A restaurant in a small Alberta town is for sale because the owners are retiring. A motel in Nova Scotia has a broker advertising it as “PNP eligible.” Buying an operating business can look like the faster, safer route to a provincial nomination. Sometimes it is. But the immigration rules add conditions that ordinary buyers do not face.
Many streams allow a purchase, with conditions
Most provincial entrepreneur streams accept either a new business or the purchase of an existing one. Where purchase is allowed, common conditions include:
- The business must have been operating continuously, under the same owner, for a minimum period.
- You must buy a controlling or substantial ownership share, and actively manage it.
- The business must not have been used by a previous owner for a PNP application.
- You must keep existing employees on similar terms, and sometimes create additional jobs.
- The purchase must be at arm’s length and at fair market value.
- Some streams require a visit to the business before you commit.
Some regional and rural streams are designed around business succession, where the buyer takes over from an owner leaving the community. Our business immigration guides set out which streams allow purchases and on what terms.
The case for buying
An existing business has customers, revenue history, staff and a lease. Your business plan is built on real numbers rather than projections, which makes it easier for the province to assess and for you to meet the performance agreement. It can also be quicker to become operational after you arrive.
The case for starting new
A new business gives you control over location, concept and size, which can be important if you have experience in a specific field. Some streams give more weight to innovation or to businesses in priority sectors. You also avoid inheriting someone else’s problems: debts, disputes, deferred maintenance or a lease on bad terms.
Due diligence, with an immigration lens
Buying a business for immigration purposes needs more than the usual checks. In addition to the financial, legal and tax review, you need to confirm:
- that the business meets the specific stream’s eligibility rules, before you sign anything that commits you to buy
- that the purchase agreement can be made conditional on the province’s approval
- that the revenue and jobs are real, and will still be there when you file your final report
- that the price is supported by an independent valuation, since provinces look closely at inflated prices
- that the seller’s history does not include a previous PNP use of the business
Be cautious with businesses marketed as “turnkey” for immigration, or deals where someone offers to guarantee a nomination. No one can guarantee a nomination, and arrangements designed to create the appearance of a business rather than a real one can lead to refusal and a finding of misrepresentation. Our post on misrepresentation explains the consequences.
Getting the order of steps right
The most expensive mistake is buying before you have an invitation and approval. In most streams, the purchase should be negotiated, made conditional and then completed only once the province has approved your application and signed the performance agreement. Our post on how entrepreneur PNP streams work sets out that sequence.
How we can help
At Kabir & Alam, we advise on stream eligibility before a purchase, work with your accountant and business lawyer so the transaction and the immigration application support each other, and prepare the PNP and work permit applications. Read more about our business immigration practice or book a consultation with us.
This post is general information about Canadian immigration law and is not legal advice. Every case turns on its own facts. Speak with a lawyer about your situation before making decisions.