Investor - CCFTA – [R204(a) – F21] Agreement or arrangement - International Mobility Program

In these instructions “officers” refers to employees of both Immigration, Refugees and Citizenship Canada and the Canada Border Services Agency.

The instructions on this page should be reviewed in conjunction with:

• Employer-specific work permits – General processing – International Mobility Program
• Assessing the genuineness of the offer of employment on a work permit application
• Conditions and validity period on work permits
• Public list of Employers who have been non-compliant

The investor category in Annex K-03.II of the Canada-Chile Free Trade Agreement (CCFTA) facilitates entry to Canada for Chilean citizens who intend to engage in international business activities in Canada, and as such any work permit are applications assessed as per paragraph 204(a) of the Immigration and Refugee Protection Regulations (IRPR). This regulatory sections falls under the International Mobility Program.

On this page

• Eligibility
• Documentary evidence
• Place of application
• Application assessment
• Final decision
• Length of stay

Eligibility

To be eligible as an investor under the CCFTA, the following must apply:

• be a citizen of Chile;
• have made, or is actively making a substantial investment in Canada;
• an offer of employment submitted through the Employer Portal or through alternate means if authorized
  • from an enterprise in Canada that has Chilean nationality;
  • where the duties are solely to develop and direct the enterprise;
  • where the position is executive or supervisory or involves essential skills
• satisfy an officer that they meet the requirements for temporary entry.

To be eligible as an employee of an investor under CCFTA, the following must apply:

• be a citizen of Chile;
• work in a supervisory or executive capacity or possesses skills essential to the firm’s operations in Canada;
• satisfy an officer that they meet the requirements for temporary entry.

Documentary evidence

A foreign national must provide sufficient documentary evidence to satisfy an officer that they are eligible for entry.

To prove eligibility, a foreign national must provide:

• proof of Chilean citizenship;
• documentation that shows the nationality of the enterprise established in Canada;
  • Chilean nationality means that the individual or corporate persons who own at least 50 percent interest (directly or by stock) in the entity established in Canada must hold Chilean citizenship.
  • joint ventures and partnerships are limited to two parties.
• proof of the substantial investment in the enterprise in Canada;
• evidence that the investment is a real and active commercial or entrepreneurial undertaking that operates to produce a service or commodity for profit;
  • For example, an applicant may provide a plan for future investment, expansion, or development of a business
• proof that the funds or other capital assets put towards the investment were acquired by legitimate means;
• a letter of introduction from the employer that specifies
  • the position in Canada, title, place in the organization, job description, and whether the applicant will occupy a role as a supervisor, executive or employee with essential skills
  • in the case of an employee with essential skills, evidence that the person has such skills and that the position in Canada requires such knowledge
  • the intended duration of stay
  • a description of the financial arrangement that was or will be used for the investment
• an offer of employment submitted through the Employer Portal or through alternate means if authorized
  • the offer of employment provides confirmation of the pre-arranged employment
  • the proposed employer in Canada;
  • the profession for which entry is sought; and
  • details of the position (title, duties, duration of employment, arrangements as to payment.)

Place of application

Foreign nationals who are exempt from the requirement for a temporary resident visa may apply for a work permit at the port of entry, as well as foreign nationals who otherwise meet the requirements of R198. However, due to the complexity of the application and for reasons of client service, program consistency and reciprocity, the initial application for a work permit as an investor should be submitted outside of Canada. For more information, see: Temporary Foreign Worker Program (TFWP) and International Mobility Program (IMP): Persons who may apply at a port of entry

Foreign nationals may apply for a work permit from within Canada if they meet the requirements of section R199.

Extension applications: Upon receiving a request for extension, officers should compare the information provided in the initial or previous work permit application with that presented in support of the extension request.

An applicant’s expression of a definite intention to return to their country of origin when investor status terminates will normally be accepted as sufficient evidence of temporary intent, unless there are indications to the contrary.

Authorized work as an investor would end upon the applicant taking another job, engaging in an activity which is not consistent with this status, closing down the business, etc.

Application assessment

Review of the offer of employment

When assessing if the work permit application meets the requirements of the CCFTA, officers should review the offer of employment that appears under the Employment Details tab in the Global Case Management System (GCMS) for information provided by the employer (who could be the applicant) or the matching fields on the IMM 5802 form (if the employer was authorized to use it).

