Why Provincial Nominee Programs Should Not Be The Investors’ Top Choice

Foreign entrepreneurs looking to move to Canada often consider investment pathways offered by Canadian provinces. Many Canadian provinces have developed business immigration programs to attract wealthy individuals to invest in those provinces. The provinces offer nominations for permanent residency to wealthy investors who, in exchange, make eligible investments and commit to settling in that province as business owners.

The conditions of the program and the amounts of minimum investment vary from province to province, but in general, the process involves 2-steps:

(1) getting the provincial nomination first, and then

(2) applying for permanent residence to the federal government.

Although there are many interesting provincial nominee programs with modest investment amounts (as low as $150,000 for Prince Edward Island and Manitoba) and low English/French language skills (as low as CLB 4 for Ontario and British Columbia, for example), business streams of Provincial Nomination Programs are not our favourite choice when advising our clients.

And here is why:

PNPs take a long time

Since PNPs are a 2-step process (getting nomination first and then applying for permanent residence), it takes on average 2 to 4 years for foreign investors to complete the application process and receive permanent residence status in Canada.

PNPs require higher investment amounts

PNPs generally require a higher investment, around $400,000 on average. For example, British Columbia requires an applicant to be worth at least $800,000 and to invest at least $400,000 in more than 33.33% of an eligible business in that province.

PNPs are too competitive

Many provinces operate their investment programs through the expression of interest system, which makes the program very competitive. All prospective investors are required to first register their profiles with the province of their choice, and the provinces periodically select the best candidates from the pool of candidates to apply for nominations. All candidates in the pool are rated against each other based on certain criteria. Generally, those with higher net worth, bigger investment amounts, good language skills and investment proposals in key economic industries will be nominated to apply for permanent residence.

PNPs are very bureaucratic

Generally, the PNP nomination process is lengthy and involves many steps.

First, candidates must register their profile with the province and express their interest to be nominated for the PNP program. Second, once the candidate is selected from the pool and invited to apply for nomination, the candidate must successfully pass due diligence conducted by the province and provide proof of how capital has been accumulated. Third, many provinces require candidates to visit that province before submitting their applications. Fourth, almost all provinces will conduct in-person interviews with the prospective candidates to check if the candidates understand the business environment in that province and whether or not their proposed investment is well-researched and feasible.

Fifth, once candidates pass the interview with the province, they usually sign a performance agreement with that province and invest in a business in that province. Sixth, they also have to play an active role in the management of their business in that province and will often be required to spend at least 75% of their time in that province running their business.

Seventh, once the candidate meets all the conditions of the Performance Agreement with the Province (such as to invest the minimum required funds, create at least 1-2 jobs for Canadians and operate a business in that province for at least 12 months), they may apply for Provincial Nomination. Eighth, if the province issues the Nomination Letter, the candidate may then apply for permanent residence status in Canada as a business investor under the PNP program to the federal government. The federal government’s process is a separate process altogether.

You must stay in one province

While you wait for your paperwork to be processed in the PNP program, you must maintain a primary residence in that province. Some provinces may disqualify you if you have ties to another province, including if your kids attend school in another province or you own a property in the province other than your home province.

Permanent Resident status is not guaranteed

Provinces may refuse to nominate foreign investors for permanent residence if the conditions set in the Performance Agreement with the province are not met.

Who is an ideal candidate for investor PNPs?

Given the disadvantages of provincial business immigration programs, we do not advise our clients to choose this pathway to permanent residence, unless our clients have a high net worth, good education, substantial amounts of cash to invest, significant managerial or business ownership experience, adequate language skills and family ties in the province of their choice.

The better approach to business immigration

If you are a high-net-worth individual considering moving to Canada through investment, there are better pathways to achieve your immigration goals.

There are many immigration programs offered by the federal government to foreign investors and entrepreneurs who have sufficient funds to buy/start a business in Canada. We suggest you take a closer look at these programs first and see if you qualify under any of them.

For example, you can consider the following business immigration programs:

  • Start-up Visa Program
  • Intra-Company Transfer Program
  • Owner-Operator Program
  • Treaty Investor Program
  • Significant Benefit Program
  • Self-Employed Program

Apply for PNPs as a last resort

The PNP route has too many disadvantages, therefore, consider it as a last resort. First, try the other options available for businesspeople.

At Sobirovs Law Firm, we focus only on business immigration. That is, we help entrepreneurs, business owners and investors with sufficient funds and business experience to relocate to Canada using the most suitable immigration programs. We take time to learn about you, your goals and capabilities, and choose the best pathway(s) to Canadian permanent residence and, ultimately, Canadian citizenship for you and your family.

Contact us today and see how we can help you and your business!

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