Julien: When you look at Golden Visa, etc., it's countries that live on tourism. Canada is not one of them. Canada does not want to have tourists coming and buying properties. They don't. We prefer Canadians buy the properties. So Canada needs entrepreneurs, Canada needs workers, we need business people. So is Canada missing out on this? I think that what it's missing out is on having targets that are too low for the programs we have.

Salman: Welcome to the Investment Immigration Podcast by Uglobal.com with weekly in-depth interviews with the world's leading investment immigration professionals.

Hi, everyone. You are in our podcast again. I hope you've been enjoying our shows about the immigration program somewhere around the world. In this episode, we are going to mainly focus on opportunities for investors, entrepreneurs in Canada's immigration program in 2022.

My guest today is Julien Tétrault, who has been operating in the global investment immigration space for many years, is associated with law firm JTH Lawyers Incorporated and is currently based in Canada. So without further ado, welcome to the show Julien, and I would like you to start with telling our listeners about your background, how you ended up in the investment immigration space, and your current role at your firm.

Julien: Thank you, Salman. I've started immigration by investment 20 years ago in Hong Kong. I did it in a Canadian law firm based in Hong Kong. So I lived there for over three years and came back to Canada for the last 20 years. Then I've been involved with immigration by investment, and I've assisted over a thousand families from over 80 countries to get perma residence in Canada. And I launched JTH lawyers 10 years ago, first on my own, and then we expanded and now have partners. I'm based in Montreal, Canada as a lawyer. Also, I founded an association of Lawyers for Business Immigration because typically we had one provincial association and one association for the country of Canada for immigration, but none for business immigration, obviously the needs are quite different. So I set up this organization and acted as President for a few years, and then I let others continue with this task.

Salman: Fantastic. So as a lawyer, you could have chosen so many other specialties. Why did you really opt for this space, or what was your thinking back then?

Julien: Sure. Well, thank you for the question actually. When I was at law school, I would see all these other students going crazy for working with big firms. They were only talking about big firms etc., and they wanted to work in the same province. So I looked at what everybody was doing, I was like, "I'm gonna do something different. How do I stand out?" Let me stand out by working overseas for at least the Arctic, which is six months if not more. So I was looking for position overseas. I also did a second degree in business commercial law, so I was looking more in that field, and then the opportunity for business immigration came up in Hong Kong. So, I applied and I got the interview and they gave me 24 hours to decide, and I said "Let's go for that challenge." And a few weeks later I was on a one-way ticket to Hong Kong and say, "Let's see what's happening over there." And that was the beginning of something I've been doing the last 20 years, I've really enjoyed and never regretted ever since.

Salman: Fantastic journey. So you took a chance and look how far you've come in this field, which is growing year by year. So the big buzz these days in the Canadian immigration space is the recent announcements made by your immigration minister there, and his plan to ease the PR fund residency process there. And I want to get a sense from you about how people should look about the recent announcements there. Do you think it misses out in some areas such as not giving more incentives to entrepreneurs, and foreign investors? I ask you this question because at the moment to me, it seems the focus of the minister has been on attracting international students, foreign workers to meet the country's labor shortages. But what about other types of immigrants like entrepreneurs? What is your sense?

Julien: Sure. Basically, during COVID, Canada closed its borders and they gave priority to processing people that were already in Canada to be able to help them get perma residence. We are transiting into this post-COVID back to normal immigration if I can say in such a way, even though we were not there yet. So there's lots of catching up to do. Back in December, there was an additional budget was announced to address the backlog. Let's keep in mind that during the first two months of COVID between March and summer 2020 nothing was happening at the Immigration, nothing at all. The staff had been sent home for allegedly three weeks and the weeks became months and months. So the backlog became huge, especially since Immigration Canada had not yet transited into the digital era paperwork application. So there's a big job to do internally at Immigration Canada just to adjust to technology, and be able to receive a digital application. And yes, I would agree with you that because of the unemployment rate has never been so low, it's like all entrepreneurs in Canada are craving for staff. Anywhere you go you see advertisements for companies looking to hire, and it's very difficult to hire. In such contact, does Canada want to have entrepreneurs that come to hire Canadian? Not so much. And it's for a temporary measure. Even though my bread and butter is to bring entrepreneurs to Canada, I have to recognize the fact that when you see that you have a business that have to close because of lack of workers, the country needs more workers than anything at the moment. So yes, students will come because Canada is always welcoming students, and there's always some program to keep them and allow them to become formal residents. For example for U.S. or UK that would have a different standpoint on what they wanna do with their students, but Canada wants to keep them. So long story short, in terms of business immigration, I think that just for the time being there are not that many doors open, but as soon as the labor shortage stabilize in Canada, we should see those numbers increasing again.

