Business Brokers BC Blog

Can I sell my business to an overseas buyer who wants to immigrate to Canada? What is the Provincial Nominee Program?

Monday, November 1st, 2010

The BC Provincial Nominee Program “PNP” is a mechanism that allows individuals who are thinking of moving to Canada to do so by purchasing an existing business.  We often meet Buyers that come in to the country using this program so we are familiar with all the related requirements.  Below is a quick overview of both eligible and ineligible businesses.

The BC PNP will consider applications to establish or purchase and expand a business that meet the following criteria:

  1. The business must be operated for the primary purpose of earning profits from active income through the provision of products/services.
  2. The business must have good potential for sustained commercial viability.
  3. The business must have the potential to create significant economic benefits to British Columbia by contributing to one or more of the following:
    • increasing value-added manufacturing, processing or primary resource activity
    • increasing exports of goods or services
    • increasing destination tourism
    • increasing R&D/technology commercialization
    • developing innovative and creative approaches to traditional businesses
    • transferring technology, skills and specialized know-how to the province
    • servicing an underserved local or regional market

The BC PNP will give special priority to business proposals that contribute to:

  • Expanding business with the Asia Pacific region
  • Utilizing wood infected by Mountain Pine Beetle
  • Diversifying the economies of communities affected by Mountain Pine Beetle damage
  • Creating business partnerships with the province’s First Nations (aboriginal people)
  • Developing the province’s emerging technology industries: alternative energy, clean technologies, information technology, new media, and life sciences

Applications will NOT be considered for the following types of businesses:

  • Bed and breakfasts, hobby farms and home-based businesses
  • Pay day loan, cheque cashing, money changing and cash machine businesses
  • Pawnbrokers, Coin operated laundries, Automated car wash operations
  • Sale of used goods (excluding collectibles, or where the business provides value-added services such as repairs, refurbishing, or recycling)
  • Real estate development/brokerage, insurance or business brokerage
  • Businesses involved in the production, distribution or sale of pornographic or sexually explicit products or services, or in the provision of sexually oriented services
  • Businesses that could bring the program or the Government of British Columbia into disrepute
  • Convenience stores, Video and DVD rental stores
  • Gasoline service stations
  • Personal dry cleaning services
  • Franchise operations, unless pre-authorized by the BC PNP

Investment in the Business

If the would-be immigrant buys the shares of an existing operating business no more than two thirds of the applicable minimum personal investment can apply to the purchase of the shares and he/she must acquire ownership and control of at least one third of the business. The shares must be common full-voting shares and must not have a redemption option.

If he/she is buying the assets of an existing business no more than two thirds of the applicable personal investment can be applied to the purchase of these assets.

In addition, at least one-third of the required investment must be directed towards expansion/improvement of the existing business that they are purchasing.

The investment made by the would-be immigrant can not be applied to the purchase of real estate unless it can be shown that it is essential to the business, in which case no more than two thirds of this investment can be applied for this purpose.

The applicable minimum personal investment can be applied to the following types of business costs, provided that the amounts are reasonable for the business involved:

  • Machinery, equipment, furniture and fixtures
  • Leasehold improvements
  • Inventory
  • Patents and licenses
  • Franchise purchase fees
  • Allowable real estate and franchises
  • Initial promotion and marketing
  • Other start-up expenses, such as incorporation and permit fees, legal and other professional fees

If, because of the nature of the business, the immigrant owner is unable to apply the full amount of the minimum required personal equity investment to these types of expenditures, he can apply the balance to wages, building rent and other normal operating expenses (excluding any payments to himself or family members) during the first six months of operations if he is establishing a new business, or three months if they are buying an existing business.

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