Prince Edward Island Business Impact Category

This category is composed of the following three streams, each with their own set of eligibility requirements:

• 100% Ownership Stream
• Partial Ownership Stream
• Work Permit Stream

This page will also highlights details on the following topics relevant to all three streams:

• Priority Streams
• Business Eligibility

100% Ownership Stream

This category is for Investors who plan to assume full ownership of a PEI business by investing in and actively managing the business are eligible for this stream.

Minimum Requirements

To be eligible under the 100% Ownership Stream, applicants must:

• Be within 21 and 59 years of age;
• Possess a minimum net worth of $600,000 CAD acquired through legal and legitimate sources;
• Possess at least a high-school level of education;
• Have transferable management skills and past employment;
• Score a minimum of 4.0 on an IELTS English test within the last two years;
• Provide a detailed business plan for 100 percent ownership of the business;
• Provide active and ongoing management of the business from within PEI;
• Sign an escrow agreement containing stipulations on a deposit of $200,000, which will be held by the province until the terms of the agreement are met; and
• Make a minimum investment of $150,000 CAD into a new or existing PEI owned and operated business.

Escrow Agreement

The escrow agreement outlines the terms that the applicant must meet in order for his or her $200,000 CAD deposit to be refunded. The agreement and its terms are unique to the applicant and are based on his or her intentions according to the business plan.

The deposit is to be submitted to the Office of Immigration and made payable to IIDI, to be held in escrow until all terms are met. The deposit will be returned, without interest, to the applicant according to the following timeline: $25,000 CAD will be refunded after six months of residence in PEI, another $25,000 CAD after one full year of residence, and the remaining $150,000 CAD once the applicant has met all terms of the escrow agreement.

Purchase and Sale Agreement

If the applicant is purchasing 100 percent of an existing business in PEI, rather than establishing a new business, he or she will be required to submit a purchase and sale agreement, which provides the details of the proposed investment. The following information must be included:

• Confirmation that the business being acquired is not operated primarily for the purpose of deriving investment income such as interest, dividends and/or capital gains;
• Purchase price for the business;
• The number, class, and conditions of the shares being purchased (if applicable);
• Confirmation that the investment does not include a redemption option;
• Confirmation that the applicant provides, or will provide, active and ongoing management of the business from within PEI;
• Timelines for the purchase of the business;
• Confirmation that the purchase price is for the whole business, not a part of the business; and
• A detailed description of the activities and interests of the business.

Partial Ownership Stream

This category is for applicants who plan to assume partial ownership (at least one-third) of a PEI business through investment and involvement in the day-to-day operations of the business are eligible for this stream.

Minimum Requirements

To be eligible under the Partial Ownership Stream, applicants must:

• Be within 21 and 59 years of age;
• Possess a minimum net worth of $600,000 CAD acquired though legal and legitimate sources;
• Possess at least a high-school level of education, or equivalent;
• Have transferable management skills and past employment;
• Score a minimum of 4.0 on an IELTS English test within the last two years;
• Provide a detailed business plan for partial ownership of the business;
• Provide active and ongoing management of the business from within PEI;
• Sign an escrow agreement containing stipulations on a deposit of $200,000 CAD, which will be held by the province until the terms of the agreement are met; and
• Make a minimum investment of $150,000 CAD in a PEI business for a partial ownership interest of at least 33.33 percent (one-third) of voting shares, or make a minimum $1,000,000 CAD investment in the company.

Escrow Agreement

The escrow agreement outlines the terms that the applicant must meet in order for his or her $200,000 CAD deposit to be refunded. The agreement and its terms are unique to the applicant and are based on his or her intentions according to the business plan.

The deposit is to be submitted to the Office of Immigration and made payable to IIDI, to be held in escrow until all terms are met. The deposit will be returned, without interest, to the applicant according to the following timeline: $25,000 CAD will be refunded after six months of residence in PEI, another $25,000 CAD after one full year of residence, and the remaining $150,000 CAD once the applicant has met all terms of the escrow agreement.

Investment Agreement

If purchasing at least 33.33 percent of the equity of an existing business in PEI, the applicant will be required to submit an investment agreement, which provides the details of the proposed investment. The following information must be included:

• Confirmation that the business being acquired is not operated primarily for the purpose of deriving investment income such as interest, dividends and/or capital gains;
• The proposed amount of the investment in the business;
• The number, class, and conditions of the shares being purchased (if applicable);
• Confirmation that the investment does not include a redemption option;
• Confirmation that the investment is no less than 33.33 percent (one-third) of the equity of the PEI business or that the applicant is willing to make an equity investment in the business of at least $1,000,000 CAD;
• Confirmation that the applicant provides, or will provide, active and ongoing management of the business from within PEI; and
• Time frames for the investment.

Work Permit Stream

The Work Permit Stream is for applicants seeking to transition faster to life in PEI. Applicants under this stream can start a new life and business using a temporary work permit, which enables them to enter Canada and become familiar with the business in which they will be investing prior to being nominated by Prince Edward Island. The temporary work permit is issued by Immigration, Refugees and Citizenship Canada (IRCC), not the PEI PNP.

