Can you still start a business in Quebec when you are a foreigner?
With the closing of two of the programs for business people until March 2018, foreign entrepreneurs wishing to start a business in Quebec or buy a business are wondering if they have other options.
The “Businessmen” Programs
It should be noted that Quebec usually offers three programs for business people, as it designates them, intending to settle in the province:
– The Entrepreneurs category (closed)
– The Self-Employed category (closed)
– The Investor category
The financial and experience-related criteria for the above programs are summarized in the table below:
| Main Criteria | Entrepreneurs | Self-Employed | Investor |
| Net income lawfully obtained, alone or with accompanying spouse or common-law partner | $300 000 CAD | $100 000 CAD | $1 600 000 CAD
In addition, the signing of an investment agreement of $ 800,000 CAD, with a financial intermediary authorized to participate in the Investor Program. |
| Experience required | Experience in operating a business for at least two years acquired within the five years prior to the date of application in a profitable and lawful business (agricultural, industrial or commercial) Alone or with the accompanying spouse or common-law partner, at least 25% of the shareholders’ equity. | Work experience of at least two years in the profession or trade to be practiced in Québec | Experience in management in a licensed agricultural, commercial or industrial enterprise; a licensed professional enterprise whose staff, excluding the candidate, holds at least the equivalent of two full-time positions; an international organization or a government, including any of its departments or agencies. |
Each of these programs leads to permanent residence. However, these options have a couple drawbacks: processing times extend out over several years and are open, favouring francophone applicants, exclusively by quotas.
In Quebec, offers are therefore rare to obtain permanent residence in the Business category.
This is all the more the case since the Quebec Ministry of Immigration, Diversity and Inclusion announced that the Entrepreneurs and Self-Employed category will remain closed until March of 2018 and that a reform of these programs is in progress.
One important point: under the Canada-Quebec Accord, the province of Quebec operates its own program for entrepreneurs. In other words, foreign nationals wishing to operate a company in Quebec will not be eligible for federal programs such as the Business Start-Up Visa.
Working in Quebec
In this context, is there is no hope of operating a business before 2020 in Quebec? Of course, there is; provided you turn to the options available with regards to temporary residence.
What are the options?
With the exception of those with an open work permit and cases where intra-group transfers are possible, most foreign nationals wishing to enter Québec will have to apply for a work permit as an entrepreneur.
As with a conventional work permit, it is generally necessary to obtain a prior Labor Market Impact Assessment (“LMIA”) under the owner-operator category and then apply for a work permit once a positive or neutral LMIA has been issued.
The main criteria of the owner-operator LMIA, without a job posting, have recently been clarified and are now established as follows:
– Demonstrate that the foreign worker holds a controlling interest in the company;
– Demonstrate that this temporary entry will result in the creation or maintenance of employment opportunities for Canadians and permanent residents or the transfer of skills to these same Canadians and permanent residents;
– Not be in a position where they could be laid-off.
The entrepreneur, who is the majority stakeholder within their company, may be exempted from the LMIA process if they can meet the requirements of a C11 exemption; demonstrating in particular:
– The profits and economic benefits generated by the company will remain Canada,
– The planned work period must be truly temporary,
– The applicant must demonstrate that the business will bring a significant social, economic or cultural benefit to Canada,
– The service must be unique in that it does not compete directly with companies that are already well established in Canada.
A work permit under this exemption may be issued for a maximum of two years and may only be extended upon presentation of proof of selection as an entrepreneur by a province.
Caution
A work permit application as an entrepreneur must be rigorously prepared. In particular, a foreign national must be prepared to provide any evidence to demonstrate the prospect of economic success of the project (i.e. a business plan established by an accountant), past experience as an entrepreneur and what makes them an exceptional candidate.
As the owner of the business they want to operate, the foreign national will not be eligible for the Québec Experience Program (QEP) to apply for the Quebec Selection Certificate. If they intend to remain in Canada upon the expiry of their status, the entrepreneur will be smart to start the process of applying for permanent residence, if they are eligible, within the first few months of receiving their work permit.
The eligibility of the candidate to be selected by a province is easily measurable in advance, even in advance of any project. Think about it!
Marc-André RANGER, Head Paralegal and Partner