma, or certificate.  If an entrepreneur receives an ITA, and claiming to have completed 6 months or more of post-secondary education, they will be required to provide evidence of this education when they submit their complete application, including their Educational Credential Assessment results.
• Official Language Ability -Applicants may claim points based on their proficiency in English or French, up to a maximum of 15 points.   Although there is no minimum mandatory language requirement to be considered for the Entrepreneur Stream at the EOI stage, language proficiency equal to CLB Level 5 will be required at the time that they apply to be nominated by the OINP.

On October 29, 2015, the Ontario Immigrant Nominee Program (“OINP”), formerly the Ontario Provincial Nominee Program, announced that the Ontario Ministry of Citizenship, Immigration and International Trade is redesigning its OINP business streams. As a result, it has terminated its existing Investor Stream.

The Investor Stream allowed certain investors to obtain a nomination certificate from the OINP if:

• They obtained an official endorsement from an Ontario ministry for the investment and the number of positions requested;
• The size of the investment was at least $3 million CAD;
• The investment would create at least five net permanent, full-time jobs for Canadian citizens or permanent residents located in Ontario; and
• The investment was not a passive type of investment.

As of October 29, 2015, new applications under Investor Stream are no longer being accepted. However, all Investor Stream applications that were received on or before October 29, 2015 will not be affected and will be processed under the Investor Stream criteria as it applied on the date of the application.

Applications for its redesigned Corporate Stream and Entrepreneur Stream will be accepted in the Fall of 2015. A brief summary of both redesigned business streams appears below.

The Corporate Stream is designed for corporations who have a viable business activity that will bring significant economic benefit to the Province of Ontario. The following criteria will apply:

• The corporation must invest a minimum of $5 million CAD in a new or existing business;
• Key staff seeking nomination must be currently employed with the corporation and be essential to the operation of the business in Ontario;
• The corporation must create five full-time, permanent positions for Canadian citizens or permanent residents per nominee position; and
• Key staff nominees will have two years to demonstrate that they satisfy the minimum language requirement prior to receiving a nomination for permanent residence.

Other criteria (to be determined) may also apply to the Corporate Stream.

The Entrepreneur Stream is designed for applicants who have a viable business activity that will bring significant economic benefit to the Province of Ontario. An applicant (and one business partner) may initially apply for a temporary work permit in order to establish a proposed business, if the OINP approves his or her proposal. Once the proposed business has been successfully established, the applicant and one business partner may be eligible for nomination by the Province of Ontario. The following criteria will apply:

• A minimum investment of up to $500,000 CAD will be required for each potential nominee applicant;
• A minimum net worth of $800,000 CAD will be required for each potential nominee applicant;
• If required, the entrepreneur may identify a business partner for nomination to assist in the establishment of the business in Ontario;
• The entrepreneur and/or business partner will have two years to meet minimum program requirements (including language) prior to receiving a nomination for permanent residence; and
• The potential nominee must create at least two full-time, permanent jobs for Canadian citizens or permanent residents.

Other criteria (to be determined) may also apply to the Entrepreneur Stream.

These redesigned business streams are a welcome change, especially the Entrepreneur Stream, which will allow individual entrepreneurs to seek a nomination certificate without having to obtain a prior endorsement from an Ontario ministry or to invest $1 million CAD in the Province of Ontario.

Introduction

On December 16, 2014, Citizenship and Immigration Minister Chris Alexander (the “Minister”) announced that Canada will unveil its Immigrant Investor Venture Capital Pilot Program (the “IIVC”) at the end of January 2015.  The IIVC is designed to attract experienced business immigrants who will actively invest in the Canadian economy and will be available to approximately 50 investors and their families (presumably each year).  Although full details of the IIVC have not been announced yet, what is known so far is summarized below.

Eligibility

The eligibility criteria under the IIVC are designed to attract investors with skills and abilities that will help them integrate into the Canadian economy and society.  These criteria will include the following:

• Proven language proficiency in English or French;
• Either: (1) a Canadian post-secondary degree, diploma or certificate; or (2) a foreign educational credential plus an Canadian educational equivalency assessment from a designated organization;
• A legally obtained net worth of at least $10 million CAD derived from lawful, profit-making business activities, which will be verified by a designated due diligence service provider (only applicants selected for processing under the IIVC will be required to obtain a due diligence report); and
• A non-guaranteed investment in the amount of $2 million CAD, paid into the IIVC fund for a period of 15 years (the funds will be invested in Canadian-based start-ups having high growth potential).