Salman: Right. And you touched on an important point that how everything is also interconnected, like how the labor shortages and students and workers help businesses, and business immigration and entrepreneurs are reliant on the workforce. So it's all interconnected. But you also touched about backlog of applications which are happening. So what is the status right now, if you could give us an overview, but what is happening right now in the context of what the minister said just a few days back? And what would you say to entrepreneurs looking towards Canada right now?

Julien: So basically, if we look at programs in particular for entrepreneurs, you have provincial programs, and you have at the moment just one federal program that's usually made for entrepreneurs, and it would be the Start-up Visa program. So the provincial nominee programs also called SPNPs are typically work-product based to have entrepreneurs come hire Canadians. And if they succeed... Well first of all, if their business plan is approved by the province, then they have to come on temporary basis, make the business if it works, you hire Canadian, then you can apply for perma residence etc. But for high net-worth individuals that were used to getting straight perma residence, and then be able to do whatever business they wanna do, there's only one program at the moment. It is the Start-Up Visa program. This program is unfortunately since it's the only door at the moment to enter Canada, it's straight to perma residence, it's too popular. We need to find a way to curve this enthusiasm, way too many people apply. So if to give data, Canada is looking to approve between 1000 and 2000 applications in the Start-up Visa category, with an average of 1,500 per year. At the moment, they're receiving 1000 applications per month. This is not sustainable, and despite the fact that the government loves the Start-up Visa program, I'm very concerned by the number of applications that are received.

Salman: Before we go there, what is the status of the backlog of applications? What is your sense about that?

Julien: I feel that Canada has been increasing the number of perma residence more than it was before COVID. So they are indeed catching up. That's the good thing. However, not processing files for two years, creates a huge problem that you don't solve by accepting a little bit more than the usual that you were doing before COVID. So, it's going to take a few more years when the Minister says that he's encouraged to see that in some categories they're back to normal. Well, he's satisfied from not much if you ask me.

Salman: Right. But you're basically also saying that the future looks bright. The application count will increase, right?

Julien: Yes. Generally speaking, all categories combined, I think that it's very good to see the number of perma residence being issued. [inaudible 00:09:28] But it's going to take probably two, three more years before we get back to something that is normal.

Salman: I see. Okay, that's good. Now some of our listeners may not be familiar with the Start-Up Visa program, to begin with. So for their sake, if you could just explain a little bit about the Start-Up Visa program, and if you could also talk a little bit about the investment threshold for angel investors, VC funds, business incubators, and how they differ under the program.

Julien: Sure. So if you don't mind, I'll just start with a little bit of history on the program. Since 1986, the federal government introduced the Immigrant Investor Program, which was copied by the province of Quebec, which is the only province in Canada that has the right to select their own economic immigrants. So side by side you will have the Federal Immigrant Investor program and a Quebec Immigrant Investor program. Now the Federal Immigrant Investor program was canceled in 2012. It was replaced on a temporary basis by a Start-Up Visa program for five years. Between 2013 and 2018, you had this pilot program of Start-Up Visa program that was not popular at all. So it was repackaged, adapted, and relaunched in 2018 as a permanent program, and it has become very popular ever since, with fast-growing popularity. The Start-Up Visa program was designed between Immigration Canada, and the regulatory bodies of angel funds, venture capital funds, and incubators in Canada. The purpose of the program was to be able to attract entrepreneurs that want to launch startups in Canada. Because a startup is by definition a high-risk investment, Canada decided to say we'll give perma residence from the onset regardless of success of the business. That what makes this Start-Up Visa program unique in immigration perspective because you get perma residence regardless the success of the business, regardless if you hire or not Canadian. So that's the principle. Now from that principle, the Start-Up Visa program has three different streams. You have the incubator stream, which is by far the most popular. You have about 75%, 80% of people that will apply with the incubator stream. That stream, if I can raise as many red flags as possible, I would. But that's by far the most popular. There is no financial requirement for this program, hence it's very easy to apply for this program.

