Strange as it may sound, there’s a link between rising property prices in India and faraway Canada: the Canadian immigrant investor programme. Immigration experts feel that a large number of business families, who are making big money from property deals here, are increasingly considering the immigrant investor programme of Canada as an easy passage to that country.
Going by figures, while there were 8 applications received under this category in 2004, this increased to 11 in 2005, 9 in 2006 and 5, so far, in 2007. Visas granted under this category were 4 in 2004, 15 in 2005, 17 in 2006 and 53 in 2007 so far.
The difference in numbers of applications and visas granted is mainly due to the fact that under this programme, the principal application as well as his or her family members obtain permanent residence status immediately on arrival in Canada.
The immigrant investor programme was created by the Canadian government to attract top business people from around the world to immigrate to Canada. Under the programme, the immigrant investors have to commit themselves to making a 100% guaranteed passive investment of C$400,000 for a five-year term. The investment is fully secured and risk-free and reimbursed by the government in full, on maturity.
It is, in fact, guaranteed by the government. The investors have to show business experience and a minimum net worth of C$800,000 that was obtained legally. The investment is managed by Citizenship and Immigration Canada (CIC) and is guaranteed by the Canadian provinces that use it to create jobs and help their economies grow. CIC will return the C$400,000 investment, without interest, about five years and two months after payment.
And since the investment is passive, the immigrant does not need to establish a company and neither does the programme have any language or age restrictions as in many other visas. In fact, the Canadian programme is far more flexible than investor programmes of other countries.
Under the Canadian programme, the immigrant investor lends the government C$400,000 for five years, and then gets the money back. It’s a secure loan but not an investment. Investors may borrow the money from approved Canadian financial institutions if they don’t have cash. If they borrow, the cost of the permanent residence status is about $125,000.
The programme is considered safe and offered only to people who have business experience and meet the net worth conditions. While not many countries have immigration options for investors, some like the US require immigrants to play an active role in setting up and managing a business. Besides, the benchmark of these programmes is also sometimes very high when compared to the Canadian investor programme.
“With rising earnings in India from multiple sources such as returns on investment in business and real estate, more and more business families in India are looking to liquidate their assets in India and invest in Canada. Many sectors in Canada are currently on an upward trend including real estate. The economy too has strong fundamentals and investment into Canada is healthy for many reasons. Today the C$400,000 which will initially be invested can later be used to buy a single family detached home in the greater Toronto area, a city where the majority of immigrants from India tend to settle,” says Atul Ahuja, former director of marketing & communications at the Indo-Canadian Chamber of Commerce (ICCC) and CEO of the Canadian Cricket Association.
Canada is also popular among Indian immigrants because of the right to free education and medical services for the entire family. Marc Audet, vice-president, immigrant investor programme at Desjardines bank in Canada feels that the high property prices in India mean that more people are qualifying as investors.
“Besides, the liberalised forex regulations of the Indian government have also led to greater interest in the programme. This programme is suitable for high net worth Indians and the advantage that it gives them is that it is unconditional and does not require that the investor remain active in any business in Canada. There are no conditions attached to it with regards to age or language proficiency and educational qualifications,” Mr Audet says.
He feels that in some cases people are using this programme to work around the language and other qualification requirements in many other immigration categories in Canada. “Many people from Delhi and Mumbai and others from the states of Punjab and Gujarat are considering this as a good option to settle down anywhere in Canada and also because the visa processing is much faster than other categories,” he adds.
The Desjardins group has a programme under which it offers pre-approved financing to immigrant investors which helps them meet the investment requirement. The loan from the bank can go up to even 70% of the required investment. The advantage for the investor is that they can then put their own money in higher-return investments.
Besides Canada’s Federal investor category, the other investor programme that is popular with Indians is the Quebec investor category. Under the Quebec investor programme, an applicant has to have management experience in top positions in an organisation and the source of funds should be self-generated. The federal programme, on the other hand, allows applicants to show all legally acquired funds which could even be inherited or received as a gift.
“For both the investor programmes, the age factor is an important advantage. These programmes are suitable for applicants who want to retire from their business or professional services and settle down in Canada. However, the prescribed parameters are very strict and both the federal government and the provincial government of Quebec often reject cases even if applicants are willing to invest the requisite amount in the federal fund or the Quebec fund. Success is, however, assured if the financial documents submitted with the application are sound and the source of investment and income has been reflected in the books of accounts checked by the Indian IT department,” says J S Ahluwalia, senior advisor with Global Placement Services of Canada.
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