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IMPACT – MEDIUM
What is the change? Citizenship and Immigration Canada is planning to launch an Immigrant Investor Venture Capital pilot program this month in an effort designed to attract a small number of wealthy investors and their families to Canada.
What does the change mean? The program will allow up to 50 foreign investors to qualify for permanent residence in Canada. To be eligible, each applicant must be able to invest 2 million Canadian dollars (about US$1.65 million) for 15 years and demonstrate a net worth of at least CA$10 million.
Background: Canada terminated its Immigrant Investor Program and Entrepreneur Program in June 2014. Officials are hoping that the pilot program will lure wealthy investors to Canada without experiencing the same backlogs that plagued the past investor programs.
Investors will be required to make CA$2million of nonguaranteed investments for 15 years in order to qualify. That money will be used to invest in Canadian start-up companies deemed to have high-growth potential. Other eligibility factors for investor applicants include demonstrated proficiency in either English or French, a Canadian post-secondary degree or the foreign equivalent, and a legally obtained net worth of at least CA$10 million.
After it begins accepting applications, Citizenship and Immigration Canada will review a maximum of 500 applications within a set timeframe. Applications will then be selected at random until 50 applications are approved and finalized. Those 50 applicants will be eligible for permanent residence in Canada.
BAL Analysis: The pilot program will provide up to 50 investors and their families with permanent residence in Canada and could boost the prospects of Canadian start-up companies. It remains to be seen, however, whether the pilot program will be able to avoid backlogs that plagued past foreign investment programs and how broadly the economic impact of the new program will be felt. BAL will continue to monitor the program as it is unveiled.
This alert has been provided by the BAL Global Practice group and our network provider located in Canada. For additional information, please contact your BAL attorney.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
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