Comparing Canada’s Business Investment Program with the EB-5 Immigrant Investor Program of the United States

by Jovi Federici, Legal Intern

Canada’s Business Immigration Program (BIP), similar to the EB-5 Investment Immigrant Program in the United States, facilitates immigration to Canada based on business investment. There are, however, some very important differences between Canada’s BIP and the EB-5 program in the United States, which should be explored in order to fully understand the program.

The purpose of the BIP is to promote economic development and employment in Canada, with a specific interest in encouraging international trade. The BIP includes three classes of immigrants who seek permanent residence in Canada: Investor, Entrepreneur, and Self-Employed. Immigrant investors engage in a passive investment, and the program is split between a Federal program and a Quebec program. Immigrants who express a desire to live in Quebec should follow the Quebec program, which is similar to the Federal program except that it is only for applicants seeking to reside in Quebec and Quebec guarantees the investment instead of the Federal government. Also the investment proceeds are allocated to Quebec only. Generally s peaking, processing time for the Quebec program tends to be less than the Federal program, although this is not always the case.

Through the BIP program, federal investors provide $800,000 CAD to the Receiver General of Canada. The money is held for investment purposes for five (5) years and it does not accrue interest during this time. The Federal government guarantees the investment and invests the money in various public projects. The application to this program must demonstrate a personal net worth of $1.6 Million CAD as well as have two years of business experience. The investment must lead to five or more full-time employees or meet certain requirements concerning the size of the business. The Federal immigrant investor may live anywhere in Canada except Quebec, for the reasons described earlier.

Under the BIP in Canada, an immigrant investor may finance the investment through a bank loan, and this process usually requires a down payment of $180,000 CAD. The bank then loans the remaining $580,000 and the applicant delivers the $800,000 to the Receiver General. The government guarantees the loaned portion of the investment, but not the down payment.

Although the Canada’s BIP and the United States EB-5 programs exist for the same purpose, which is to promote economic growth and employment, they differ substantially in their implementation. First, the BIP investment program requires that the individual turn over investment capital to the Canadian government. During the investment period the individual does not receive returns on their capital investment. Proceeds are allocated to the Canadian province in which the investment is made, and the BIP is a public investment project that, from the standpoint of the investor, is more like a zero interest bearing loan. In contrast, the EB-5 program allows the investor to choose where and how to invest their capital. As long as the investment can be characterized as an investment as opposed to a loan—it carries some risk, and meets certain minimum requirements for job creation—the EB-5 investor is free to invest in any private venture.

Second, the BIP requires specific proof of experience in business or management experience for two of the five years prior to applying for the permanent resident visa. The EB-5 program, on the other hand, creates no specific requirements as to the capital investor’s previous experience or qualifications to invest in the United States. The BIP is a passive investment program so the applicant will not be applying previous experience towards managing the BIP investment. The Canadian government most likely imposes the previous experience requirement to ensure that permanent visas are only being issued to applicants who will continue to provide business or management investment in Canada after the 5 year BIP investment period.

Finally, the greatest difference between the BIP and EB-5 programs is that a BIP investment can be financed with a bank loan. The EB-5 program explicitly forbids financing an investment by loan and also imposes certain requirements regarding the proof of the source of investment capital. This major difference means that an immigrant investor can obtain permanent residence in Canada for as little as $180,000 CAD. In contrast, the EB-5 Immigrant Investment Regional Center Program requires a minimum of $500,000 US. At rates applicable at the time of this writing, that equates to $478,200 CAD.

Apart from the lower investment requirement, there may be other advantages with immigration to Canada as opposed to the United States. Health care, for example, is less expensive and easier to obtain in Canada than in the United States. Canadian citizens may travel to the United States without a passport. Under the North American Free Trade Agreement (NAFTA) Canadians may work in the United States for up to one year at a time. All of these things should also be considered in this comparison.

On the other hand, the Canadian BIP is a passive investment that ties up capital for five 5 years offering no returns. For the business savvy capital investor, the U.S. EB-5 program offers participation in one’s investment and the opportunity to grow a capital investment in the free capital market and may be the better choice. A consultation with an attorney who specializes in immigration law affords the immigrant investor the opportunity to explore and compare the benefits of both programs and to tailor an immigration-investment strategy the best suits a particular applicant’s needs.

For more information or to schedule a free consultation please contact <a href=”; title=”Misiti Global”>Misiti Global</a>, PLLC by <a href=”; title=”Nicklaus Misiti”>Nicklaus Misiti</a> at (212)537-4407 or by filling out the convenient form on our website


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