July 24, 2015 – Canada’s new program aimed at attracting high net-worth immigrants is a failure, according to documents obtained through an access-to-information request. The Immigrant Investor Venture Capital Program (IIVCP) was launched to much self-congratulation in January 2015 and billed as a replacement for theImmigrant Investor Program (IIP), which had been cancelled by the Conservative Government in 2014. Documents show that the IIVCP has received only six applications, a far cry from the 60 spots allocated to the program and the 500 applications that had been anticipated.
That might have something to do with new program requirements, according to Eren Sari, Business Development Manager at Green and Spiegel LLP. The IIP provided Permanent Residence to investors and their dependents in exchange for a 5-year, non-interest bearing $800,000 investment in Canada. When cancelled, the program had a backlog of about 60,000 applicants. In contrast, the IIVCP requires a 15-year investment of $2,000,000, with whole investment being “at-risk” – meaning investors risk losing their entire investment.
“The program looks as though it was designed in a vacuum” says Eren Sari. “Not only did they not consider the nature of the program it was replacing, they completely ignored the market for these kinds of “Citizenship-by-Investment Programs” offered by other countries. I wouldn’t even call it a failure – it never had any hope of success”.
A cursory examination of competing international programs shows that IIVCP requirements are outliers in the global competition for immigrant investors. Eren Sari asks “why would an investor risk $2,000,000 to come to Canada, when they can risk far less – as little as US$500,000 – to secure a US Green Card? With a broad array of international programs to choose from, I’m amazed that they received as many applications as they did.”
Competition for immigrant investors is fierce, with many countries offering residency and eventual citizenship in exchange for investments in their economies. In Europe, for example, investors may obtain residency in Spain or Portugal in exchange for maintaining a €500,000 5-year investment in real-estate. Residency in Antigua and Barbuda can be had for as little as $250,000. By comparison, Canada’s 15-year commitment of $2,000,000 is simply too rich, even for high net-worth international investors.
Despite a lacklustre program at the Federal level, immigrant investors hoping to call Canada home have options by way of a provincial program in Quebec. The Quebec program closely resembles the now-cancelled IIP. Qualified investors may obtain Permanent Residence in Canada in exchange for a 5-year non-interest bearing investment of $800,000 (an amount that may be financed) and an undertaking that they intend to reside in Quebec.
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