November 15, 2019

Part 1: The Owner/Operator Labour Market Impact Assessment (LMIA) allows immigration applicants much influence in their own qualifying criteria

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The Owner/Operator Labour Market Impact Assessment (LMIA) is a rare Canadian immigration program that awards tremendous power to immigration candidates themselves to set the terms of qualification for their own entry into Canada. The program permits immigration to any destination in Canada, and allows the candidate the privilege of choosing whether they intend to apply as a permanent resident, temporary work permit holder, or both. There is neither any regulatory requirement for minimum capital investment, nor job market advertising or recruiting.

Administered exclusively for entrepreneur/investor immigrants, the Owner/Operator LMIA is unique from other federal or provincial nominee entrepreneur programs as permits the investor candidate to leverage retrospective and existing commercial connections in Canada for consideration for residence status.

The Owner/Operator LMIA also allows planning flexibility for an investor candidate who is interested in investing in Canada, but at the time of investment, may still be undecided about a desire to immigrate. The Owner/Operator LMIA allows immigration options to remain open. Over the course of time, managing their Canadian investments, if the investor’s plans change and they see new benefits in immigration, they may opt to do so at a later date.

This is in contrast to all other provincial nominee and federal entrepreneur programs (such as the Start-up Visa), which in addition to having comparatively higher regulatory and administrative demands in qualifying criteria, are also primarily prospective in these criteria. A candidate’s previous investments in Canada are not factored, and only their future entrepreneurial plans will be considered.

In these cases the candidate is required to submit a proposal for a project they intend to start-up or purchase, detail their plans for its genesis and development, and outline how the operation will earn revenue and profit. The official reviewing the proposal will determine the projects potential commercial feasibility.

Furthermore, the project and the candidate are often restricted by exacting pre-set criteria for minimum capital investment (usually several hundred thousand dollars), minimum personnel engagement, minimum personal net worth, and minimum years of professional experience. In the cases of provincial nominations these strict criteria also have geographic and sometimes targeted industry limitations. Furthermore, once in Canada on a temporary basis, the candidate is usually required to meet project development benchmarks over a pre-set period (usually 12 months) before they and their family are permitted to apply for permanent residence.

In all of these cases the candidate is expected to make their investment after they are approved to work and live in Canada or in conjunction with the submission of the application. Previously made investments in Canada do not qualify, unless the applicant is planning to purchase a greater share going forward. If the candidate and their plans are not accepted by the official, he/she may no longer be interested in the investment, or he may proceed but not expect it to support his immigration.

By allowing a candidate to use pre-existing commercial investments in Canada, the Owner/Operator LMIA cuts out the need for most of these regulatory requirements, as it is understood that an existing commercial enterprise, that is already earning income and is already employing professionals, has already retrospectively demonstrated its economic feasibility. This program was, therefore, created to ease the application process for candidates with this profile.

While there are indeed a few prospective requirements that a candidate must demonstrate to be accepted under the Owner/Operator LMIA program (discussed below), it is certainly advised that a candidate already be invested in a business enterprise in Canada that is already in full operation by the time he selects this program for application. As there are no minimum prior investment ownership criteria, it is possible for a candidate to apply in the case of a prospective start-up; however, the candidate is advised to have already made preliminary investments in facility improvements and equipment purchases, and be able to demonstrate early operational activity before seeking application to demonstrate that the prospective assessment criteria is not necessary.

To start the process, a candidate must first procure the program’s namesake Labour Market Impact Assessment (LMIA) document. To be clear, this not an immigration document, it is an immigration supporting document issued by the department of Employment and Social Development Canada (ESDC)/Service Canada, granting permission to a Canadian enterprise to offer employment to foreign nationals so they may qualify for a permit or visa. There are various types of LMIAs, most of which are issued for the purpose of hiring foreign skilled professionals on a contract basis.

The power of the Owner/Operator LMIA is that it authorizes the candidate to use the enterprise they already own in Canada to make an offer of employment to themselves. This offer of employment, if approved by ESDC with a positive LMIA, will allow them to apply for a work permit and/or permanent residence status with the Ministry of Immigration, Refugees and Citizenship Canada.

ESDC’s Owner/Operator LMIA assessment criteria are straight forward:

A. The candidate must have controlling interest in the enterprise, either with a sole or majority (50%+) ownership stake;

B. The candidate must intend to invest in growth and development of the enterprise, and intend to manage as owner/operator permanently and on a full-time basis to see the development through. Elaborating on this, a business development plan is expected by ESDC for review that demonstrates:

  • The candidate’s transferable managerial and leadership experience, and the necessity for his direct management in the operation;
  • That the candidate has sufficient language ability in either English or French to be able to actively work as a manager in the enterprise;
  • How the candidate intends to fund the development plans and create or maintain employment opportunities;
  • A rudimentary financial plan and timeline of events;
  • That while there is no minimum investment amount, the development plan is solid and that the financing being made makes sense;

C. The candidate must also commit to and demonstrate how they will employ at least one more Canadian or permanent resident in the enterprise within their first year in Canada.

This criteria is relatively very simple; there are no minimum advertising requirements demonstrating the enterprise’s attempts to first hire a local resident (a requirement in most LMIA applications), no minimum personal net worth requirements, no minimum capital investment amount, no requirement to purchase a greater equity state and no minimum number of years of work experience from the applicant. There is no language test required at this stage either; language ability can be demonstrated by other means.

While the candidate must intend to hire a new employee within a year, this is confirmed at the application stage only; there are no post-acceptance operational bench marks in the enterprise that must be met as qualifiers for further immigration status.

Furthermore, the investor candidate can individually select how much they wish to invest, in whichever industry they prefer in any part of Canada. Potential candidates are cautioned though, that the business development plan and its financing must be agreeable to ESDC and IRCC officers concerned with economic growth and employee retention. Irritatingly depressed investment sums, and efforts to game the process will undoubtedly be rejected.

With the LMIA in hand, the investor candidate has a number of immigration options pursuant to their intended plans in Canada. If their intention is to reside for an extended but temporary period, the LMIA will qualify the candidate for a work permit. Work permits issued in this program by IRCC can be issued for up two years, and will allow the candidate to bring immediate family to Canada under temporary residence status for the same duration.

The LMIA will also in most cases qualify the candidate for Canadian permanent residence through Express Entry under the Skilled Worker Program, or after one year of work and residence in Canada under the Canadian Experience Class.

In the Express Entry selection pool the LMIA grants a candidate an additional 200 Comprehensive Ranking System (CRS) points for senior managerial positions (NOC 00). This means that Owner/Operator LMIAs issued in cases of senior management positions will generate a higher chance for candidates to permanently immigrate to Canada. A candidate pursuing permanent residence, may simultaneously procure a work permit so that them and their family may already start residing in Canada, while their Express Entry profile anticipates invitation in the selection pool, or their application is assessed.

Please contact Cambridge LLP for any inquiries about this program, LMIA business plan services, and for reference to our business development partners for connection with investments in existing commercial enterprises or locations/leases for start-ups.

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