As for first impressions, the Immigrant Investor Venture Capital Pilot Program evokes nothing but disappointment. It can be said quite definitively that business immigration at the federal level is virtually closed.
The new Immigrant Investor Venture Capital Pilot Program targets such a narrow range of businessmen that it cannot be taken seriously. The existence of this program serves a purely formal role: to show that Canada's immigration toolkit includes a stream for businessmen, while the practical value of this program is highly questionable.
The first thing to note is that this is a pilot project. That is, essentially an experiment. If the program works successfully, it will be kept. If not, it will be replaced with something else.
Second, and very important: only 50 applications will be processed under this program. Apparently, after that, they will decide what to do next.
The program targets investors who must invest money into the Canadian economy. The following requirements are imposed on applicants:
1. The investor must invest $2 million for a period of 15 years into the IIVC program fund. The funds from this fund will go to finance innovative Canadian startups with high growth potential. The investment is risky, meaning that the government does not guarantee its return after 15 years.
2. The investor must have at least $10 million of personal funds earned through legal profitable business. He must also show the source of accumulation by providing a report from a designated due diligence service provider. That is, an independent audit is required.
3. The investor must have a completed professional education and provide a diploma/certificate assessment from an evaluation organization in Canada for equivalence to Canadian education.
4. The investor must provide test results for knowledge of one of Canada's official languages (English/French).
A total of 500 applications are planned to be accepted, from which 50 will be randomly selected. Those applications that fall into this number are promised to be processed in a short time (no more than 6 months).
These are the requirements announced so far. The final requirements for this program will be announced at the time it is implemented (currently, end of January 2015 is being discussed).
Nothing is yet known about the application and processing procedure. Therefore, we present only our assumptions based on an analysis of published information.
In our opinion, it looks as though the selection of applicants for this program has been approached using the Express Entry system templates. Probably, first only a completed form with information about the applicant will be submitted (most likely online). After 500 applications that meet the passing requirements are collected, applications will be closed. Then, from the collected 500 applications, 50 will be selected for further processing.
Selected applicants will apparently receive an invitation—akin to an Invitation Letter in the Express Entry system. And if we continue the analogy with the Express Entry system, a limited time (e.g., 90 days) will be given to submit all necessary documents, including a report from a designated due diligence service provider on the legitimacy of income and accumulated funds. Under Express Entry, 60 days are given.
How 50 applications will be selected from 500 is not explained. It could be either a lottery or a selection by immigration officials at their discretion, which immediately raises questions and highlights potential problems. In any case, these are only preliminary conclusions. How this will work in practice will become clear by the end of January 2015.
It is worth recalling that the previously operating federal business programs Investor and Entrepreneur were closed on June 19, 2014. At that time, there were 85,000 pending applications in Canada's immigration offices, which were simply returned. In exchange, the opening of new business programs was promised, which many potential applicants were eagerly awaiting. In effect, the announcement of the Immigrant Investor Venture Capital Pilot Program has buried those hopes.
First, we are talking about an extremely small number—only 50 applications. Typically, up to 10,000 people per year passed through business programs. Specifically, in 2006, 12,077 immigration visas were issued under them, and in 2005, 13,469 immigration visas. Even under another business-class program, the Start-Up Visa Program, a quota of 2,750 visas per year is allocated. In the case of the IIVC Program, it is, we recall, only 50 applications.
Second, the program lacks any transparency. A total of 500 applications are accepted, and from them, somehow only 50 are selected. Who will select these applications, and how?
Most importantly, the requirements under this program are quite stringent. It is not even about the $2 million to be invested or the $10 million of personal funds. There will be many people who can easily meet these conditions. The issue is that, in addition to having the funds, additional work is required that takes time, and business people do not have much of it. Specifically, a full audit must be conducted to obtain a conclusion on the legitimacy of income and available funds. A relevant education is required, with diploma verification. An English or French language proficiency exam must be taken, which immediately raises the question—which successful businessperson has that much time to prepare for this exam?
Finally, we are talking about investing two million dollars for 15 years in extremely risky ventures (and startups are exactly that kind of business). With a very high probability that this money will never be recovered. And there are no guarantees that, even if you agree to these terms, your application will be selected. This approach looks, at the very least, strange.
Obviously, this program has no practical value for most people who would like to get to Canada through business programs. Unfortunately, for many, the path through the Federal Skilled Worker Program is also closed. It is no secret that previously many businessmen immigrated as skilled workers because they easily met the requirements of this program. In the new version, under the Express Entry system, this opportunity is minimized due to age requirements – preference is given to young people aged 20-29.
What options remain for businessmen?
First, the business programs of the province of Quebec. For now, these programs are still in their old version, which are extremely attractive. In particular, in December, Quebec announced the resumption of applications for the Investor program. The rules remain the same:
– must have personal assets of at least $1.6 million;
– invest $800 thousand in an investment fund with a guarantee of return after 5 years, with the possibility of attracting third-party financing;
– demonstrate intention to settle in Quebec;
– demonstrate business management experience for two out of the last five years.
A total quota of 1,750 applications per year is allocated. Applications in 2015 will be accepted from January 19 to March 20. Those applicants who demonstrate a high level of French language proficiency will be accepted in addition to the specified quota.
Second, the federal Start-Up Visa program. Its implementation is still going slowly, as innovative projects are niche items, and finding new Bill Gates and Steve Jobs in large numbers is unrealistic. Moreover, investors do not seem eager to invest even in what exists: the launch of the Immigrant Investor Venture Capital Pilot Program is clearly an attempt to fund those startups that investment funds did not dare to invest in.
Nevertheless, large quotas have been allocated for the Start-Up Visa program, despite the negligible number of those who have used it. Moreover, the government is extremely interested in making this program work. Therefore, if you have a good idea and a well-developed project, at the moment the federal Start-Up Visa program looks most promising for immigration.
It is worth recalling that under the Start-Up Visa program, up to 4 people can apply per project, and they do not have to be inventors or developers. The team behind the project can include marketing specialists, managers, etc.
Third, there are provincial business programs. True, many of these programs have their nuances and complexities, and are not as straightforward as they seem, but nevertheless, there is a possibility of applying through them.
I would especially like to highlight the Ontario Investor program as the most reliable and promising. In contrast to the new federal Immigrant Investor Venture Capital Pilot Program, it is much more flexible, its requirements are softer, and it has a much higher degree of investment security.
Finally, there remains a very faint hope that the federal government will announce other programs for businessmen and investors, with a much larger quota and softer conditions. However, the likelihood of this is very low, and if it does happen, it is unlikely to be soon.
Елена РЯБИНИНА.
«Русский Торонто»