Newfoundland Immigration Investor Category

The Immigrant Partner category is intended for prospective immigrants with business and/or entrepreneurial skills and expertise who wish to partner, in a limited manner, with other prospective immigrants (to a maximum of 3 additional immigrant partners) in establishing a new business to be located in Newfoundland and Labrador OR invest in an expanding existing Newfoundland and Labrador company. In both situations the immigrant partner must take an active role in the new or investee company. Active role is defined as the participation in the day to day operations and decision making activities of a company as a director or senior manager of the company with a "meaningful managerial role". A "meaningful managerial role" would require direct involvement in major decision making of the company, hiring and firing of staff, financing decisions, meeting major customers, authorization to sign cheques, and other related activities.

Whereas under the Immigrant Entrepreneur category the immigrant is engaged on a self-employed basis in the business, the active role played by immigrants under the Immigrant Partner category may be either as director of the company, with the attendant financial, legal and decision-making responsibilities, or as a senior manager of the company, as defined at level "O" of the National Occupational Code Classification. For further information see National Occupational Classification 2001 - Occupational Descriptions.

Applicants who wish to submit an application in this category must meet the following criteria:

Net Worth and Liquidity Requirements

Immigrant partners must have a minimum net worth of CAD$750,000, including minimum liquid assets of CAD$350,000. include, cash, demand deposits with a financial institution, term deposits, tax shelters convertible to cash, and readily marketable investments including publicly traded stocks and bonds.

Investment Equity Requirement

Immigrant partners must be prepared to make a minimum business investment of CAD$200,000 in equity to establish an eligible new enterprise or purchase/invest in an eligible existing business within the northeast Avalon region (the greater St. John's area) or CAD$100,000 in equity outside the northeast Avalon region.

Good Faith Performance Deposit

In applying to immigrate to Canada under the Newfoundland and Labrador Provincial Nominee Program, the applicant must certify his/her intention of settling and establishing or purchasing/investing in a business in Newfoundland and Labrador. To guarantee this intention, the applicant is required to place CAD$25,000 in trust with the Government of Newfoundland and Labrador. This deposit is fully refundable, with interest, one year after landing, provided that the immigrant partner can demonstrate to the satisfaction of the province that:

1. the required minimum investment was made;

2. the applicant is actively involved in the investee company; and,

3. the immigrant partner and his/her family maintain a residence in Newfoundland and Labrador.

Evidence that the minimum investment has been made would require the immigrant partner to submit a copy of a shareholder's agreement. Evidence that the immigrant partner is active in the investee company as a director or senior management employee will take the form of a declaration to this effect by the Chair of the Board of Directors and the CEO, on behalf of the investee company and the immigrant partner. Evidence that a residence is maintained in the province may include a pre-arranged visit to the residence, copies of household bills, property tax receipts, and registration of children at local schools and day cares.
  
Where the immigrant partner is unable to establish that the criteria set out above in (1), (2), and (3) have been met to the satisfaction of the province, the deposit of CAD$25,000 will be forfeited. The province must receive the performance deposit upon application or, in any case, prior to the issuance of the Nomination Certificate. If an immigrant partner is not successful in obtaining permanent residence status, the performance deposit will be refunded, without interest.
  

Exploratory Visit

Immigrant partners are required to make an initial exploratory visit to Newfoundland and Labrador. Following a pre-assessment of the immigrant application, the province will issue an invitation for the exploratory visit (at the immigrant partner's own expense). During this time, the immigrant partner will meet with a Program Officer for an official interview. The interview process will assist the Program Officer with the assessment of the nomination application.

During this visit the immigrant partner is encouraged to meet with the principals of the companies in which he/she proposes to invest and take an active management role. These appointments are to be made directly by the immigrant partner with the investee company. During this visit the immigrant partner is also encouraged to meet with relevant industry associations and cultural or community groups to assess adaptability and successful settlement prospects in Newfoundland and Labrador.
 
During the exploratory visit, the prospective immigrant partner will be informed that if successful in obtaining a nomination/visa, they will be expected to land in Newfoundland and Labrador and to meet with department officials within fourteen days of landing. Once the visa has been issued, department officials will contact the immigrant partner requesting details of the travel arrangements to Newfoundland in order to select a date for the post landing meeting (photocopies of travel documents will be requested e.g.: airline tickets, hotels, etc.). The Department of Innovation, Trade & Rural Development may waive the requirement for an exploratory visit in extenuating circumstances where the visit is not feasible, provided the objectives established for permanent residency in Newfoundland and Labrador are not compromised.