Salman: And hence, the red flags you're talking about.

Julien: And hence, the red flags. Exactly. And I'll be happy to give more details on why so many red flags that would be raising there. The second stream would be the angel investor stream. If you have support from one of the angel investors that are listed on the Canadian Immigration website, the angel fund has to invest 75,000 Canadian dollars in the startup. But the investors, there's no obligation of how much they should invest. Obviously, if the angel fund is going to invest 75,000, we can take for granted that the investors in the startup will also have to come up with some money. Finally, you have the venture capital stream where the Canadian VC has to invest a minimum of 200,000 CAD in the startup. Again, same as for angel, there is no financial requirement from the investors themselves. But since the VCs to invest 200,000, we can assume that the investors would have to invest significantly more, compared to the angel category and definitely more compared to the incubator stream.

Salman: You talked about the investment thresholds. And if you could also talk about the other conditions and industry-specific requirements that one must meet to be under the Start-Up program then that would also help.

Julien: Yeah. So regardless which of the three streams, the requirements would be the same. You need to have a level of English or French that is equal to basic knowledge. The language requirement is by far the most important. You have a net worth requirement that is very low, and basically, it's the equivalent to sustain your family in the first few months after you get to Canada. So let's say for a family of four it would be between 25,000 to 30,000 CAD. So really very cheap. Apart from that, there is no education requirement. There is no age requirement, management experience is not a factor, etc. So it's just about minimal funds and the language. Apart from that, obviously, the regular health and security issues would apply, but this is for any program in Canada.

Salman: I see. Okay. And now let's talk also about the trends you're seeing in the immigration program, the Start-Up Visa program. Let's talk about from which countries most of your applicants are coming from.

Julien: Well, you would have China and Vietnam pretty much 2 to 2 in terms of numbers, but despite the fact that Vietnam is 10% the size in terms population. You would have India as well. You would have Iran. People from anywhere in the world can apply. And then this is really spread all over the world. If we're talking about my own perspective, there's not a single country where I would say that I have most of my clients. It's pretty spread apart everywhere in the world.

Salman: I'm also asking because in the context that at the moment we are living in a time where there's a lot of global upheaval, because of wars and conflicts going on. And are you seeing some unique trends, for example from Europe coming towards Canada, like from Ukraine perhaps, or are you seeing from Russia, countries in Europe for example? Is that also a factor in seeing an increase in applicant?

Julien: So applying for Canada is never a fast program. You never apply there because you need a solution for tomorrow. So no, to answer in short, no. However, we do have some people from these countries that have initiated the process years ago, and now they say, "Okay, I want it now." Yes, we have that.

Salman: That makes sense.

Julien: There are much faster programs elsewhere in the world that high net-worth individuals would go to. Absolutely.

Salman: Definitely, definitely. Now let's talk also about how entrepreneurs and investors can find experienced local partners in Canada who could go invest with them. There are a lot of questions I've seen also about how to navigate the space in finding local partners. And what would you advise them that how they should be careful about choosing local partners? What's your advice?

Julien: That's a good point. Unfortunately, people that go through an immigration process are always vulnerable because you go to another country that you don't know. So, it's very unfortunate the number of sad stories that we hear from people that get caught in schemes. It's very important to listen to flags and to seek the reputation of the people that you trust. Are they really licensed? Are they immigration lawyers or not? Are they in Canada? Do they have a license in Canada or not? If you are working with a local agent in a home country, some may be very good, some can be terrible, but how liable would they be if something happens to your file? So you want somebody who's liable in Canada. If you don't have somebody liable in Canada, that should be red flag.