Refer to Employer-specific work permits – General processing – International Mobility Program for further guidance.

Nationality of the enterprise

The place of incorporation of an enterprise is not an indicator of nationality; nationality is indicated by ownership.

Chilean nationality means that the individual or corporate persons who own at least 50 percent interest in the entity (directly or by stock) must be a citizen of Chile.

If the prospective employer is a corporation or other business organization, the majority ownership must be held by citizens of Chile who either:

• reside in Chile; or
• are maintaining valid temporary resident status in Canada with authorization to work as an investor.

To establish nationality, an officer may consider the following:

• A letter attesting to ownership from a corporate secretary or a company lawyer may be used in determining nationality;
• An entity’s shares are sold exclusively on a stock exchange of the country of incorporation, nationality can be presumed to the same; and/or
• A multinational entity whose shares are exchanged in more than one country will require the applicant to submit evidence that the entity meets the nationality requirement.

The following enterprise nationality situations are not eligible:

• A citizen of Chile who is a permanent resident of Canada does not qualify as an enterprise of Chilean nationality.
• Majority ownership of shares of a corporation or other business organization by a citizen of Chile who is also a permanent resident of Canada does not qualify the enterprise as a Chilean nationality.

Assessing capacity

The applicant must be seeking temporary entry solely to develop and direct the operations of an enterprise in which the applicant has invested, or is actively in the process of investing.

The officer should confirm that the applicant:

• is a citizen of Chile;
• has a controlling interest in the enterprise in order to ensure that they have the requisite control to develop and direct the enterprise;
  • An interest of 50 per cent or less usually will mean that the applicant does not have requisite control, particularly in smaller enterprises.
  • An equal share of the investment, such as an equal partnership, generally does not give controlling investment in Canadian-based corporations.
• qualifies in a supervisory or executive capacity (TEER category 0 or 1) or possesses skills essential to the firm’s operations in Canada.

Supervisory or executive capacity

The supervisory or executive element of the position must be a primary function of the duties while working in Canada. The supervisor is primarily responsible for directing, controlling and guiding subordinate employees and does not routinely engage in hands-on activities (a first line supervisor would not generally meet these requirements). An executive is in a position in the organization with significant policy authority.

Indicators of supervisory or executive or managerial capacity are:

• position title;
• place in the organizational structure;
• job duties;
• degree of ultimate control and responsibility over operations;
• number and skill levels of immediately subordinate employees over whom supervision is exercised;
• level of pay; and
• qualifying executive or supervisory experience.

The size of the Canadian office will dictate which indicators are more relevant.

Essential skills

Essential skills or services are special qualifications that are vital to the effectiveness of the firm’s Canadian operations over and above qualifications required of an ordinary skilled worker.

An employee with essential skills is not required to have previously worked for the enterprise unless the skills required could only be acquired by working for the enterprise.

Officers must be satisfied, based on the following factors, that the applicant possess the essential skills:

• the degree of proven expertise of the applicant in the area of specialization;
• the uniqueness of the special skills;
• the length of experience and training with the firm;
• the period of training required to perform the contemplated duties; and
• the salary that the special expertise can command.
  • The salary of an applicant with essential skills should be significantly higher than that of a skilled labourer in the relevant occupation.

New enterprises

A work permit as an investor may be granted to an employee who works in a supervisory or executive capacity or who possesses an essential skill(s) that is needed for the start-up of a new enterprise.

This provision usually applies where a firm established in Chile seeks to use a skilled Chilean employee in the early stages of a Canadian investment. This assists new enterprises to establish themselves and to allow them a reasonable period of time to train a Canadian for a position not requiring essential skills.

The employee and the enterprise will have to demonstrate need, based upon familiarity with the Chilean operations of the enterprise.

A highly trained or specially qualified technician employed by a firm to train or supervise personnel employed in manufacturing, maintenance and repair functions may be granted a work permit as an investor even though some manual duties may be performed.

Substantial investment

The foreign national has invested, or is actively in the process of investing, a substantial amount of capital in an enterprise in Canada. The enterprise must be a real and active commercial or entrepreneurial undertaking which operates to produce some service or commodity for profit. It cannot be a paper organization or an idle, speculative investment held for potential appreciation in value.

The foreign national must demonstrate that the investment, even if substantial, will return more income than that which only provides a living for the foreign national and family.

