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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:

•   100% Ownership Stream
•   Partial Ownership Stream
•   Work Permit Stream

Eligibility Process & the Use of Island Agents

• 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).

• 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)

• 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).

Transaction Requirements

• 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.

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 excluding all new construction and recreational property development
  • Increasing research and development/technology commercialization
  • Servicing an underserved local or regional market
  • Diversifying retail and restaurant investment
• No one other than an approved Island agent may represent the applicant in any capacity, to Office of Immigration, Settlement and Population.

• 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
• Timeframes for the Investment.

• 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.

Ineligible Business

• 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/brokerage, insurance brokerage 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.

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 Office of Immigration, Settlement and Population to be a stand-alone entity and is not related by way of any material business transactions.

Due Diligence

Declaration

• 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

Prince Edward Island Business Criteria Guide

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

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