Canada will accept 500 immigrant applications from millionaires and their families who can invest at least $2 million in the country.
But only 60 of the 500 applications, which must be filed by Feb. 11, will be approved.
The new Venture Capital program replaces an old one critics dubbed the “cash for citizenship” program because it was found to be riddled by fraud, local media reported.
The idea is to lure international investors whose investments will boost the Canadian economy.
“This pilot program is designed to attract immigrant investors who will significantly benefit the Canadian economy and better integrate into our society, which will contribute to our long-term prosperity and economic growth,” Immigration Minister Chris Alexander said in a written statement.
Each applicant must make an investment that has risk with no guaranteed return on the $2 million. The money has to be invested over approximately 15 years into a fund operated by BDC Capital, which falls under the umbrella of the government’s Business Development Bank of Canada.
The new program represents a revamp of the old wealthy investor immigration regulation that was scrapped in June 2014.
“Under the former immigration investor program, immigrant investors had to invest $800,000 in Canada’s economy in the form of a repayable loan without meeting skills and abilities requirements of most of Canada’s economic immigration programs,” the government announced in a public statement. “Research indicated that immigrant investors under the previous program were less likely than other immigrants to stay in Canada in the medium to long term. Also, they contributed relatively little to the economy, earning very little income and paying very little tax.
But the new program is not a hit with everyone.
When plans to implement the program were announced last December, the South China Morning Post of Hong Kong called the program a “tiny scheme (that) would thwart 45,000 rich Chinese who were dumped from (the old) investor immigration queue.”
The scrapping of the old program resulted in a lawsuit brought by more than 1,000 wealthy immigrants waiting for permanent residency.
Last June, a Federal Court judge ruled against the plaintiffs.
The new millionaire migration program will also require applicants to undergo intensive background checks and scrutiny by private-sector forensic accountants and auditors, according to tendering documents on a government procurement website.
The documents on the procurement website point to a new thorough and extensive examination process being implemented by Citizenship and Immigration Canada, aiming to ensure that all the wealth invested under this scheme is lawfully obtained by applicants. In addition to financial audits, applicants will also be investigated for any possible history of criminal activity or problematic political involvement.
Experts believe that this increased scrutiny might pose problems for potential investors from certain countries, the SCMP reported.
The Investor Immigration Program had become increasingly popular among citizens of Hong Kong and China, thousands of who migrated to Canada in the past 28 years. However, a deluge of applications led Canada to discontinue the program last year. At the time, about 60,000 applications were pending and had to be cancelled. Under the program, each applicant was required to provide at least C$ 800,000 as an interest-free loan to the Canadian government in exchange for permanent residency in the country.
The new IIVC is the government’s promised replacement, although it has been criticized as being completely insignificant because its small quota does not even begin to meet the high demand from Chinese investors. “What I was told was that this was a pilot project for 50 spots. The only reason they are rolling it out at all is because it was mentioned in the budget that they would, so they had to go ahead with it,” said a source from immigration industry, reported the SCMP.
The stringent checks and appraisal conditions for the program have been introduced seemingly because of China’s complaints that immigration programs such as Canada’s IIP had been helping Chinese criminals escape the country. China’s foreign ministry has even accused American and Canadian authorities of not repatriating fugitive Chinese businessmen and individuals. The Chinese government further believes that the US and Canada are the most preferred destinations for white-collar criminals fleeing China.
Immigration Canada has also warned that any lack of cooperation from the applicant which hinders the audit work will be noted as well. The final audit report is given to the applicant who in turn would have be submit it along with the complete application form. This way applicants would have the chance to cancel their applications in case the audits reveal something that puts them in an unfavorable light, like dubious finances or criminal activities.