Buying a Business in Canada: A Guide for Foreign Entrepreneurs

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Immigration To Canada Through Business Ownership

A Guide For Foreign Investors Buying a Business in Canada

If you want to relocate to Canada as a foreign investor or entrepreneur, buying an established business in Canada can be a good option for becoming eligible under the Entrepreneur Work Permit Program.

Finding a solid business with excellent growth potential for your immigration journey is complicated. You need to select a business that fits your skills, previous experience, and financial goals. In addition, the business you plan to buy must meet the requirements set by the Canadian immigration authorities.

In this article, we explore how foreign entrepreneurs should go about finding the right business to buy in Canada.

Step 1: Focus on Businesses that the IRCC Likes

Suppose you plan to move to Canada as a business owner or an owner-operator. In that case, you must demonstrate to Canadian immigration authorities that your business activities in Canada will bring “significant economic benefit” to Canada. You can demonstrate “significant economic benefit” in several ways, including:

  • Option 1: buying a business in key economic industries or sectors;
  • Option 2: buying a business that is engaged in “significant benefit” activities; or
  • Option 3: investing a substantial amount of money into a business that will create employment opportunities for Canadians.

Option 1: Preferred Industries & Sectors

Agriculture, including food/beverage production and food processingInformation and communication technology
AquacultureInternational Education
Aviation/aerospace

Mining/Mineral Development
Biomedical (includes research and development, manufacturing, etc.)Mining & Natural Resources, Forestry
CybersecurityRegistered Patents
Cultural IndustriesTransportation
Energy or Natural Gas SectorTourism, tourism products, attractions, services, and facilities
ExportsFintech
FarmingFilm and Video Production
Financial ServicesGreen Economy

Option 2: Significant Benefit Activities

Developing new products & servicesAdopting new technology
Developing innovative approaches to traditional businessesIncreasing exports from Canada
Value-added businesses
Increasing research and development, and technology commercialization
Transferring technology and specialized knowledgeProviding products or services to an under-served local or regional market

Option 3: Significant Economic Impact

  • Investment of at least $250,000 into a business in Canada;
  • Job creation/retention for at least 2 Canadians; and
  • A viable business that can generate sufficient revenue to pay wages to all its employees.

Businesses that the IRCC generally dislikes

bed and breakfastsautomated car wash operations
hobby farms and home-based businessesscrap metal recycling
payday loan, cheque cashing, money changing and cash machine businessesbusinesses selling used goods (excluding businesses that provide value-added services such as repairs, refurbishing, or recycling)
pawnbrokersreal estate brokerage, insurance brokerage, or business brokerage
tanning salonsreal estate development activities
DVD rental storesgoods trading businesses (e.g. import/export), unless value add is demonstrated
coin-operated laundriesbusinesses involved in producing, distributing, or selling pornography or sexually explicit products or services, or providing sexually oriented services

Step 2: Research & Select the Right Business

In your business search, start by searching the all-powerful Internet. There are several sites where owners list their businesses, such as Business for Sale, Business Sell Canada, BuyAndSellBusiness.com, and even the Canadian Realtor site. You can narrow your search by province or even the city of your choice on these sites.

While those sites are reliable, you can’t trust every website that claims to have business listings. Scammers tend to frequent places like Kijiji and Craigslist because they’re unregulated, and it’s easy for the scammer to appear legitimate.

A helpful hint: you’re unlikely to find a profitable business with genuine potential for anything less than around $250,000. If a business is for sale for less than that, it is probably not a very profitable business. However,  it is also true that due to the COVID pandemic, you may be able to buy great businesses for a very reasonable price. You can read our article on how the COVID pandemic improved foreign investors’ chances of finding great businesses in Canada.

Call a Broker

Another route is to work with a business broker. These professionals specialize in finding businesses for sale and helping you through the buying process.

A business broker can be a sound investment because they will save you countless hours of searching, but you’ll also benefit from their expertise. Check out brokers like Western Canada Business Brokers, Sunbelt, or Aldrin Raphael Business Brokers.

Narrow the Selection

After finding a few businesses for sale that interest you, start with some basic fact-finding.

Either contact the businesses themselves or have your broker reach out to them for the company’s corporate tax returns for the past three years. In Canada, they will be called T2 Corporate Income Tax Returns, Schedule 100, and Schedule 125. You should also request their filings for the current year for the Goods and Services Tax/Harmonized Sales Tax (GST/HST).

These documents give you an initial look into the business’s gross sales so you can compare your options. While it’s only the start of your research into the financial aspect, it provides a practical starting point.

If possible, it’s a good idea to meet with the owners of your top options. Ask the owners why they’re selling their businesses. Spend a few days in and around each business to learn more about the customers, the typical sales volumes, and how the operation runs.

Our Tips:

 No matter which strategy you choose, make sure that the business you select meets the following criteria:

  • Active and operational business (preferably with 3+ years of history)
  • It has at least two employees (the more employees it has, the better)
  • It is generating sufficient revenue to cover most of the expenses (at least $300,000+)
  • Your background or skillset is relevant to the business you plan to operate in Canada
  • There is a strong potential for sustained commercial success

Want more tips? Please read our article about the top 3 tips for buying a business in Canada.

Step 3. Do Your Due Diligence

You’ve researched your options and zeroed in on one particular business you want to buy. Now it’s time to bring in the cavalry.

