PEI Immigration Investor Category

Immigrant Partner Net Worth and Liquidity Criteria

Immigrant partners are required to have a minimum net worth of CAD$400,000 of which CAD$350,000 will be in the form of liquid assets.

Investment Amount and Good Faith Deposit

Immigrant partners must be prepared to make a CAD$200,000 investment by way of preferred shares in an eligible PEI company and to place CAD$25,000 in escrow with the Government of PEI.

Exploratory Visit

Immigrant partners are required to make an exploratory visit to PEI of at least three business days duration. During this time, the immigrant partner will meet with the Program Officer for an interview to assess his/her application for nomination.

It is also strongly encouraged that prior arrangements have been made for the immigrant partner to meet with the principals of companies in which they may invest, preferably at the primary place of business. The necessary appointments are to be made directly by the immigrant partner (or his/her agent) with the investee company, or an investment intermediary acting on behalf of the prospective investee company(ies).

Investment Promotion and Match Making

Eligible PEI companies interested in receiving investment from immigrant partners may solicit investment directly or through an investment intermediary which acts as a match maker between the immigrant partner and the prospective investee. It is important that immigrant partners fully understand that:

1. neither the Government of Canada nor the Government of Prince Edward Island assumes liability for the oral, written or other representations of the prospective investee, or an investment intermediary, which may lead to an immigrant partner subscribing for shares in an investee;

2. neither the Government of Canada nor the Government of PEI guarantees that the immigrant partner will eventually recover his/her investment or earn dividends or other return; and

3. neither the Government of Canada nor the Government of PEI accepts liability for the representations, actions, errors or omissions of investees, investment intermediaries, or others involved in investment promotion, investment match making, due diligence or other activity which may be associated with the immigrant partner making an investment.

Eligible Investees

A company proposing to issue preferred shares to an immigrant partner under the PEI Nominee Program will provide a written opinion from its independent legal counsel or an independent chartered accountant certifying the investee company meets the following eligibility criteria:

1. the company must be a for-profit corporation incorporated under the Companies Act of Prince Edward Island or the Canada Business Corporations Act;

2. the company's authorized capital structure permits the issuance of preferred shares to an immigrant partner (s) in alignment with the provisions of the PEI Nominee Program;

3. the investee's corporate headquarters are located on PEI;

4. the investee maintains a "permanent establishment" on PEI as defined under the Income Tax Act by regulation 400 (2); and

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

In addition, the investee must be engaged in business which is included in the Ministry of Development & Technology's strategic priorities, namely:

1. aerospace and spin-off industry;

2. bio-resources, life sciences and new uses;

3. information and communications technologies;

4. film, television and new media;

5. manufacturing and processing;

6. tourism attractions and tourism fixed roof accommodations, excluding cottage or recreational property development;

7. first-of-kind, market-ready, peer-reviewed exportable technology including proprietary products, processes or other intellectual property.

8. Investment may be permitted in up to ten retail companies, in aggregate, with a limit of one investor per investee. Please consult a Program Officer for further information.

Excluded sectors include:

1. primary resources, such as agriculture, fisheries and forestry, except where the company's primary business activity is predicated upon first-of-kind, peer reviewed, exportable technology;

2. wholesale;

3. financial services;

4. business and personal services;

5. most professional practices;

6. real estate and construction.

Where there is doubt concerning eligibility, prior discussion with the Immigration & Investment division of the PEI Department of Development & Technology is encouraged.

Investment Prospectus/Executive Summary Business Plan

Eligible PEI companies interested in receiving investment from immigrant partners are required to make available to the immigrant partner an executive summary business plan prior to the investor subscribing for shares in the investee. The summary business plan or prospectus must include relevant information necessary for the immigrant partner to use due diligence in the selection of an investment and must include the following elements:

1. a written opinion from the investee company's independent legal counsel or independent chartered accountant that the investee is eligible to receive investment under the PEI Nominee Program;

2. ownership structure, including affiliated companies and subsidiaries;

3. overview of the management team;

4. summary business strategy;

5. products/services and markets;

6. operations;

7. finance including:

   1. financial statements for the investee company's most recent fiscal year end, drafted under generally accepted Canadian accounting principles under a review engagement or audit by an independent chartered accountant; and

   2. two years projected financial statements drafted under generally accepted Canadian accounting principles for the investee company, including a balance sheet, an income statement, statement of changes in financial position, a cash flow forecast, a summary of accounting policies, and significant assumptions underlying the financial projections.

Investment Selection and Due Diligence

Immigrant partners will invest CAD$200,000 via preferred shares in an eligible PEI company and will take an active role in the investee as a director or as a senior management employee at level "O" under the National Occupational Code. See matrix at www23.hrdc-drhc.gc.ca. The immigrant partner must select the investee company in which he/she intends to invest and may not appoint an agent or other third party for this purpose.

It is critical that immigrant partners use due diligence prior to subscribing for shares or investing in an eligible PEI company because neither the Government of Canada nor the Government of Prince Edward Island guarantees or warrants that the immigrant partner will eventually receive the return of the CAD$200,000 capital invested or dividends.