Overview of the Application Process

Citizenship and Immigration Canada (“CIC”) will accept up to a maximum of 500 applications within a specified period.  Applications will be selected randomly for processing until approximately 50 approved applications are finalized.  Applications that are not selected will be returned once the cap has been reached.

CIC claims that selected applicants should receive a decision on their applications within approximately six months of submitting all required documentation.  A similar time frame has also been suggested for applicants who are selected under the new Express Entry system.  However, it remains to be seen whether CIC will actually meet this processing standard once it begins processing IIVC and Express Entry applications.

Analysis of the IIVC

The opening of a new program for immigrant investors is good news, especially since the Canadian Government stopped accepting applications under the previous Immigrant Investor Program on July 1, 2012 (it later terminated the entire program).  However, the IIVC is a pilot program (such programs have a maximum duration of 5 years) and it will be limited to 50 applicants (presumably each year).

In addition, the IIVC must be considered in light of investor programs offered by other countries.  Unless a particular investor is predisposed to choosing Canada, he or she is unlikely to apply under the IIVC unless its eligibility criteria are more generous than those applied by the investor programs of those other countries.

For example, the EB-5 Immigrant Investor Program (the “EB-5 Program”) currently offered by the United States requires only an investment of only $1 million USD in a qualifying business, with no specific net worth requirement.  In addition, applicants who choose to invest in an approved EB-5 Regional Center can invest as little as $500,000 USD (although they will also need to fall within the definition of “accredited investor” in order to comply with U.S. securities laws.

The EB-5 Program does impose additional restrictions that will probably not apply under the IIVC.  For example:

• In most cases the EB-5 Program requires the direct creation of 10 full-time jobs for U.S. citizens, permanent residents, or other lawfully permitted immigrants.  However, in Targeted Employment Areas (most EB-5 Regional Centers are established in such areas), it is possible to demonstrate the indirect creation of these jobs resulting from the investment itself.
• EB-5 Program applicants are given conditional permanent resident status for 2 years and must apply to remove their condition after that date.  However, once the condition has been removed, EB-5 immigrants are permitted to sell their interest in the EB-5 investment (the IIVC will impose a 15-year investment obligation).

Conclusion

Although the IIVC certainly has potential, it remains to be seen whether the program will be popular with foreign investors, in light of the investor options currently offered by other countries.

On February 11, 2014, the Government of Canada announced its intention to terminate the Federal Immigrant Investor Program (“IIP”) and Federal Entrepreneur Program (“EP”) and eliminate the large backlog of applications.  These immigration-related announcements were contained in the Canadian Government’s 2014 Budget (the “Economic Action Plan 2014”).

The Economic Action Plan 2014 proposes to terminate IIP and EP applications filed on or before February 11, 2014, and to return the filing fees paid to those applicants.  However, before this plan can be implemented, the Budget Implementation Act must still be passed by Parliament and receive Royal Assent.

According to Operational Bulletin 566 (“OB 566”), published by Citizenship and Immigration Canada (“CIC”) on February 12, 2014, the processing of IIP and EP applications will continue according to routine office procedures until further notice.  Of course, Canada has not accepted any new IIP applications since July 1, 2012, and has not accepted any new EP applications since July 1, 2011.  OB 566 refers only to cases currently in the backlog.

There has been no announcement regarding which cases currently in the backlog will be processed to completion.  Based on the process used by CIC when it eliminated the backlog of Federal Skilled Worker cases, it is likely that the Budget Implementation Act will terminate all applications that have not reached a specific stage of approval by a specified cut-off date.  Unfortunately, there is no information available regarding what stage of completion and what cut-off date will be used.

According to the Canadian Government, the global economy has changed significantly since the IIP was created three decades ago.  Investment capital flows increasingly freely across borders, and interest rates are low.  Other peer countries have already adapted by increasing the investment and commitment required under their programs.

The Canadian Government has also stated that the EP was designed in the 1970s when Canada’s economic priorities were different from what they are today.  At that time, the focus was on protecting jobs in Canada.  However, a more globalized economy requires a shift towards innovation, productivity and creating better jobs and stronger businesses that can compete on a global scale.

