Canadian Work Permit for Business Owners/ Operators

Canada has a great investment climate and offers many business opportunities for entrepreneurs willing to do business here. Foreign workers, in general, need a positive Labour Market Impact Assessment (LMIA) to get a work permit. Foreign nationals who are owners and operators of a business in Canada can apply under a special category. It is an Owner Operator LMIA.

To be eligible for an Owner-Operator Work Permit, an entrepreneur must be a sole proprietor or hold 50.1% of the shares in a Canadian company. It’s a minimum, and the higher control and ownership, the better. It is possible to apply for a work permit under this category to grow the existing business. Importantly, an applicant must take some steps to put the business in action prior to applying for the Owner Operator LMIA. For example, hiring personnel, renting space, having a website, advertising, negotiating contracts with potential customers, if any, etc.

A business must have a perspective of bringing significant economic benefits to Canada. For example, meeting the demand for a service or good, creating more jobs for Canadians, which is described in a business plan, constituting an integral part of this type of application.

An important consideration is a genuineness of a job offer. A business owner is someone who is performing duties described in NOC 00 – Senior Management Occupations. Therefore, an entrepreneur’s prior experience in managing a business (not necessarily a Canadian company) is a very important factor, speaking about the ability to successfully operate a business in Canada, for which an LMIA is requested.

While an LMIA is still needed to apply for an Owner Operator Work Permit, there are certain advantages of going through it.

Owner Operator LMIA is exempted from the job advertisement requirement, as compared to a regular LMIA. Businesspersons are not required to conduct recruitment, meaning going through a lengthy and expensive process to prove that Canadians are not available for the job. It makes the application process faster, as long as the business idea is viable and genuine.

It is a pathway for immigration for business people and their family members. Positive LMIA or a confirmation letter gives the business owner 200 Express Entry points. In many cases, it increases the Comprehensive Ranking Score (CRS) to sufficiently high allowing a business owner to be invited to apply for a permanent residence as soon as he or she has an LMIA approved. Family members, such as spouses and dependent children under 22 years of age can immigrate with the principal applicant.

Owner Operator LMIA could be eligible for expedited service – ten (10) business days processing by the Economic and Social Development Canada (ESDC). It falls under the priority if the wage being offered to the owner is at or above the top 10% of wages earned by Canadians in the province, where the job is located. For example, 47.12 C$/hr in Ontario. Within the above time frame, an ESDC’s officer reviews the application forms, business plan, supporting documents, as well as conducts an interview with a Director of a Canadian company.

With a confirmation letter, a business owner should apply for a work permit. Time varies depending on what Immigration, Refugees, and Citizenship Canada (IRCC) visa office processes an application. On average, from one (1) – to six (6) weeks. A work permit can be issued for up to two (2) years. If it is a first-time Owner Operator LMIA application, a work permit is likely to be issued for a duration of (1) one year. The rationale behind this is that a business owner could prove the viability of a business idea, and then extend a work permit.

As mentioned above, a positive LMIA for a job in NOC 00 will give 200 points to the owner-operator of a business. It may be a direct pathway to immigrate to Canada with the Expres Entry System, which will take another six (6) months.

Complete the Owner Operator Program Eligibility Form, and our immigration lawyer will get back to you with the evaluation of your eligibility.

For a “start-up” business, that exists less than a year, the owner must be financially prepared to support start-up operations, including but not limited to cover expenses associated with the office lease, marketing, procurement / direct cost of goods or services to be sold in Canada, as well as salaries and wages. There is no set threshold of what is considered a “sufficient investment” for the Owner/Operator LMIA. It is up to the discretion of the Program Officer of Employment and Social Development Canada. They will assess whether the available funds are sufficient with the view to business and financial forecast detailed in the business plan. Based on our experience, the owner of a small business would need to have around $150,000 to support business in the first year.

For a “running” business that operates more than a year, the owner will need to provide T2 Schedules – 100 and 125 of the tax return. Program Officer of Employment and Social Development Canada will review these T2 Schedules to assess financial performance, including gross sales and profitability. If the business is self-sustaining, i.e., generates sufficient operational funds to cover expenses, including salaries, these financial documents – T2SCH100 Balance Sheet Information and T2SCH125 Income Statement Information – may well be sufficient to meet the financial requirement. Notably, business profitability is not as important and its operation, and, consecutively, what is even more important – the ability to employ Canadians, pay taxes, and bring economic benefits to Canada.

