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Business Criteria

The PEI PNP Business Impact Category provides an opportunity for foreign nationals to apply to be nominated by Prince Edward Island to become permanent residents of Canada providing they invest in and actively manage a business in Prince Edward Island.  Under this category, the applicant may start a business, obtain 100% control of an existing Prince Edward Island business or purchase partial ownership, with at least 33 1/3% of the equity (see definitions), of an existing Prince Edward Island business.  The applicant’s choice of a Prince Edward Island business should match their skill set and abilities to run that particular business.

The Business Impact Category has three streams from which an applicant can choose:

 



Prince Edward Island businesses that are seeking a buyer for part of, or all, of their business should consult their professional advisors.  This may include Island agents approved under the PEI PNP, accountants or lawyers. Island agents will be actively seeking investors interested in Prince Edward Island.  Additionally, any immigrant requiring assistance in the immigration process can only be represented by an Island agent.

Eligibility Process and the Use of Island Agents

Applicants to the program will be able to pursue Island businesses directly without immigration representation or they can use the services of an Island agent.  The Island agents will also be available to assist businesses in finding an applicant interested in investing in their business.

Visit the Agents page for a complete list of approved Island Agents of the Prince Edward Island Provincial Nominee Program.

Should an Island business choose to use the services of an Island agent, they should provide the agent with the following:


  • A completed Consent to Pursue Investment Form.
  • Current, year-end comparative financial statements, complete with supporting notes, prepared on a minimum of a "Notice to Reader" basis in accordance with Canadian generally accepted accounting principles by a professional accountant or, if not incorporated, the proprietor’s or partners' personal income tax return(s).

The Island agent will work with applicants interested in the Business Impact Category and present all the Island businesses that match the applicant's skill set and have received an approved Consent to Pursue Investment letter from the Office of Immigration. The applicant will conduct research, consult with professionals, do an exploratory visit to Prince Edward Island and choose a business to invest in or purchase.  At this time, the applicant and the business will need to submit a business plan to the Office of Immigration which includes the following:
  • Company overview,
  • Products/services offered, industry analysis & competitive landscape,
  • Marketing plan,
  • Operational plan,
  • Management team and staffing,
  • Description of applicant's role in the business,
  • Historical financial statements, and
  • If requested in the Consent to Pursue Investment letter, projected financial statements prepared by a qualified accountant (CA, CGA or CMA)

Should an applicant find an Island business without the assistance of an Island agent, the Island business should submit the following to the Office of Immigration prior to the preparation of a business plan:
  • A completed Consent to Pursue Investment Form.
  • Current, year-end comparative financial statements, complete with supporting notes, prepared on a minimum of a "Notice to Reader" basis in accordance with Canadian generally accepted accounting principles by a professional accountant or, if not incorporated, the proprietor’s or partners' personal income tax return(s).

Once received, the Office of Immigration will assess the eligibility of the Island business and, if eligible, will issue a Consent to Pursue Investment letter.  Once this letter is received, the applicant and the business will be able to submit a business plan to Office of Immigration.  The business plan must include the sections noted above.

At any time during the application process, only an approved Island agent is able to represent the applicant through the immigration application process.  Business can not represent the applicant.  Both business and applicant are expected to obtain legal counsel.


Transaction Requirements


Any sale of equity to an applicant under the Business Impact Category, at a minimum:
  • Must make a minimum investment of $150,000 Canadian dollars (CAD).
  • Must control not less than 33 1/3 % of the equity in the business or make an equity investment in the business of at least $1,000,000 CAD.
  • Must provide active and on-going management of the business from within Prince Edward Island.
  • Must not include a redemption option in the terms of the investment.

When the applicant’s investment is in the form of preferred shares, the business will be required to execute a use of proceeds agreement. The final agreement will be posted to the website shortly.

Business Eligibility Criteria


The Business Impact Category considers applications to start or purchase the equity of a business in Prince Edward Island.  In order to be eligible, the business must generate revenue by selling goods and/or services at arm's length to third parties.  This excludes businesses operated for the primary purpose of deriving investment income, real estate rental operations, loan/investment companies and other non-active investment.

