The federal government has recently launched its new Immigrant Investor Venture Capital (IIVC) Pilot Program which aims to raise $120 million from 60 eligible ultra-high net worth investors. The funds are intended to be invested in Canada-based start-ups with high growth potential. Ironically, the new program, unofficially confirms Canada’s definitive retreat from the global residence-through-investment industry, which it created in 1986 with the Quebec government.
Under the new program, approved applicants with a personal net worth of $10 Million, must invest at least $2 million into a government approved VC fund for a minimum period of 15 years, with no guarantee for return of capital. Applicants must demonstrate their net worth threshold was obtained from lawful, for profit-making management, business or investment activities providing capital or equity gains. Inheritances or assets from principle residential real estate are excluded.
Additional requirements include mandatory language testing and proof of completed Canadian post-secondary education of at least one year, or proof of a foreign educational equivalent. Education assessment can be exempted for applicants with a personal net worth of $50 million. A maximum of 500 applications will be accepted during the 14-day solicitation period which ends in mid February. The government then plans to invite up to 60 candidates to apply for Canadian permanent residence. Applicants will be charged a modest processing fee of $1,050. Selected applicants must also submit a comprehensive due diligence report prepared by a designated service provider to ensure the source of wealth is generated from lawful business or investment activities. The fund will be managed by BDC Capital, the investment arm of the Federal Business Development Bank of Canada and by government selected fund managers.