In place of the these programs, the Canadian Government will introduce a new Immigrant Investor Venture Capital Fund pilot program, which will require immigrants to make a real and significant investment in the Canadian economy.  The Government will also undertake consultations on a potential Business Skills pilot program.

These new pilot programs will be implemented by way of Ministerial Instructions, pursuant to Section 14.1 of the Immigration and Refugee Protection Act (“IRPA”), in the same manner as the Start-Up Visa Program.  Under Section 14.1, no more than 2,750 applications may be processed each year under a pilot program.  In addition, a pilot program may only be implemented for a maximum period of five years, after which the Canadian Government must amend IRPA if it wishes to establish a permanent program.

Introduction

As previously reported, on January 24, 2013, the Minister of Citizenship, Immigration and Multiculturalism (the “Minister”) announced that Citizenship and Immigration Canada (“CIC”) would launch a Start-Up Visa Program to recruit innovative immigrant entrepreneurs who will create new jobs and spur economic growth. On March 30, 2013, CIC published Ministerial Instructions (the “Instructions”) in the Canada Gazette, which formally establish the new Start-Up Business Class. CIC also published Chapter 27 of the Overseas Processing Manual (“OP 27”), which provides further details regarding the processing of such applications. An overview of the Start-Up Business Class is provided below.

Start-Up Business Class Defined

Pursuant to Section 14.1 of the Immigration and Refugee Protection Act , S.C. 2001, c. 27 (“IRPA”), the Instructions establish the Start-Up Business Class as a subgroup of the broader Economic Class described in Subsection 12(2) of IRPA.  According to Subsection 2(2) of the Instructions, foreign nationals are members of the Start-Up Business Class if they:

1. Have obtained a commitment from:
   • One or more designated angel investor groups, confirming that they are collectively investing a total of at least $75,000CAD in a qualifying business; or
   • One or more designated venture capital funds, confirming that they are collectively investing a total of at least $200,000CAD in a qualifying business;
2. Have attained a level of proficiency of at least benchmark Level 5 in either English or French for the four language skill areas (reading, writing, listening, speaking), as set out in the Canadian Language Benchmarks and the Niveaux de Compétence linguistique canadiens, as demonstrated by the results of an evaluation conducted by an organization or institution designated by the Minister for the purpose of evaluating language proficiency under Subsection 74(3) of the Immigration and Refugee Protection Regulations (SOR/2002-227) (“IRPR”);
3. Have completed at least one year of post-secondary education during which the applicant was in good standing at the educational institution, whether or not the applicant obtained an educational credential; and
4. Have in the form of transferable and available funds, unencumbered by debts or other obligations, an amount that is equal to one half of the amount identified (in the most recent edition of the publication concerning low income cut-offs published annually by Statistics Canada under the Statistics Act for urban areas of residence of 500,000 or more) as the minimum amount of before-tax annual income necessary to support the foreign national and his or her family members.

According to Subsection 2(4) of the Instructions, no more than five foreign nationals may seek permanent residence as members of the Start-Up Business Class, pursuant to the same business venture.

Subsection 2(5) of the Instructions also clarifies that a foreign national will not be considered a member of the Start-Up Business Class if he or she intends to participate (or has participated) primarily for the purpose of acquiring a status or privilege under IRPA and not for the purpose of engaging in the business activity for which the commitment was intended.

Designated Angel Investor Groups and Venture Capital Funds

The Instructions list all of the entities that qualify as designated angel investor groups or venture capital funds, for the purposes of the Start-Up Business Class.  The list of designated angel investor groups appears in Schedule 1, and includes the following entities:

1. Angel One Network Inc.;
2. First Angel Network Association; and
3. Golden Triangle Angel Network.

The list of designated venture capital funds appears in Schedule 2, and includes the following entities:

1. Advantage Growth (No.2) L.P.;
2. BDC Venture Capital;
3. Blackberry Partners Fund II LP (d.b.a. Relay Ventures Fund II);
4. Celtic House Venture Partners Fund III L.P.;
5. Celtic House Venture Partners Fund IV LP;
6. DRI Capital Inc.;
7. Golden Opportunities Fund Inc.;
8. INOVIA CAPITAL INC.;
9. New Brunswick Innovation Foundation Inc.;
10. Northwater Intellectual Property Fund;
11. OMERS Ventures Management Inc.;
12. Ontario SME Capital Corporation;
13. Panagea Ventures Fund III, LP;
14. PRIVEQ III Limited Partnership;
15. PRIVEQ IV Limited Partnership;
16. Quorum Investment Pool Limited Partnership;
17. Quorum Secured Equity Trust;
18. Rho Canada Ventures;
19. Summerhill Venture Partners Management Inc.;
20. Tandem Expansion Management Inc.;
21. Vanedge Capital Limited Partnership;
22. Version One Ventures;
23. Wellington Financial LP;
24. Westcap Mgt. Ltd.; and
25. Yaletown Venture Partners Inc..