Where professional credentials or licenses to practice are required to establish or operate the business in Prince Edward Island, the applicant will be required to demonstrate, as part of the business plan, that the credentials or licenses required to start or purchase a business, have been met.  For information on foreign credential recognition visit the following websites:  http://www.credentials.gc.ca/ and http://www.hrsdc.gc.ca/eng/workplaceskills/credential_recognition/index.shtml

Businesses selling ownership to an applicant of the Business Impact Category must be aware of the terms and conditions of which the investment is being made and ensure the applicable professional advice has been obtained.  Businesses must also sign the Acknowledgement of IRPA Reg. 87 Requirements document which outlines the regulations governing economic investment under immigration.

The Office of Immigration will consider applications under the Business Impact Category that meet, or will meet, the following business eligibility criteria:

  • The business must be a for-profit corporation incorporated under the Companies Act of Prince Edward Island or the Canada Business Corporations Act and operated for the primary purpose of earning profits from active income through the provision of products/services.
  • The business must be in good standing with the Province on all debts and obligations.
  • The business’ corporate headquarters are located in Prince Edward Island.
  • The business maintains a “permanent establishment” in Prince Edward Island as defined under the Income Tax Act by regulation 400 (2).
  • The business is liable to pay income tax on taxable income earned as a result of a “permanent establishment” in Prince Edward Island, irrespective of income or other taxes which may also be payable in other jurisdictions as a result of income earned or other business activity.
  • The business must have good potential for sustained commercial viability.
  • The business must have assets with a book value of at least $150,000 CAD which are actively used for the business. Businesses will also be considered if they have assets with a fair market value of $ 150,000 CAD as valued by a certified appraiser or have received a valuation for their business from a professional accountant stating a value greater than $ 150,000 CAD.
  • Any business selling a portion of equity to an applicant (i.e., interested in the Partial Ownership Stream) must have also incurred a total of $ 60,000 CAD in wages and/or net income and demonstrate the ability to sustain an applicant’s salary.
  • The business must have the potential to create significant economic benefits to Prince Edward Island by contributing to one or more of the following:
    • Increasing value-added manufacturing, processing or primary resource activity
    • Increasing exports of goods or services
    • Increasing destination tourism, tourism attractions, tourism fixed roof accommodations
    • Increasing research and development/technology commercialization
    • Servicing an underserved local or regional market
    • Diversifying retail and restaurant investment
  • If the business is an Inn or Boutique Hotel, it must
    • not be a startup;
    • have at least 5 rental units, each having at least a three-piece bath;
    • have revenues of at least $100,000 in the last operating year, supported by financial statements or a tax return;
    • have eligible operating expenses of at least $75,000 in the last operating year, supported by financial statements or a tax return
  • If the business is in the Construction/Renovation sector, the Applicant must
    • have at least 3 arms-length staff employed full time for at least 6 months of the year;
    • rent or construct a space that is outside of their residence to conduct business from;
    • demonstrate relevant education or a minimum of 5 years experience in the proposed business;
    • meet all other terms and conditions of their escrow agreement.

The Office of Immigration reserves the right to limit applications to the Business Impact Category under the various eligible sectors to ensure economic diversity.

Participating Prince Edward Island businesses will be required to sign declaration(s) stating; they acknowledge IRPA Regulations, they will hold the Province harmless, and they have sought professional advice (legal, accounting, tax etc) on the transaction they are entering into.

Prince Edward Island businesses must agree to participate in the evaluation process of the program.  To assist in the monitoring and compliance of the Business Impact Category, the business will be required to report to the Office of Immigration for a period up to (5) five years.

For the applicant to receive approval, the business must be willing to execute and submit a purchase and sale or investment agreement (if participating in the partial ownership stream) which must include the following:

The Investment Agreement shall include, but is not limited to, the following:
  • Confirmation that the Business is not operated primarily for the purpose of deriving investment income such as interest, dividends and/or capital gains;
  • The proposed amount of the Investment in the Business;
  • The number, class and conditions of the shares being purchased (if applicable);
  • Confirmation that the investment does not include a redemption option;
  • Confirmation that the Investment is not less than 33 1/3% of the equity in a Prince Edward Island business or make an equity investment in the business of at least $1,000,000;
  • Confirmation that the Applicant provides or will provide active and ongoing management of the business from within Prince Edward Island; and
  • Time frames for the Investment.

