The Quebec Immigrant Investor Program (QIIP) is struggling to attract investors to its program following the introduction of strict new regulations.
Reports indicate that the scheme failed to fulfil its 2014 quota by a significant margin, despite the application deadline being extended three times. The application window was initially set to be open for just 12 days last September but was eventually launched earlier this year and recently closed on March 20th.
This is in stark contrast to 2013, when the application window was open for just two weeks when it received 5,389 valid applications. The 2012 target of 2,700 applications was reached in under a month. But for 2014, the QIIP repeatedly failed to meet its quota of just 1,750 applicants.
Historically, the QIIP has been one of the world’s most successful immigrant investor programs. It has been especially popular with wealthy Chinese nationals who have dominated the scheme for several years. From 2002 to 2012, the QIIP brought a total of 54,640 investor immigrants to Canada, out of which 35,966 were wealthy Chinese nationals.
The sharp drop in applicants is being blamed on strict new rules and documentation requirements imposed by Quebec’s authorities last year, along with substantially higher application fees. Sources say Quebec’s authorities have raised the bar too high and will have to change their selection criteria to bring back investors from China. The mainland has a huge pool of rich would-be investor immigrants eager to migrate but who would not currently qualify under Quebec’s new rules.
Quebec announced last month that the 2015 QIIP application subscription period would operate for five months beginning August 31 through January 31, 2016. This in itself is a confirmation that Quebec has been forced to acknowledge the difficulty in applicants meeting program requirements.
A new program aimed at fewer but richer immigrants has been launched by the federal government after scrapping the controversial Immigrant Investor Program (IPP) in 2014. The new investor pilot program starts this month, and will allow the Canadian government to give permanent resident status to around 50 high-net-worth immigrant investors and their families. The program aims to attract experienced millionaire investors who will contribute to economic growth.
Under the terms of the Immigrant Investor Venture Capital Pilot Program, each investor will be required to have a net worth of $10 million and make a non-guaranteed investment of $2 million over a period of 15 years. According to a government statement, these funds will be invested in innovative Canadian-based start-ups with high growth potential.
Along with post-secondary education credentials, candidates will be required to prove proficiency in either English or French and will also be required to obtain a due diligence report demonstrating that they obtained net worth of at least $10 million from lawful, profit-making business activities.
According to Chris Alexander, the Minister of Citizenship and Immigration, “Through the launch of this pilot program, we are attracting investors who can make a significant investment and who have the education and proven business or investment experience necessary to achieve success in Canada.”
Industry Minister James Moore said the pilot program is part of Canada’s efforts “to attract experienced business leaders to Canada while leveraging their business expertise and personal investments.”
From 2005 to 2012, approximately 37,000 investor immigrants arrived in British Columbia under the former Immigrant Investor Program.
Attorney Colin Singer Commentary:
The re-launched program confirms the Conservative Government’s dislike for a passive immigrant investor program. Insiders from Canada’s venture capital and private equity industry readily confirm that the business cycle to produce maximum returns for the majority of projects varies between 2-7 years. Placing a mandatory holding period of 15 years is unattractive from an investment standpoint and unmarketable in comparison to current programs in the global residence through investment industry.
A Federal Court judge has ruled against more than 1,000 Chinese millionaires who tried to immigrate to Canada under the now-scrapped immigrant investor program and then tried to force their way in through the courts.
As Canada’s immigrant investor program became increasingly popular with China’s newly affluent population, the Canadian consulate in Hong Kong was inundated by eager applicants. Over 80,000 applications applied, with about 80 per cent in Hong Kong being wealthy would-be immigrants from mainland China.
In the last federal budget, the government killed the program, prompting more than 1,000 court orders filed on behalf of wealthy Chinese, Turkey and elsewhere, who argued that their applications should still be processed.
This week, a Federal Court judge dismissed the cases en masse.
Justice Mary Gleason ruled that would-be investor immigrants to Canada had no legitimate expectation of a visa or Canadian residency, and that the government acted within the law. First, the program was closed to new applicants as it was inundated, and the government eventually ended the existing program entirely.
The federal immigrant investor program allowed foreigners with a net worth of at least $1.6-million to gain a visa and eventually Canadian residency by offering the government an interest-free loan of $800,000. The government said the program was susceptible to fraud.
The program, which was broadly criticized as flawed and inefficient, is being replaced by new programs. These are likely to be launched in the fall of 2014 with a higher net worth threshold and a much larger loan which would be invested with Canadian start-ups or venture capital firms, says Richard Kurland, an immigration lawyer in Vancouver.
Mr. Kurland said the large number of applicants was a result of immigration agents, mainly in Hong Kong and China, who were pushing the cases in a desperate attempt to gain their commissions.
Source: The Globe And Mail