Qualifying Business

According to Subsection 7(1) of the Instructions, a “qualifying business” includes a corporation incorporated in and carrying on business in Canada if, at the time the commitment is made by the designated angel investor group or venture capital fund:

1. The applicant holds at least 10% of the voting rights attached to all outstanding shares of the corporation; and
2. No person or entities, other than qualified participants, hold 50% or more of the voting rights attached to all outstanding shares of the corporation.

The term “qualified participant” includes: (a) the applicant in respect of the business; (b) a foreign national who has been issued a permanent resident visa as a member of the Start-Up Business Class in respect of the business; (c) a designated angel investor group; or (d) a designated venture capital fund.

Subsection 7(2) clarifies that a business that is not incorporated at the time of the commitment is still considered a qualifying business if the incorporation is conditional upon the issuance of a permanent resident visa to one or more applicants in respect of that business.

Form of Commitment

OP 27 describes a “commitment” as an agreement between the applicant and the investing entity to establish and incorporate a qualifying business in Canada.  Proof and details of this agreement must be submitted by the designated angel investor group or venture capital fund directly to CIC in the form of a completed Commitment Certificate.

A Commitment Certificate is a document which records important information regarding the agreement between the applicant and the investing entity.  The purpose of the Commitment Certificate is to summarize pertinent details of the commitment between the investing entity and the applicant for the purposes of the application for permanent residence.

The Commitment Certificate must be sent directly to CIC by the designated angel investor group or venture capital fund.  The applicant will also receive a letter of support from the designated entity, which he or she will submit with the application.  Upon receipt of the application, CIC will verify that the corresponding Commitment Certificate has been received from the designated investing entity, and that it is still valid.

As stated in Subsection 2(4) of the Instructions, no more than five foreign nationals may be considered members of the Start-Up Business Class in respect of the same business.  Accordingly, the Commitment Certificate issued by the designated angel investor group or venture capital fund may not identify more than five applicants.

If two or more applicants seek permanent residence based on the same business, the commitment may be conditional on the issuance of permanent residence to one or more applicants who may be considered essential to the project.  An essential person is a foreign national who is considered, by the investing entity, to be essential to the business being established under the program.

A section in the Commitment Certificate will identify which applicants in a group are deemed to be “essential.”  If the application for an essential person is refused for any reason, all other applications related to that commitment will also be refused.

There is no limit to the number of designated entities that can support a commitment.  However, when there are multiple designated entities acting in syndication, only one Commitment Certificate will be issued containing all the details and requirements of all participating designated entities.  The syndicate will choose a lead designated entity that will be responsible for compiling and submitting the Commitment Certificate.

Peer Review of Commitments

According to Section 11 of the Instructions, an immigration officer may request that a commitment in respect of a qualifying business be independently assessed by a peer review panel established by an industry association representing the type of entity making the commitment. For example, if a designated angel investor group made the commitment, the National Angel Capital Organization would be responsible for establishing the peer review panel.  Similarly, if a designated venture capital fund had made the commitment, Canada’s Venture Capital and Private Equity Association would be responsible for establishing the peer review.

Although a peer review may be initiated if the immigration officer is of the opinion that such an assessment would assist in making a decision, it may also be made on a random basis.  A peer review panel will only verify if the investing entity has conducted the proper checks and investigations according to industry standards, and will not give a judgment on the wisdom or feasibility of the proposal.  Assessments must be considered by the immigration officer when making his or her decision but will not be considered binding on the officer.

Minimum Language Proficiency

As stated in Section 2(2) of the Instructions, applicants under the Start-Up Business Class must establish a level of proficiency of at least benchmark Level 5, in either English or French.  Language proficiency must be demonstrated through an evaluation conducted by an approved organization or institution.