Eligible Investees

A company proposing to receive an investment from an immigrant partner under the Newfoundland and Labrador Nominee Program will provide a written opinion from independent legal counsel or an independent accountant certifying the investee company meets the following eligibility criteria:

1. the company must be a for-profit corporation incorporated under the Corporations Act of Newfoundland and Labrador or the Canada Business Corporations Act;

2. the company's authorized capital structure permits the issuance of shares to an immigrant business partner(s);

3. the investee company maintains a "permanent establishment" in Newfoundland and Labrador as defined under the Income Tax Act by regulation 400 (2); and,

4. the  is liable to pay income tax on taxable income earned as a result of a "permanent establishment" in the Province, irrespective of income or other taxes which may also be payable in other jurisdictions as a result of income earned or other business activity.

Immigrant partners who want to establish a new company must also abide by the respective Corporations Acts and meet the definition of "permanent establishment" as defined by the Income Tax Act. For more information see the Canada Revenue Agency website.

Priority will be given to immigrant partners who wish to invest in a business that is listed on the strategic sector list. Sectors that are ineligible include: retail and wholesale operations; financial services; business and personal services; most professional practices; and, real estate and construction businesses. The establishment of a new business must take into consideration any possible adverse impact on local established businesses. Where there is a concern over eligibility, the immigrant partner is encouraged to contact the Department of Innovation, Trade and Rural Development to discuss their concerns.

Investment Prospectus/Executive Summary Business Plan

Immigrant partners who wish to establish a new business in the province of Newfoundland and Labrador are required to prepare and submit a business plan outlining how the new enterprise is to be successfully established, including ownership structure, overview of the management team, financial plan and marketing plan. The business plan will allow the Province to assess the feasibility of the new business and the impact of the business operations on the local economy.

Similar information will be required in instances where immigrant partners intend to become involved in the acquisition/expansion of an existing investee company. The business plan will be provided in a general format as specified by the province. It must also demonstrate that as a result of establishing or investing in the business there will be:

• capital investment in a new or existing business;

• direct job creation in the province, in addition to jobs to be performed in the proposed business by family members;

• a positive impact on the provincial economy; and,

• improved market access for the province's good and services.

A full disclosure of the applicant's business assets, debts and financial affairs will be required in considering Nominee applications. A letter of recommendation from the applicant's banking institution will assist in the review of the business proposal. The business plan will be assessed by the Department of Innovation, Trade and Rural Development in consultation with other government departments and agencies, as required and appropriate. The Department also reserves the right to meet with a representative of the investee company in order to determine a full understanding by the investee of the role of the Provincial Nominee Program and the various levels of government as they relate to the investment in question.

Local Company Requirements

Eligible Newfoundland and Labrador companies interested in attracting immigrant partners are required to make available to the partner(s) an executive summary business plan or prospectus prior to the partner(s) investing in the investee company. The summary must include relevant information necessary for the partner(s) to use due diligence in the selection of an investment, including the following elements:

1. a written opinion from the investee company's independent legal counsel or independent accountant that the investee company is eligible to receive immigrant partners under the Newfoundland and Labrador Provincial Nominee Program;

2. ownership structure, including affiliated companies and subsidiaries;

3. business strategy;

4. overview of products/services and markets;

5. overview of the operations;

6. financial statements for the investee company's most recent two year period, drafted under Canadian GAAP under a review engagement or audit by an independent auditor. Newly incorporated companies, including joint ventures, will provide pro forma financial statements to support assumptions made in the business plan;

7. two years projected financial statements drafted under Canadian GAAP.

Investment Selection and Due Dilligence

Immigrant partners will invest either CAD$200,000 within the northeast Avalon area (greater St. John's area) or $100,000 (outside the northeast Avalon region) via common shares in an eligible Newfoundland and Labrador company and will take an active role in the investee company as either a director or as a senior management employee at level "O" under the National Occupational Code. For more information see National Occupational Classification 2001 - Occupational Descriptions.
  
The immigrant partner must select the investee company in which he/she intends to invest and may not appoint an agent, representative or other third party for this purpose. Immigrant partners are encouraged to retain legal and financial counsel in Newfoundland and Labrador to act on their behalf in overseeing the investment transaction. It is a conflict of interest for legal and financial counsel acting as an investment intermediary, or acting on behalf of the investee company, to also provide legal services to prospective partners.
  
Important: Immigrant partners are strongly encouraged to exercise due diligence prior to subscribing for shares or investing in an eligible Newfoundland and Labrador company because neither the Government of Canada nor the Government of Newfoundland and Labrador guarantees or warrants that the immigrant partners will eventually receive a return of their investment.
  
The immigrant partners must be aware that funds intended for investment in a local business venture may not be held in trust pending Citizenship & Immigration Canada granting permanent resident status to the immigrant partner. Where for one reason or another, permanent residence is not achieved, another immigrant partner may be recruited in substitution. This process of substitution ensures that the original immigrant partner is reimbursed for any money he or she had committed to the investee company.