Chris Alexander, Canada's immigration minister says that Canada will announce details of an 'immigration investor venture capital pilot' scheme in 'a couple more months'. The visa will allow foreign nationals to gain Canadian permanent residence visas if they start up businesses in Canada.
Mr Alexander said that applicants would need to invest 'more than twice the amount' that was required under the previous Immigrant Investor Program (IIP). He also said the investment would need to be made for a longer period than under the IIP.
Mr Alexander made headlines in China in February when he announced that the IIP would be closed with immediate effect. At the time of his announcement, there were some 25,000 applications outstanding.
45,000 people lost visa chance when IIP closedBecause each successful IIP applicant was allowed to apply for permanent residence visas for his/her spouse and dependent children, it is believed that some 65,000 people lost the chance of moving to Canada. Of these, it is believed, some 45,000 were from China.
Mr Alexander was interviewed by Hong Kong paper, the South China Morning Post during a trip to Hong Kong in late March. He was initially asked why the IIP had been scrapped.
Mr Alexander said that there were four main reasons
- The program 'wasn't meeting its objectives'
- Many successful applicants who were issued with Canadian permanent residence visas under the IIP failed to move to Canada. This meant that the results of the program 'weren't good compared to our other economic immigration programs'
- The 'investment' that IIP applicants were required to make 'wasn't really an investment. It was a loan, strictly speaking, to the government of Canada'. He continued 'the amount was small [and] the investment performance was weak'
- There was a lengthy backlog which meant that applicants had to wait for a minimum of six years to have their applications processed. Some applicants had to wait for as long as a decade.
'Soft loans from absentees'Mr Alexander summed up the reasons for the IIP's axing by saying that the program was meant to be an immigrant investor program but 'instead we were getting soft loans from absentees'.
He said that those applicants whose applications had been terminated when the IIP was closed would also be able to apply under the new 'immigrant investor venture capital pilot' the details of which would be announced in 'a couple more months'.
He said that the new scheme would require 'a venture capital investment'. He said 'We're essentially going to say to investors, "In return for permanent residence, in return for the opportunity to do business with status from Canada, we're taking your money for a good long time to help create jobs, growth, opportunity in Canada and for global businesses, we hope, through venture capital-focused that will be managed in Canada, and privately managed, not managed by the government'.
New schemeAs Mr Alexander said, the formal announcement will be made later this year. At this point, the full details of the scheme will become clear. However, Mr Alexander did reveal the following details:
- The minimum investment will be higher than under the IIP. Under the IIP, applicants were required to invest CAN$800,000. Mr Alexander said that, under the new scheme, the amount would be 'more than twice' that amount
- The sum invested will have to be invested for longer than under the IIP. IIP applicants had to 'invest' their money for a five year period. Mr Alexander said that he was still consulting on the details of the new scheme but said 'I think it will be more than the kind of duration we've seen up until now'
- The investment will be a genuine investment and not a loan. He said that applicants would have to make a 'larger investment in an at-risk project focused on the start-up side of the venture capital spectrum'
- Language and residency requirements would 'probably not [be] terribly stringent'. Mr Alexander said that the ability to speak English or French was a useful tool for immigrants in Canada but said 'we respect the fact that not everyone starts from the same point of departure and we give a lot of English second-language support to those who don't have a very high level when they arrive'
- The initial pilot scheme will require applicants to invest in a venture capital fund which will be managed by Canadian venture capitalists.
- Investors will not initially have any choice about what schemes their investment is invested in. Mr Alexander said 'Under the pilot, [the money invested] will go into a single fund, so they won't have choice. But in subsequent offerings of the pilot and when we turn it into a programme, we will certainly listen to the advice and the feedback from all of these immigrants.
Similarities to Australian schemeSanwar Ali of workpermit.com said 'Let's hope that the new scheme is not so expensive that it puts off international investors. From what Mr Alexander says, the new program seems to have some similarities to the Australian Significant Investor visa.
'This allows foreign investors who invest AUS$5m to apply for a four year temporary residence visa. Providing they comply with the residence requirements and maintain their investment, they can then apply for permanent residence'.
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