According to OP27, the results of such an evaluation are considered conclusive evidence of the applicant’s proficiency in the official languages of Canada; immigration officers may not consider other evidence of language ability.  At the present time, the following are considered designated language testing organizations:

1. Paragon Testing Enterprises Inc. and the University of British Columbia administer the Canadian English Language Proficiency Index Program (“CELPIP”).  CELPIP offers the “CELPIP-General (CELPIP-G)” and “CELPIP-Academic (CELPIPA)”; only the CELPIP-G is accepted for CIC purposes.
2. Cambridge ESOL, IDP Australia, and the British Council administer the International English Language Testing System (“IELTS”).  IELTS offers “General Training” and “Academic” options; only the “General Training” tests are accepted for CIC purposes.
3. The Paris Chamber of Commerce (Chambre de commerce et d’industrie de Paris) administers the Test d’évaluation du français (“TEF”).

Education Requirements

As stated in Subsection 2(2) of the Instructions, an applicant must have completed at least one year of post-secondary education while he or she was in good standing at the educational institution.  OP 27 clarifies that distance learning post-secondary institutions are also eligible for consideration.

According to OP 27, proof of education should be in the form of transcripts and a letter of good standing, or certificate or diploma or degree.  Immigration officers will review the documentation provided by the applicant in order to determine the following:

1. Has the applicant completed at least one year of post-secondary study?  The requirement is met based on the standards that exist in the country of study. For example, a technical credit may be the equivalent to a high school diploma in Canada but in the country of study it is considered to be post-secondary.
2. Was the applicant in good standing while he or she was in attendance at the post-secondary educational institution?  Applicants are considered in good standing based on criteria established by the educational institution.  For example, the institution could have a policy which states that a person is not in good standing if they have an unpaid debt such as tuition fees or if they have not returned books to the library.

As stated in Subsection 2(2) of the Instructions, it is not necessary for the applicant to obtain any diploma, degree or trade or apprenticeship credential as a result of having completed at least one year of post-secondary study.

Settlement Funds

As mentioned in Subsection 2(2) of the Instructions, the applicant must clearly demonstrate that he or she has sufficient and available settlement funds.  These funds must be available, transferable, and unencumbered by debts or other obligations.

According to OP 27, immigration officers must be satisfied that the applicant has at his or her disposal (with sufficient liquidity and with the ability to transfer those assets) the necessary threshold of funds to support his or her establishment in Canada upon arrival.  These settlement funds must meet the requirements at the time that the application is made, as well as when the application is finalized.

The amount of funds is assessed according to the applicant’s family size using 50% of Statistics Canada’s most current low income cut-off for urban areas having populations of 500,000 or more.  At the present time, applicants must possess funds that are equal to or greater than the amount listed below for each family size:

Substituted Evaluation

Section 12 of the Instructions authorizes immigration officers to substitute their own evaluation, if they believe that the requirements described in Subsection 2(2) are not a sufficient indicator of whether the applicant will become economically established in Canada.  All substituted evaluation decisions require the written concurrence of a second immigration officer.

Although very discretionary, substituted evaluation permits an immigration officer to approve an applicant even if he or she is unable to satisfy one or more requirements of the Start-Up Business Class, other than the requirement of a commitment from a designated angel investor group or venture capital fund.  For example, an otherwise eligible applicant who does not possess sufficient language proficiency, post-secondary education, or available funds may still be approved under substituted evaluation.

Annual Numerical Limits and Program Duration

As the Start-Up Business Class is a pilot program established under Section 14.1 of IRPA, no more than 2,750 applications may be processed per year.  Although the Instructions do not specifically mention a numerical limitation, by statute, the Start-Up Business Class may not exceed this annual limit.

Section 14.1 of IRPA also limits the duration of the pilot program to five years, commencing on the day on which the Instruction becomes effective; no amendment to or renewal of an instruction may extend the five-year period.  As the Start-Up Business Class began accepting applications on April 1, 2013, it will sunset on April 1, 2018.  However, if the pilot program proves successful, the Canadian Government may amend IRPA to permanently establish the Start-Up Business Class before this date.

On January 24, 2013, Citizenship, Immigration and Multiculturalism Minister Citizen Jason Kenney (the “Immigration Minister”) announced that Citizenship and Immigration Canada (“CIC”) would launch a Start-Up Visa Program to recruit innovative immigrant entrepreneurs who will create new jobs and spur economic growth. Of course, a formal announcement relating to this program was expected for some time; I previously reported that the Immigration Minister announced consultations on the possible creation of such a program back in April 2013.

