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.
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
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
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
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
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
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
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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