How to Buy and Operate a Business in Canada

Back in 2014, the federal government of Canada made the decision to eliminate the immigrant investor and entrepreneur programs and although the programs were known to have their flaws –  it left many ethical and qualified business immigrants with limited options towards purchasing and operating a business in Canada. Fortunately, the temporary foreign worker program does allow a promising route where a business immigrant can come to Canada. This path is known as the Owner Operator labour market impact assessment (LMIA). If this is your first time hearing the term “LMIA” it is (in very simple terms) a document that an employer in Canada may need to get before hiring a foreign worker. Once an LMIA is approved, immigrants are entitled to apply for a work permit. The owner operator LMIA is one of the impactful avenues to take for entrepreneurial and business immigrants to meet the Express Entry requirements and earn an additional 200 CRS points. 

In this article, we have outlined some key aspects when starting an owner operator LMIA – including what an officer will be assessing when it comes to a successful application, ownership rights and documentation. These guidelines are by no means exhaustive and do not replace the ESDC instructions and document checklist.

What is an owner operator?

An owner operator is considered to be the immigrant (aka. applicant) that has a controlling interest in a Canadian business AND can demonstrate intent to run the everyday operations of the business and be actively involvedin the business in Canada. This is by no means a passive investment. If there are multiple owners of a Canadian business, it is only the largest shareholder who can be designated as owner.

Owning a business? How much?

To qualify for an owner operator LMIA the applicant must indicate they have a level of controlling interest (at least 50.1%) in the business and are not able to get dismissed from the position (ie. fired). Having ownership of a business will not guarantee an approved LMIA as this is merely one aspect of the application process.

Assessing labour market factors in Canada

It is of the utmost importance that an application can prove the applicant’s necessity in Canada and what impact they will have on the Canadian labour market. To be specific, an officer will evaluate whether the applicant’s temporary entry will

  • Result in the direct job creation or retention of jobs for Canadians and permanent residents
  • Result in the development or transfer of skills and knowledge for the benefit of Canadian citizens or permanent residents
  • Result in the business having a positive, or at least neutral effect on the Canadian labour market

Genuineness of the job offer 

The legitimacy of the job offer still applies to owner-operators of a business. An assessing officer can determine this by evaluating that the applicant intends to be actively engaged in the business and that they can properly fulfil the duties. It must be made absolutely concise what position the owner operator will have in the business and the role and duties of this position. Documentation such as a business plan, proof of controlling interest and prior work experience are some examples to justify the job offer is genuine.

Can you provide a “pending” purchase of an existing business?

When the current owner intends to sell their business to the immigrant investor and the complete purchase is contingent on the approval of the LMIA and work permit, it is still a possible albeit questionable option. Contingent agreements come with a glaring inconclusiveness and may be enough reason for an officer to refuse due to lack of legitimate ownership at the time of application.

It is probably wise to avoid a contingent purchase. 

What documents are important to include with an application?

While it may not be transparent what documents to include for an owner operator LMIA, we’ve suggested some key documents to include with your application package, if applicable:

  • Proof of ownership of the business (share purchasing agreement, share certificate, a notice of articles)
  • Applicant Resume
  • Financial statements supporting business legitimacy such as (NOA, Schedules 100/125, PD7A, T4’s, letter of good standing)
  • Business License
  • Copy of Lease agreement
  • Employer contract
  • Business plan and financial forecast

If you have any further questions about Immigrating to Canada, please get in touch, call +1 (604) 265-4966 or email.