Acquiring a Canadian work permit is a frequently used way to immigrate Canada. There are many different work permits available, therefore it could be quite challenging to find out which type of work permit is suitable for the one’s unique situation. In this piece, we will analyse a specific type of work permit, through which the business investors choose to immigrate to Canada: the Owner Operator LMIA.
What is a Labour Market Impact Assessment?
A Labour Market Impact Assessment (“LMIA”) is a verification document that an employer in Canada may need to get before hiring a foreign worker. In most cases, employers in Canada are required to get an LMIA, if the work category is not excluded. Employment and Social Development Canada is the competent authority to assess an offer of employment, and to arrive at a positive or a negative LMIA. A positive LMIA will indicate three different results:
– there is a need for a foreign worker to fill the job,
– no Canadian citizen or permanent resident is available to do the job, and therefore
– hiring of such foreign worker will not adversely affect the Canadian labor market.
What is an Owner Operator LMIA?
Canada has a number of federal programs for foreign employers. However the requirements of the federal programs are so complicated and so hard to satisfy. Foreign employers can apply the Owner Operator LMIA through either acquiring an existing Canadian business or launching a new business in Canada. This special category of LMIA is quicker and less complicated. Unlike the regular LMIA route, the Owner Operator LMIA is exempt from job advertisement requirement.
Furthermore, foreign employers are not required to have a certain net assets or to have an investment in the designated investment fund. Foreign employers would be qualified as an owner-operator if they are able to establish a level of controlling interest in the business and to effectively conduct its operations. This controlling interest should be at the level of not being fired or dismissed.
The following must be met in order to be qualified as an owner-operator.
1. Controlling Interest
An owner-operator must have controlling interest in the business. Controlling interest can be gained:
– by being a sole proprietor,
– by being a majority shareholder (hold a minimum of 50.1% of the shares) or
– by providing an official document to confirm that one shareholder has controlling interest (in case that they do not hold 50.1% of total shares).
The foreign employer must occupy the highest position within the business. Business control will be a significant indicator of the foreign employer’s position in the business, and will demonstrate that the foreign employer cannot be fired or dismissed.
2. Active Participation in Conducting of the Business
The foreign employer must be actively involved in the business. This requires a strong business experience and a documentation that shows the foreign employer has a good background of maintaining a business. Preparing an elaborate business plan will play a key role to convince the authorities that the foreign employer has a managerial skill.
3. Creation and Retention of Jobs for Canadian Citizens or Permanent Residents
The business plan should also contain the intention to hire Canadian citizens or permanent residents. This requirement is the first focus of the owner/operator LMIA, which will leave a positive impact on the Canadian labour market.
Two different methods are anticipated for the application of the Owner Operator LMIA. The LMIA assessment will be considered depending on whether acquiring an existing Canadian business or launching a new business in Canada.
1. Acquiring an Existing Canadian Business
For acquiring 100% ownership or partial purchase of an existing Canadian business, following provisions will implement for the LMIA assessment.
1.1. Complete Purchases of the Ownership
Once the foreign employer acquires 100% ownership of an existing Canadian business, and the documentation for the LMIA application, indicating that purchase of the ownership has been completed, is provided (share purchase agreement, share certificate, notice of articles, central securities register), it would be considered as a strong evidence for the ownership.
1.2. Pending Complete Purchases
If the transaction (i.e. purchase of 100% ownership of an existing Canadian business by a foreign investor) is still pending, the authorities should assess whether the purchase is genuine. The authorities should examine several points containing whether share purchase agreement is signed, the business plan is able to carry out to acquire 100% ownership, the foreign employer has the intention to create jobs for Canadians. The existing or the foreign employer can also apply for an LMIA to hire the foreign investor in the business pending purchase. When the purchase is completed, the foreign investor, namely the new owner-operator, will submit a new LMIA.
1.3. Partial Purchase
If the foreign investor does not acquire 100% ownership but partially purchases the business, the authority will consider (i) who has the largest part of the business, (ii) whether the foreign investor is considered as principle owner or co-owner, and (iii) whether existing owners actively participate in management of the business, if so, why the foreign investor’s employment is required.
2. Launching a new business
The foreign employer who wishes to set up a new business in Canada must meet the following considerations in order to have a positive LMIA:
(i) Having a viable business plan
(ii) Intention to hire or retain Canadian citizens and permanent residents,
(iii) Preparation to open and operate the business
(iv) Holding a controlling interest in the business and actively participation in management of the business.
Once a positive LMIA is issued, a work permit is granted which will be valid for 1-2 years. Owner Operator LMIA is a pathway to immigrate to Canada, as the owner-operator investor could apply for permanent residency through Express Entry or Provincial Nominee Program. A positive LMIA or a confirmation letter gives the foreign employer up to 200 Express Entry points.
In some cases, this additional point could increase the Comprehensive Ranking Score enough high for a foreign investor to be granted an invitation to apply for a permanent residence. However, it does not automatically guarantee an invitation to apply to be issued.
You can reach Lewis Hukuk at https://lewishukuk.com/, which is always at your service with its expert staff on immigration to Canada.
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