Minimum Requirements

To be eligible under the Work Permit Stream, applicants must:

• Apply to IRCC for approval of a work permit for the PEI business that they intend to manage;
• Possess a minimum net worth of $600,000 CAD acquired through legal and legitimate sources;
• Possess at least a high-school level of education, or equivalent;
• Have transferable management skills and past employment;
• Score a minimum of 4.0 on an IELTS English test within the last two years;
• Provide a detailed business plan for full or partial ownership of the PEI business;
• Provide active and ongoing management of the business from within PEI;
• Sign a Performance Agreement containing stipulations on the business investment that must be satisfied to proceed with nomination; and
• Make a minimum investment of $150,000 CAD in a new or existing PEI business.

Once an application has been submitted and approved by PEI Immigration Services, the applicant is deemed eligible for the Work Permit Stream. The applicant will be presented with a letter of support from Immigration Services, which he or she can then use to apply to IRCC for a temporary work permit to Canada.

Performance Agreement

The performance agreement outlines the terms that the applicant must meet in order to receive a nomination for permanent residence under the Work Permit Stream. This agreement includes, at minimum:

• Timelines of the investment;
• Amount of the investment;
• Reporting ad monitoring guidelines; and
• Pre- and post-nomination requirements.

Once the terms of the performance agreement have been met, the applicant will receive a nomination for permanent residence in PEI.

If the applicant is choosing to purchase 100 percent of an existing business in PEI, he or she will be required to submit a purchase and sale agreement (See Purchase and Sale Agreement, above).

If the applicant is choosing to purchase at least 33.33 percent, but less than 100 percent, of the equity of an existing business in PEI, he or she will be required to submit an investment agreement (See Investment Agreement, above)

Priority Streams

PEI relies heavily on its core industries to create economic value. As a result, the province is limiting its nominations by prioritizing applications involving the following:

• Creation or expansion of an export-oriented business
• Business that utilizes primary sector resources from agriculture, fishery, or forestry sectors
• Business that helps to economically diversify rural communities in PEI
• Business that develops PEI’s emerging innovative sectors: bioscience, information technology, aerospace and renewable energy

Business Eligibility

The Business Impact Category considers applications only involving businesses that generate revenue through the sale of goods or services at arm's length to third parties. This excludes businesses with the primary purpose of deriving investment income, real estate operations, loan investment companies, and other non-active investment.

Applicants are required to demonstrate, in the business plan, that any and all credentials and/or licenses required to start or purchase the business have been met.

Minimum Requirements for Business Eligibility

In order to be considered an eligible business under the Business Impact Category, the business must:

• Be a for-profit corporation incorporated under the Companies Act of PEI or the Canada Business Corporations Act;
• Operate for the primary purpose of earning profits from active income through the provision of products/services;
• Be in good standing with the province on all debts and obligations;
• Maintain corporate headquarters in PEI;
• Maintain a ‘permanent establishment’ in PEI;
• Be liable to pay income tax on taxable income;
• Have good potential for commercial viability;
• Agree to participate in the evaluation process of the program, which requires the business to report to the Office of Immigration for up to five years;
• Be willing to execute and submit a purchase and sale or investment agreement in order for the Business applicant to be approved;
• Sign a declaration stating that it acknowledges the IRPA Regulations, it will hold the Province harmless, and it has sought professional advice (legal, accounting, tax etc) on the transaction it is entering into;
• Obtain accounting/finance, risk assessment, tax, legal or other advice as needed to exercise due diligence in selecting and investing;
• Have assets with a book value of at least $150,000 CAD, which are actively used for the business;
  • A business will also be considered if it has assets with a fair market value of $150,000 CAD as valued by a certified appraiser or if it has received a valuation for its business from a professional accountant stating a value greater than $150,000 CAD
• Have the potential to create significant economic benefits to PEI; and
• Any business selling a portion of equity to an applicant (i.e.,under the Partial Ownership Stream) must have also incurred a total of $60,000 CAD in wages and/or net income and demonstrate the ability to sustain an applicant’s salary.

Ineligible Businesses

Applications from the following types of businesses will not be considered under the Business Impact Category:

• Bed and breakfasts, hobby farms, and home-based businesses
• Pay day loans, cheque cashing, money changing, and cash machines
• Pawnbrokers
• Sale of used goods
• Real estate development/brokerage, insurance brokerage, or business brokerage
• Professional practices
• Financial services
• Consulting services
• Any entity that cannot issue shares
• Any business that will bring the government of PEI into disrepute
• Any business started for the sole purpose of gaining access to immigrant investment through the program

Start-ups and Newly Incorporated Entities

Start-ups will not be considered under the Partial Ownership Stream.

Newly incorporated companies created from an existing PEI business' assets will be considered under the Business Impact Category provided that:

• A PEI business provides $150,000 in assets to the new company;
• The new company is a stand-alone business entity without reliance on the original business; and
• The PEI business owner has sufficient expertise in the new company's area of operation.

A business that has previously operated as a sole proprietor or partnership will be considered but will need to incorporate prior to the applicant purchasing equity in the company.

Limitation of Access

Businesses that have received investment through this Provincial Nominee Program within the past 48 months (four years) will not be eligible. This applies to members of associated groups of companies. Access will be limited to one applicant per group of associated companies.

The same limitation of access applies in the case of related groups of companies as well. If each company is determined by the Office of Immigration to be a stand-alone entity, however, this limitation does not exist within the related group.

Additionally, in the case of common shareholders between multiple businesses, the limitation of access is at the discretion of the Office of Immigration.