Also, if you are shopping for the cheapest price, be very careful. If you have something cheap, probably it's not something good, probably it's not something that is leading to permanent residence either. We have to be very cautious. I have people talking to me with prices that are ridiculously low, and I wouldn't very well know how to match it and even go lower. But I know that these solutions are not leading to perma residence. I can give you specific examples, people going for the incubator program, for the incubator stream of the Start-Up Visa program. You can basically buy a business plan. Some companies advertise openly, "Buy my business plan, it's good, it will get you a letter of support." You can have a designated organization in Canada that will sell the letter of support. So you can buy a business plan if you don't wanna do it yourself, and you can buy a letter of support, and then you can apply. What good does it do to you? A letter of support will never automatically transfer to a perma residence. It's against any logic that a letter of support will bring you there. A letter of support basically allows you to apply. Nowhere does it say for somebody that does his due diligence, nowhere does it say that it will lead to perma residence. Actually, the refusal rate of the Start-Up Visa program is something that people should be paying attention to. You have some designated organizations that have horrible acceptance rates. And this is information that as Canadians, we can have access to information, it costs us $5 and then we can have the list of which organization had what statistics. Do they have experience with the program? And if yes, is it good statistic, or terrible statistic? Whatever it is.

So, it's very important to deal with somebody that is liable to the Canadian authorities. A Canadian lawyer can lose its license, so you're much better protected with a Canadian lawyer as opposed to registered consultant that may not have the same implication. Now that's also what's their reputation? Is your lawyer award-winning lawyer for example, or nobody knows him? Do I have reference letters from financial institution, banks, etc., or what is the track record with former clients? The experience of other clients. What is the Google rating as well? These are elements that should be considered. But it's always also to have a discussion before transferring your first dollar, have a discussion with the immigration attorney. See if you feel comfortable having this person lead your perma residence process. Typically, once you do immigration, you will do it once in a lifetime, maybe twice as well, but it's typically just once. So be careful, make sure you do your due diligence before starting this process, and don't go for the cheapest alternative necessarily.

Salman: All these are excellent points Julien. But a lot of foreign entrepreneurs want to seek help from established business consultants and business immigration lawyers in Canada. But I've seen a lot of questions about how do they find a government sanctioned list or a directory which they could look up, where should they go to find out who's verified, and who's not? So if you could give some tips on that as well.

Julien: Yes, it's an excellent question. Actually, you will find the designated organization on the website of Immigration Canada. You will find them all. There is about 60 of them, about 30 incubators, about nine angel funds, and 22 VCs, you'll find them. You will not find the representative, you will not. We are on the provincial bar website, but all the lawyers are there. So you'll not be able to tell the difference between a criminal lawyer, a commercial lawyer, or an immigration lawyer. And even immigration lawyers, doesn't mean that if they do refugees, probably they don't do business immigration. So this being said, by going online, by Googling Start-up Visa program experienced lawyer for example, probably you can take the top three and talk to the top three and make your choice there or ask. Usually, entrepreneurs aren't in a certain network, they have contacts that have already done the process. Usually, it's word of mouth as well that is commonly used to do this process for entrepreneurs.

Salman: Okay. Those are excellent tips, and thank you so much for sharing that. Now let's talk about something off-topic from the Start-Up Visa program. I mean, when we talk about Canada's immigration program and business immigration program, there's always this question about how Canada does not have a Golden Visa program like say, in Europe or how we see in the Caribbean. And, you know, the question is always about why is that? You know. And do you think that Canada is missing out by not offering such options to high net-worth individuals who are looking for second and third residencies in this post-pandemic world? What's your opinion of that?

Julien: So, my opinion is that when you look at Golden Visas etc., it's countries that live on tourism. Canada is not one of them. Canada does not want to have tourists coming and buying properties. They don't. We prefer Canadians buy the properties. So Canada needs entrepreneurs. Canada needs workers. We need business people, but people that come on vacation, these take a hotel or rent. So is Canada missing out on this? I think that what it's missing out is on having targets that are too low for the programs we have. The Start-up Visa program with targets between 1000 and 2000 is not enough. I think there's room for a lot more. However, there's also room to probably put aside the incubator model, that gives a pathway to too many fraudulent applications. Although there's some good stuff in this stream, unfortunately, there are way too many bad ones. And that would be a way for Canada to make probably separate lines, a line for incubators that would have certain number of perma residence visas that could be issued there, and leave the rest for the big boys if I could say. The ones that come in with money, that invest in real startups, that are genuine, and that will have genuine activities in Canada create employment, pay tax, etc., etc., as opposed to simple business plans.