Hire a team of experienced professionals to take you through the due diligence process. This extensive research mission should uncover any issues the company may have, like bankruptcy filings, lawsuits, debt, zoning problems, or other disputes that would land in your lap. Your team will be able to assess the risks and determine how this should affect your purchase.

While due diligence is critical in any business purchase, it’s especially vital when buying a business in a foreign country. You would need professionals who have expertise in that country’s laws, liabilities, and regulations.

In addition to the due diligence specialists, you’ll need professionals who can help you through the purchase transaction. A business attorney and an accountant are must-haves.

If you’re planning to apply for immigration into Canada using your business, you’ll also need an immigration lawyer before you make your purchase. Your immigration lawyer will be able to investigate and determine if the business can suit your immigration needs.

How We Can Help with Buying a Business in Canada

Sadly, many immigrants end up buying businesses for immigration that they aren’t interested in, aren’t good at, and won’t make any money from or with! Using our network of local contacts and our understanding of the business culture in Canada, we can help you find opportunities that fit you and your immigration goals.

Our team will research and identify the best business to suit your business and immigration needs. We’ll review the business’s paperwork and make sure it is legitimate and profitable, ensuring that it will support your immigration needs. Finally, we’ll follow through with the purchase transaction for you.

Sobirovs Law Firm specializes in assisting foreign investors buying a business in Canada who plan to relocate to Canada. You can focus on your business while we focus on your permanent residence and, ultimately, your citizenship in Canada.

To start the process today, reach out to our team if you are a foreign entrepreneur or foreign investor buying a business in Canada.

Complete the Business Immigration Assessment Form

Bringing You, Your Tech Talent & Your Business To Canada

Get started and make your first step towards Canada. Book your 1-hour strategy meeting with a licensed Canadian immigration lawyer.

Immigration to Canada can be very complicated for businesses, business owners, and foreign employees. Hiring business immigration lawyers with the skill, experience, and patience is often crucial to successfully navigating this complex process. The experienced professionals at Sobirovs Law Firm offer tailored legal services in all business and corporate immigration matters. Contact us for more information on how we can help you meet your immigration needs.

We have worked with & represented clients from all walks of life. Always just one call – or click – away, weʼre happy to help you begin your & your familyʼs journey to Canada.

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Lucia Lu
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I cannot say enough good things about Sobirovs Law Firm’s exceptional team. My work permit application was quite complex and underwent numerous tests, including a rejection from the first attempt. Feruza developed a tailored strategy that contributed to the best chance of success in the resubmission, and her entire team presented my case with unparalleled expertise and genuine care. I want to express my heartfelt gratitude to Maggie, a phenomenal consultant who supported me in every step of the application, took the time to understand my unique situation and answered all my questions patiently. Her in-depth knowledge of the work permit program, proficiency in preparing my application and professional communication were reassuring and truly remarkable. Thanks to your team’s extraordinary work, I can now pursue my business goals in Canada with peace of mind. I am grateful for your hard work and the compassionate support you provided throughout this journey. You have my highest recommendation without any reservations.
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I would like to express my sincere gratitude to Ms. Feruza Djamalova, Ms. Judy Le and the entire team of Sobirovs Law Firm for their highly professional and excellent work in the complicated process of obtaining approval of our application for the business immigration program. I had several previous refusals over the course of 5 years. At that point, I contacted Sobirovs Law Firm. Their knowledge, competence, and perseverance turned my application into a success! My case was dealt by Feruza and Judy and I sincerely appreciate what an incredible job they have done and how much they have helped us. I believe they have a special gift and talent for assisting their clients. I want to particularly thank Judy for her patience and attention to detail in our case and also for thanks to her diligence, skill and attention to detail. I highly recommend Sobirovs Law Firm to anyone who wants to move to Canada using Business Immigration Programs and is looking for an immigration law firm capable of making a dream come true. They are highly professional and specialized in this field. I would like to extend my heartfelt thanks for their support.
Syed Namdaar Ali
Syed Namdaar Ali
My experience with Sobirov's was very rewarding. Starting from LMIA to Work permit it was a smooth sail. The entire team especially Yulia prepared my case painstakingly. They guided me on every little detail. Special thanks to Feroza, Farukh, Madina and the entire team for making this happen.
Bhrushank Ved
Bhrushank Ved
I had an amazing experience with the Sobirovs in applying for my C11 Work Permit. Feruza, Maggie, Judy and Yulia planned every step of the way and made the process a breeze. Benjamin was also quite knowledgeable and assisted me with the business plan for my application. I recommend Sobirovs team if you plan to expand your existing business or start a new business in Canada. Highly recommended!
Senol Ercetin
Senol Ercetin
Dear Sobirovs Team, I would like to thank you (Yulia, Faruk, Feruza, Madina) for taking care of us closely in obtaining the necessary work permits for the establishment of the Canadian branch of our company and the necessary visas for our family. You have carried out a flawless process. With sincere regards
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I had a great experience working with the Sobirov Law Firm. The entire team was professional, prompt, and meticulous in their approach. We started working with them on LMIA under GTS of the Temporary Foreign Worker Program. The time it took from creation of an Incorporation to submission and approval of our application was around 8 weeks. Work Permit approval took another 2 weeks. They also helped us get shared office space since it was a new experience for us. They guided us in finding a payroll service provider and a realtor to help with the relocation of the foreign employee. My sincere thanks to Feruza Djamalova and Rakhmad Sobirov (Attorneys), and Yulia Kan (Team Lead).

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