For instance, a foreign national may show that the investment will expand job opportunities locally or that it is adequate to ensure that the foreign national’s primary function will not be that of a skilled or unskilled labourer. If the foreign national has substantial income from other sources and does not rely on the investment enterprise to provide a living, the investment may be one of risk and not one of providing a mere livelihood. Therefore, the investment would not be in the marginal category.

A plan for future investment, expansion, or development is significant in meeting this criterion

• If the foreign national is in the process of investing, intent to invest or prospective investment arrangements with no present commitment will not suffice. The foreign national must be close to the start of actual business operations. The investment funds must be irrevocably committed to the business.
• The foreign national must demonstrate prior or present possession and control of the funds or other capital assets.
• There is no minimum dollar figure established for meeting the requirement of “substantial” investment. Substantiality is normally determined by using a “proportionality test.”
• Only the amount already invested or irrevocably committed for investment can be considered in determining substantiality.

The investment must be significantly proportional to the total investment. In businesses requiring smaller amounts of total investment, the investor must contribute a very high percentage of the total investment, whereas in businesses of larger total investment, the percentage of the investment may be much less. Officers should assess the nature of the transaction to determine whether a particular financial arrangement may be considered an investment for the purpose of investor status.

• Funds: Mere possession of uncommitted funds in a bank account would not qualify, whereas, a reasonable amount of cash held in what is clearly a business bank account or similar fund used for routine business operations may be counted as investment funds.
• Indebtedness: Mortgage debt or commercial loans secured by the enterprise’s assets cannot count toward the investment. Loans secured by the applicant’s own personal assets, such as a second mortgage on a home, or unsecured loans, such as a loan on the applicant’s personal signature, may be included since the applicant risks the funds in the event of business failure.
• Lease/rent payments: Payments in the form of leases or rents for property or equipment may be calculated toward the investment in an amount limited to the funds devoted to that item in any one month. However, the market value of the leased equipment is not representative of the investment and neither is the annual rental cost (unless it has been paid in advance) as these rents are generally paid from the current earnings of the business.
• Goods/equipment as investment: The amount spent for purchase of equipment and for inventory on hand may be calculated in the investment total. The value of goods or equipment transferred to Canada (such as factory machinery shipped to Canada to start or enlarge a plant) is considered an investment provided the applicant can demonstrate that the goods or machinery will be put to use in an ongoing commercial enterprise.

Final Decision

Approval

The work permit will be issued under the authority of paragraph R204(a).

In GCMS, under the Application screen, officers should enter the information below in the specified fields.

Refusal

If an officer is not satisfied that all the requirements of R200, including the assessment under R204(a), are met, they must record their reasons and outline the rationale underlying the decision as well as the facts and elements considered. They must also provide an explanation for the decision in a case note.

A decision is reasonable and therefore defendable when another person is able to trace the decision maker’s reasoning, without encountering fatal flaws in the overarching logic, and is satisfied that there is a line of analysis within the given reasons that could reasonably lead the tribunal from the evidence before it to the decision maker’s conclusion.

The officer needs to engage with the documentary evidence that was provided by the applicant. Simply stating ‘I have reviewed the submissions and I am not satisfied that R204 is met’ is not sufficient for another reasonable person to understand the logic of the decision without reviewing all of the evidence again.

Refusal reasons should clearly indicate which criteria or what requirement of R200 was not met and explain how the conclusion was reached.

For assistance, officers can follow the steps in Decision making: Standard of review and process for making a reasonable decision .

Refusal grounds in the GCMS

The GCMS has standard text for refusal grounds. Officers should ensure that the refusal grounds selected for the refusal letter match the reasons that they have stated in their case note.

If an officer has reasonable grounds to believe that the applicant is not able to perform the work sought, they should select the paragraph “R200(3)(a) You were not able to demonstrate that you will be able to adequately perform the work you seek.” Officers should ensure that they clearly indicate in their refusal notes why they are not satisfied.

Given that there is no specific refusal ground for FTA categories in GCMS for when a officer is not satisfied that the criteria has been met, they should select the refusal ground “Other” and add a short explanation in the Comments field that they are not satisfied that section R200 or paragraph R204(a) are met.

Length of stay

The initial length of stay can have a maximum duration of 1 year.

Extensions should be granted for a duration of 2 years provided that the requirements outlined above are met. Upon receiving a request for extension, the file from the issuing office should be requested to compare the original information and documentation with that presented in support of the extension request.