Although I have yet to be recognized for playing any role in the creation of the Start-Up Visa Program, I first raised the idea of a start-up visa directly with the Immigration Minister near the end of 2011, during a fundraiser for a local Conservative party candidate. At the time, Congress was considering the Start-Up Visa Act of 2011, which proposed a similar program for the United States. I explained that the Start-Up Visa Act of 2011 was unlikely to pass in Congress but this gave Canada a unique opportunity to attract entrepreneurs who might otherwise be destined for the United States.

Although the Immigration Minister initially thought that a start-up visa program would simply be a variation of the existing Entrepreneur Class (which is currently on hold), I explained that a “start-up” visa program would differ from existing investor and entrepreneur options to the extent that the entrepreneur would not need to be the source of investment capital. Such a program would enable entrepreneurs who establish start-up businesses using capital contributed by third parties, such as venture capital firms or angel investors, to seek permanent residence in Canada. By the end of our discussion, he warmed up to the idea and, in April 2012, the Immigration Minister formally announced consultations in connection with such a program.

The Start-Up Visa Program is a pilot program that will commence on April 1, 2013, and will run for five years. Although the most recent announcement does not mention whether there will be an annual cap, the April 2012 announcement indicated that these types of pilot programs would be limited to 2750 applications per year. If the Start-Up Visa Program proves successful during the five-year trial period, CIC may formally introduce it as a new economic class in the Immigration and Refugee Protection Regulations.

Foreign entrepreneurs seeking permanent residence under the Start-Up Visa Program will require the support of a Canadian angel investor group, venture capital fund or a business incubator before they can apply. Pursuant to agreements signed with CIC, these organizations will recommend which of their members should be designated as eligible to participate in the Start-Up Visa Program, establish expert peer review panels to assist CIC officers in case determinations, and provide assurance that industry standards of due diligence were followed.

Initially, Canada’s Venture Capital & Private Equity Association and the National Angel Capital Organization will be active partners in the Start-Up Visa Program. CIC also intends to include the Canadian Association of Business Incubation as a partner in the program at some point in the near future. The process of designating which Canadian angel investor groups and venture capital funds will be eligible to participate in the Start-Up Visa Program will begin early this year. The process of designating which Canadian business incubators will be eligible to participate in the Start-Up Visa Program will begin at a later date.

Foreign entrepreneurs will also have to meet certain criteria regarding language proficiency and educational qualifications. The full set of criteria will be published in the spring of 2013.

On June 29, 2012, Citizenship and Immigration Canada (“CIC”) published Operational Bulletin 438 (“OB 438″), which provided guidance on the recently issued Ministerial Instructions that came into force on July 1, 2012.

OB 438 states that a temporary pause has been placed on new applications filed under the Federal Skilled Worker Program (“FSWP”), excluding applications received under the PhD eligibility stream and those with a qualifying offer of Arranged Employment (“AE”). The effective date of the temporary pause was July 1, 2012. As of that date, the only FSWP applications that will be accepted are those filed by:

1. Skilled workers with a valid offer of arranged employment.
2. International students enrolled in a PhD program at a provincially or territorially recognized private or public post-secondary educational institution in Canada who:
   • Have completed at least two years of study towards a PhD;
   • Are in good academic standing at the time they apply;
   • Are not recipients of an award requiring them to return to their home country to apply their knowledge and skills; OR

   International students who graduated from a PhD program at a provincially or territorially recognized private or public post-secondary educational institution in Canada who:

   • Graduated no more than 12 months before the date their application is received;
   • Did not receive an award which required them to return to their home country to apply their knowledge and skills (or did, but have satisfied the terms of the award).

A maximum of 1,000 applications from the PhD eligibility stream will be considered for processing each year. Applications will be considered in the order they are received.

The first cap year for the PhD stream began on November 5, 2011, and will end on October 31, 2012. Unless otherwise indicated in a future Ministerial Instruction, the cap will be automatically reset on November 1, 2012.

According to OB 438, a temporary pause has also been placed on new applications filed under the federal Immigrant Investor Program (“IIP”). Effective July 1, 2012, no new IIP applications will be accepted by CIC; there are no exceptions.