For a “start-up” business that exists less than a year, a business owner should prove they have sufficient funds to operate a business in Canada with their application for LMIA under the Owner Operator Category. As an example, a bank statement from Canadian bank showing the available funds may support the financial ability.  For a “business purchase” option, the sale and purchase should be finalized before applying for the Owner-Operator LMIA. Controlling interest must be unconditional, and no one should be able to dismiss the new owner and operator. Yes, you may need to make an investment and put “money at risk” before your LMIA, and Work Permit as the owner and operator of the business is approved. In the worst-case scenario, a company can be sold, or you may want to employ someone for that role.  For a “running” business that is self-supporting and operates longer than a year, T2SCH100 Balance Sheet Information and T2SCH125 Income Statement Information should be submitted with the application for an Owner Operator LMIA and may well be sufficient.

It depends. A business that exists less than a year is considered a “start-up”. Even for a start-up, certain proof of operation should be provided with the application—for example, a lease agreement, invoices, contracts, ongoing negotiation, marketing initiatives, etc. Buying an “existing business” that is fully operational may need to make an investment and put “money at risk” before your LMIA and Work Permit are approved.

If you are selecting between these two options, the one that already brings economic benefits to Canada, has a realistic forecast, and aligns with your background may be considered as a better option. Thus, the business that already employs Canadians and pays taxes, as long as you can manage and grow it – may be viewed by the Program Officer as more realistic and “genuine,” as compared to a start-up option.

Without generalizing things too much, it worth mentioning that there may be unique / niche businesses that can show demand and exponential growth in the first six months.

The Owner-Operator Program generally exists for small and medium business owners. It does not refer to individuals who simply receive shares as a compensation package.

The size of a business can be defined in many ways, by the value of its annual sales or shipments, its annual gross or net revenue, the size of its assets or the number of its employees. Canadian institutions define small businesses according to their own needs. As a guide, a business that generates less than CA$1,000,000 in gross sales annually and employs fewer than five employees is considered a small business in Canada.

No. However, if it is your second application for Owner Operator LMIA to extend a work permit or support application for permanent residence, then you may need to provide proof of your work in Canada.

No. Interviews are conducted over the phone.

Yes. However, there may be a case when a business owner already has a valid work permit (for example, open work permit) and applies for Owner-Operator LMIA to support their application for permanent residence only. This is possible if a Canadian business operates for at least one year, as well as all other requirements are met.

No. Experience gained in Canada in the capacity of an owner and operator of a business is considered “self-employment,” and, therefore, does not qualify the owner to apply for immigration under the Canadian Experience Class Program (Lazar v. Canada and Byrne v. Canada). It is considered self-employment primarily because of the controlling interest/ownership (i.e., over 50.1%) in the business, even though owners are on payroll. However, experience gained as an owner/operator in Canada will be counted towards the Federal Skilled Worker Program, which allows self-employment.

Given the specificity of the Owner-Operator Program, in which case owners make a job offer to themselves, “genuineness” assessment is subject to higher scrutiny whenever applications for a work permit or permanent residence is made. The rule of thumb is that owners and operators of Canadian business can get 200 CRS points for a valid job offer in a NOC 00 job or 50 CRS points for a valid job offer in a NOC 0, NOC A, or B job. A valid job offer is the one that is “genuine”. A genuine job offer is the one that generally meets four conditions:

• made by an employer who is “actively engaged” in the business
• consistent with the “reasonable employment needs” of the employer
• have “employment terms that are reasonably able to be fulfilled” by the employer
• is from an employer who has shown “past compliance” with federal and provincial or territorial employment or recruitment laws

If that is the case, you may want to consider another route – Intra-Company Transfer Work Permit, which is LMIA-exempt. For Owner Operator LMIA, proof of certain operations must be provided even for a start-up company. Intra-Company Transfer Work Permit is more appropriate for a start-up company, as it does not require proof of Canadian company operations. In fact, it may be issued for the purpose of establishing a company. Once the Canadian company is fully operational, then you may want to apply for LMIA under the Owner Operator Category to get 200 CRS points for a valid job offer and immigrate to Canada.