2018-05-15 11:18:16 Starting a Business English Learn about the Investment Canada Act, and find out how it affects you if you're looking to make an investment in a business in Canada.... https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/04/investors-discuss-the-investment-canada-act.jpg https://quickbooks.intuit.com/ca/resources/starting-business/investment-canada-act/ Understanding the Investment Canada Act

Understanding the Investment Canada Act

2 min read

You can open a business in Canada even if you’re not a Canadian citizen — and there’s help available to get you through the somewhat complicated process. Start by checking out the Investment Canada Act, which applies to you if you’re either a new Canadian resident or a non-citizen who wants to do business here.

Who Is Covered by the Investment Canada Act?

If you are a citizen of a country other than Canada, you need to comply with the Investment Canada Act. The act also applies to you for a year after you became eligible to apply for citizenship in Canada. So, if you were recently granted a permanent residency, you may still be considered a foreign investor by the Canadian government. What if you own your business with a Canadian? The government considers the business non-Canadian if you own or control the majority of the company. The act applies whether you’re starting a new business or buying an existing business in Canada.

How Can You Comply With the Act?

Do your plans involve either buying an existing Canadian business or forming a Canadian startup? You need to file a Notification or an Application for Review. For most companies, a Notification is enough. You must submit this form within 30 days after you start or take control of the business. The government then has 45 days to approve or deny your investment. Officials may extend that review period by 30 days.

If your new business falls into specific categories and meets certain thresholds, you must submit an Application for Review instead of a Notification. You may need a review if your business falls into one of these categories:

  • Private sector World Trade Organization investments
  • Private sector trade agreement investments
  • State-owned enterprise WTO investments
  • Non-WTO investments

The value of your company determines the thresholds. If you’re buying a private sector WTO business, for example, you need a review if the business is valued at $1 billion or more. You are not allowed to buy or start qualifying businesses until your review process is completed and approved. It’s a good idea to check the review requirements, but don’t worry — most small businesses only need a Notification.

What About Cultural Businesses?

If you’re a creative with plans to start a publishing company, a film studio, a music company, or a similar "cultural" business, you have different standards to meet. Check out the Investment Canada Act’s standards for cultural businesses. If you’re buying or starting a company in this category, you need an Application for Review if the company’s assets are worth $5 million or more. The term "cultural" covers a variety of business types. You may qualify if your company produces, distributes, or sells any of the following:

  • Books, magazines, or newspapers, either in print or digital form
  • Film or video
  • Music, either in print or digital

Are you a radio, TV, cable TV or satellite broadcaster? Then you’re also considered a cultural business.

Whether you plan to move to Canada or run your business remotely, the Investment Canada Act applies to you. For most entrepreneurs, starting a business in Canada is as simple as filing a Notification. By staying up to date on the requirements, you can stay compliant and protect your company from legal action.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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