On April 18, 2012, Citizenship, Immigration and Multiculturalism Minister Jason Kenney launched consultations on the possible creation of a new program to attract immigrant entrepreneurs. Citizenship and Immigration Canada (“CIC”) will consult with industry associations in the development of a “start-up” visa program for innovative entrepreneurs in the coming months.

A “start-up” visa program differs from existing investor and entrepreneur options to the extent that the entrepreneur is not required to be the source of investment capital. Such a program would enable entrepreneurs who establish start-up businesses using capital contributed by third parties, such as venture capital firms or angel investors, to seek permanent residence in Canada.

Although the Government is only initiating consultations at this point, the proposed “start-up” visa program may ultimately resemble S. 565: StartUp Visa Act of 2011 (introduced in the United States Senate on March 14, 2011) and H.R. 1114: StartUp Visa Act of 2011 (introduced in the United States House of Representatives on March 15, 2011). S. 565 and H.R. 1114 (collectively, the “StartUp Visa Bills”) offer three options for immigrant entrepreneurs:

1. Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if a qualified U.S. investor agreed to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. After two years, their business must have created 5 new jobs and raised not less than $500,000 in additional capital investment or generate not less than $500,000 in revenue.
2. Immigrant entrepreneurs currently in the U.S.: (1) on an unexpired H-1B; or (2) who have completed a graduate level degree in science, technology, engineering, math, computer science, or other relevant academic discipline from an accredited United States college, university, or other institution of higher education would be eligible for a StartUp Visa if:
   • They demonstrate annual income of not less than 250 percent of the Federal poverty level or the possession of assets of not less than 2 years of income at 250 percent of the Federal poverty level; and
   • Have proven that a qualified U.S. investor agrees to financially back their entrepreneurial venture with a minimum investment of $20,000.

   After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.

3. Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if they have controlling interest of a company in a foreign country that has generated, during the most recent 12-month period, not less than $100,000 in revenue from sales in the U.S. After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.

Although these StartUp Visa Bills are unlikely to be passed by Congress, it is hoped that the Government of Canada will implement its own “start-up” visa program soon. If it does, it will gain a significant competitive advantage over the United States.

According to CIC, this “start-up” visa initiative is an example of the type of small-scale programs that would allow it to try innovative approaches to economic immigration. Under the proposed changes, CIC can create new, short-term programs under the Economic Immigration Class. These programs would be limited to no more than 2,750 applications per year and would end after five years. If a program proves successful during the five-year trial period and CIC wishes to maintain it, it would be required to formally introduce the new economic class in the Immigration and Refugee Protection Regulations.

On March 20, 2012, the Quebec Minister of Finance presented his speech on the 2012-2013 Budget. During the speech, he announced that an omnibus bill containing modifications to Quebec’s immigration program would be proposed shortly. Although it is a proposed bill, once enacted the immigration provisions will be retroactive to March 20, 2012. Therefore, these changes should be treated as if they are already in force.

The proposed bill will establish caps on the number of Quebec immigration applicants that may be accepted between March 21, 2012 (19:00 Quebec time) and March 31, 2013 (19:00, Quebec time). Under the proposed bill, there will be two groups of skilled workers:

1. Group 1 (No Numerical Limit) – This group will consist of the following:
   • Applicants who temporarily reside in Quebec as temporary workers and meet the eligibility conditions of the Programme de l’expérience québécoise (Temporary worker) (PEQ – Québec experience program for temporary workers) or are eligible to apply for a selection certificate under the regular program for skilled workers.
   • Applicants who have obtained a diploma awarded by a Quebec educational institution for studies done in Quebec or who are about to obtain that diploma and meet the eligibility conditions of the Programme de l’expérience québécoise (Quebec Graduate) (PEQ – Quebec experience program for Quebec graduates).
   • Applicants who reside temporarily in Quebec as foreign students, are eligible to apply for a selection certificate under the regular program for skilled workers, and are submitting their application in Quebec.
   • Applicants who reside temporarily in Quebec within the framework of a youth exchange program subject to an international agreement, such as a work holiday program. They must be working full-time in Quebec, be eligible to apply for a selection certificate under the regular program for skilled workers, and must be submitting their application in Quebec.
   • Applicants (or their accompanying spouses) who hold a diploma awarded by a teaching institution in an area of training allowing them to get 12 or 16 points under the area of training criterion of the selection grid for skilled workers. The number of years of study required to obtain the diploma must be at least equal to the number of years required to obtain that diploma in Quebec. This diploma must have been obtained less than five years before the date of the application. Failing that, they must have practiced a profession or trade, in an area related to that diploma, on a full-time basis and for at least one year out of the five years preceding the date of their application.
   • Applicants (or their accompanying spouses) who hold an employment offer made by a Quebec employer and validated by the Minister of Immigration and Cultural Communities.
   • Applicants who have received notice from Citizenship and Immigration Canada that their application for permanent residence in Canada is eligible for processing.
   • Applicants who reside temporarily in Quebec, who were Canadian citizens at one time, and who are submitting their application in Quebec.
2. Group 2 (Subject to a Numerical Limit of 14,300 Applications) – This group will consist of the following:
   • Applicants (or their accompanying spouses) who hold a diploma, awarded by an teaching institution in an area of training allowing them to get 6 points under the area of training criterion of the selection grid for skilled workers. The number of years of study required to obtain the diploma must be at least equal to the number of years required to obtain that diploma in Quebec. This diploma must be obtained less than five years before the date of the application. Failing that, they must have practiced a profession or trade, in an area related to that diploma, on a full-time basis and for at least one year out of the five years preceding the date of the application.
   • Applicants (or their accompanying spouses) who hold a Quebec diploma or the equivalent of a Quebec diploma that requires at least one year of full-time studies. This diploma was must have been obtained less than five years before the date of the application. Failing that, they must have practised a profession or trade, in an area related to that diploma, on a full-time basis and for at least one year out of the five years preceding the date of the application.

No other skilled workers will be permitted to apply for a Quebec Certificate of Selection.

The proposed bill will also establish caps on the number of business immigrants who may apply for a Quebec Certificate of Selection. Applicants under the popular Quebec investor program will now be subject to a cap of 2,700 applications. Applicants under the Quebec entrepreneur and self-employed categories will be subject to a cap of 215 applications.

Update: On April 12, 2012, the Minister of Immigration and Cultural Communities announced that it had already reached the 2700-applicant cap applicable to investors.

On November 22, 2011, in response to an assessment of Iran’s nuclear program by the International Atomic Energy Agency (“IAEA”), Canada imposed new sanctions under the Special Economic Measures Act, S.C. 1992, c. 17 (“SEMA”). Among other things, the Regulations Amending the Special Economic Measures (Iran) Regulations (the “Regulations”) prohibit financial transactions with Iran, subject to limited exceptions.

For example, the prohibition on financial transactions does not apply to payments made pursuant to contracts entered into prior to November 22, 2011. In addition, Canadians with relatives living in Iran are still able to send funds to family members, provided those relatives are not specifically listed individuals and provided transactions do not exceed $40,000.00.

Unfortunately, these exceptions are of limited benefit to many Iranian citizens who may be seeking permanent residence under one of Canada’s immigrant investor programs. Iranians applying under the Federal Immigrant Investor Program, the Quebec Investor Program, and even investor streams under various Provincial Nominee Programs may be subject to these economic sanctions.

On January 20, 2012, Citizenship and Immigration Canada (“CIC”) issued Operational Bulletin 378 (“OB 378″), which provides instructions on how it will apply these economic sanctions. According to OB 378, CIC offices are instructed to continue processing applications for permanent and temporary residence of Iranian nationals and persons residing in Iran in accordance with normal procedures. However, in cases where applicants need to show that they can or have transferred funds to Canada, such as the Federal Investor Class, applicants should be informed that they may face restrictions in transferring funds to a Canadian financial institution and should be referred to the text of the Regulations.

OB 378 further states that persons affected by the sanctions on financial transactions, whether they be applicants for a visa or already in Canada, may apply for permits from the Department of Foreign Affairs and International Trade (“DFAIT”) that authorize specified activities or transactions that are otherwise prohibited under the sanctions. This permit process should be taken into consideration by CIC officials when assigning a deadline for submitting evidence that funds can be transferred to Canada or an investment made, prior to refusing an application from an Iranian national or person in Iran for failure to transfer the required funds or investments.

Fortunately, the above economic sanctions do not appear to prohibit Iranian citizens from qualifying as immigrant investors through the investment of funds held in third countries. Iranian applicants fortunate enough have access to such funds should not be affected by the Regulations.