Salman: Okay. That makes a lot of sense. Now I also want to understand how easy or difficult it is for entrepreneurs and investors to immediately move and start doing business in Canada. For example, can an investor acquire a business using their foreign bank account, or would they need to wait, and first get a Canadian bank account? Could you just talk a little bit about the ease of doing business in Canada and the incentive that it has.

Julien: Sure. It's very much doable, and it can be done quite fast. For people that want to start a business and actually come in Canada, do it. There are several ways, and it depends on what the client wants to do, where he wants to settle, etc. But yes, it doesn't have to be the Start-up Visa program for example, which is a program to get perma residence right away. But there's pretty much several alternatives that can lead to work permit first. And if people are willing to come on a work permit, it can be done quite fast in a few months, they can be in Canada and operating a business. Yes, a business they would've acquired, a business that they would've expanded from their home country to Canada, there would be several alternatives.

Salman: Right, thank you. And Julien, there's one other question that I've also seen a lot, is about how a lot of people want to put in their money. They always are looking for low-risk businesses. And I'm seeing questions about whether it makes sense to maybe invest in medical clinics, or bakeries, with real estate. How do you advise someone like that who are looking for lower-risk businesses, and also business ideas even good in terms of gaining perma residencies and eventually citizenship in Canada?

Julien: Sure. We don't have programs in Canada that you can buy real estate and acquire perma residence or citizenship through that, we don't. But, and buying a business could be a good idea. But if you buy a business, keep in mind that probably you wanna have a condition with the seller, that if you do not get the work permit there's no penalty or there's a small penalty. Because you don't wanna buy, let's say a bakery as you mentioned, and then you wanna come in and you don't get the work permit, and then what do you do? So yes, good counseling would be necessary before purchasing, but definitely, that's a good idea. Doing business anywhere in the world can be a challenge. Doing it in a new country is even more of a challenge. So typically, new immigrants would rather go for franchises because then they will have support for franchisers. But if they wanna do their own, it's definitely possible. And if people wanna come in to just park money, maybe an investment was not the best, but if they wanna come with the money and themselves, then for sure because they have to be close to their money to be able that their business go well.

Salman: Right. So you would still advise somebody who is a risk-averse businessman or businesswoman, to go for the Start-Up Visa program. You still think that's a better way to go?

Julien: It's definitely the best way for people that wanna have the perma residence first, and then have all the options to do whatever they want without any consequence of failing whatever they wanna start.

Salman: Okay. All right. Julien, thank you so much for sharing those thoughts. If you have any last words, last advice, and last things that you want to say in our podcast about the Canadian Immigration Program.

Julien: Sure. Well, I would say that any immigration for Canada is a project that should be a middle-term to long-term project. Typically, it's for people that wanna come for family reasons, or retirement sometimes, but typically to have their children brought up in Canada. It's the education system, one of the best in the world. Their healthcare system, also one of the best in the world, and the quality of life. You always have three Canadian cities in top 10 in the world. Definitely it's a fantastic destination. And what I hear from almost all of my clients is, "I wish I had started this process sooner."

Salman: Thank you so much for sharing your thoughts and your insights about the program. I'm sure my listeners found this very useful. And I want to also shout out to our listeners to keep listening to our show. We'll have more such episodes about immigration programs from all around the world. We'll also have more shows about the Canadian programs, so stay tuned. Thank you so much.

Julien: Thank you, Salman.

Salman: You've been listening to the Investment Immigration Podcast by Uglobal.com. Join us again soon for more in-depth conversations exploring investment immigration opportunities from around the world.

Powered by Froala Editor

Powered by Froala Editor