The Purchase and Sale Agreement outlines the details of the proposed investment between the Applicant and the Vendor of the business and must include as a minimum the following information:
  • Confirmation that the Business being acquired is not operated primarily for the purpose of deriving investment income such as interest, dividends and/or capital gains;
  • Purchase price for the Business;
  • The number, class and conditions of the shares being purchased (if applicable);
  • Confirmation that the investment does not include  a redemption option;
  • Confirmation that the applicant provides , or will provide, active and ongoing management of the business from within Prince Edward Island;
  • Timelines for the purchase of the Business;
  • Confirmation the purchase price is for the whole Business, not a part of the Business;
  • Detailed description of the activities and interests of the Business.

IIDI reserves the right to amend the requirements for inclusion in the Investment Agreement and the Purchase and Sale Agreement and to request such further documentation as it deems appropriate from time to time.


Ineligible Business


Applications will NOT be considered for the following types of businesses:
  • Bed and breakfasts, hobby farms (see definitions) and home-based businesses
  • Pay day loan, cheque cashing, money changing and cash machine businesses
  • Pawnbrokers
  • Sale of used goods (excluding collectibles, or where the business provides value-added services such as repairs, refurbishing, or recycling)
  • Real estate development, unless deemed to be significant economic benefit to the Prince Edward Island economy
  • Real estate, insurance or business brokerage
  • Businesses started for the sole purpose of gaining access to immigrant investment through the program
  • Professional practices
  • Financial services
  • Consulting services
  • Any other type of business that by association would tend to bring the program or the Government of Prince Edward Island into disrepute.
  • An entity that cannot issue shares.

This list of ineligible sectors is meant to serve as an indicator only for those industries either outside of the current scope of the Province’s priorities. Recognizing these priorities may change over time, due to the changing nature of our economic conditions; Office of Immigration reserves the right to make additions or deletions to these ineligible sectors.  

Start-ups and the Formation of Incorporated Entities

  • Start-ups will not be allowed under the Partial Ownership Stream.
  • However, newly incorporated companies created from an existing Prince Edward Island business’ assets will be considered providing:
    • A Prince Edward Island business provides $150,000 CAD in assets to the new company,
    • The new company is a stand-alone business entity without reliance on the original business, and
    • The Prince Edward Island business owner has sufficient expertise in the new company’s area of operation.
  • A business that has historically operated as a sole proprietor or partnership will be considered but will need to incorporate prior to the applicant purchasing equity in their company.  In these instances, businesses should not incorporate until they are certain that the transaction will move forward.

Limitation of Access

  • Any business, or member of an associated group of companies (see definitions), that has received investment through the Provincial Nominee Program within the past 48 months will not be eligible.
  • Access will be limited to one applicant per group of associated companies.
  • Where related groups of companies (see definitions) exist, eligibility will be limited to one transaction per related group unless each company is determined by the Office of Immigration to be a stand-alone entity and is not related by way of any material business transactions.

Where there are common shareholders between multiple businesses seeking access to the Business Impact Category, the Office of Immigration reserves the right to limit access to the PEI PNP if, in the view of the Office of Immigration, one purpose of the company structure is to access further investors.

Due Diligence

 

Business Impact Category applicants and potential Prince Edward Island businesses are to obtain accounting/finance, risk assessment, tax, legal or other advice as may be required to exercise due diligence in selecting and investing. 


Declaration


It is important that applicants understand that:
  • The Government of Prince Edward Island and IIDI do not assume any liability whatsoever for the oral or written misrepresentations made by the prospective business, or an agent/representative thereof, which may lead to an applicant subscribing for shares in a Prince Edward Island business;
  • The Government of Prince Edward Island and IIDI do not guarantee, in any way, that the applicant will eventually recover his/her investment or earn dividends or any other return on their investment;
  • The Government of Prince Edward Island and IIDI do not accept any liability whatsoever for the representations, actions, errors or omissions of businesses, agents, or others involved in investment promotion, investment match making, due diligence or other activity which may be associated with the applicant making an investment.

Contact Information


For any questions regarding Prince Edward Island businesses, please contact the Prince Edward Island Provincial Nominee Program Manager at (902) 620-3628.


Office of Immigration
94 Euston Street, 2nd Floor
PO Box 1176
Charlottetown, Prince Edward Island
Canada   C1A 7M8

Telephone: 902 620 3628                           Facsimile: 902 368 5886
Email: immigratepei@gov.pe.ca             Website: www.immigratepei.ca

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