Notaries who are members in good standing of the Chambre des notaries du Québec and students-in-law under their supervision.
All agents must complete an Agent Profile and Code of Conduct Agreement for Agents , sign and date the forms and send the originals to the
Provincial Nominee Program
94 Euston Street
PO Box 1176
Charlottetown, PE
Canada, C1A 7M8
ALL applications under the Immigrant Partner Category MUST go through a recognized Provincial Nominee Program intermediary.
We STRONGLY advise that you review ALL of the program details prior to transferring any money and then contact a recognized intermediary on our Investment Matchmakers list, (the link is at the end of the program details)
Immigrant Partner Criteria
- Immigrant partners are required to have a minimum net worth of $400,000.
- Immigrant partners must be prepared to make a $200,000 investment by way of preferred shares in an eligible PEI company and to place $25,000 in escrow with the Government of PEI, to be returned on evidence of one year's residency in PEI.
- A combination of age, education, language skills and transferrable management skills. The ideal candidate to the PEI PNP is/has:
- less than 55 years of age;
- a minimum 14 years of education, including one (or more) post-secondary certificates or degrees;
- capable of being interviewed in English or French;
- has several years of management (or, preferably, business ownership) experience in a sector with relevance to the PEI economy.
- PEI will accept applicants who are not yet able to speak English or French - some of our finest applicants fall into this category - but, lack of skills in one of these languages must be offset by strengths in education or transferrable management skills. Similarly, exceptional transferrable management skills may offset a lack of post-secondary education
Application Fee
Immigrant Partners are required to submit an application fee of $2,500 with the application.
Exploratory Visit
Immigrant partners are required to make an exploratory visit to PEI of at least three business days duration. During this time, the immigrant partner will meet with the Program Officer for an interview to assess his/her application for nomination.
It is also strongly encouraged that prior arrangements have been made for the immigrant partner to meet with the principals of companies in which they may invest, preferably at the primary place of business. The necessary appointments are to be made directly by the immigrant partner (or his/her agent) with the investee company, or an investment intermediary acting on behalf of the prospective investee company(ies).
Investment Promotion and Match Making
Eligible PEI companies interested in receiving investment from immigrant partners may solicit investment directly or through an investment intermediary which acts as a match maker between the immigrant partner and the prospective investee. It is important that immigrant partners fully understand that:
- neither the Government of Canada nor the Government of Prince Edward Island assumes liability for the oral, written or other representations of the prospective investee, or an investment intermediary, which may lead to an immigrant partner subscribing for shares in an investee;
- neither the Government of Canada nor the Government of PEI guarantees that the immigrant partner will eventually recover his/her investment or earn dividends or other return; and
- neither the Government of Canada nor the Government of PEI accepts liability for the representations, actions, errors or omissions of investees, investment intermediaries, or others involved in investment promotion, investment match making, due diligence or other activity which may be associated with the immigrant partner making an investment.
Eligible Investees
A company proposing to issue preferred shares to an immigrant partner under the PEI Nominee Program will provide a written opinion from its independent legal counsel or an independent chartered accountant or certified general accountant certifying the investee company meets the following eligibility criteria:
- the company must be a for-profit corporation incorporated under the Companies Act of Prince Edward Island or the Canada Business Corporations Act;
- the company's authorized capital structure permits the issuance of preferred shares to an immigrant partner (s) in alignment with the provisions of the PEI Nominee Program;
- the investee's corporate headquarters are located on PEI;
- the investee maintains a "permanent establishment" on PEI as defined under the Income Tax Act by regulation 400 (2); and
- the investee is liable to pay income tax on taxable income earned as a result of a "permanent establishment" on PEI, irrespective of income or other taxes which may also be payable in other jurisdictions as a result of income earned or other business activity.
- The applicant company must be in good standing with the Province on all debts and obligations.
- The applicant company cannot represent the immigrant as agent, or in any capacity, to the
Provincial Nominee Program.
Where there are common shareholders between multiple Provincial Nominee Program Investee companies and/or companies seeking to access the PNP program, the PNP office reserves the right, to limit access to further PNP units if in the view of the PNP office, one purpose of the company structure is to access further units. This decision will be at the sole discretion of the PNP office.
In addition, the investee must be engaged in business which is included in the Ministry of Development & Technology's strategic priorities, namely:
- aerospace and spin-off industry;
- bio-resources, life sciences and new uses;
- information and communications technologies;
- international financial services;
- film, television and new media;
- manufacturing and processing;
- tourism attractions and tourism fixed roof accommodations, excluding cottage or recreational property development;
- first-of-kind, market-ready, peer-reviewed exportable technology including proprietary products, processes or other intellectual property.
- Special Small Added-Value Business Class: Eligible for up to two investors. Companies which are not included in any of the existing approved sectors; provide added value to product or service offerings through processing or improvement activities undertaken in-house; and target 'off Island' sales or revenue sources, or provide services or carry out business activities not normally available or performed in rural areas of the province due to geographic constraints.
- Retail investment, not to exceed 20% of the number of files processed, and with a limit of one per investor and per company.
Excluded sectors include:
- primary resources, such as agriculture, fisheries and forestry, except where the company's primary business activity is predicated upon first-of-kind, peer reviewed, exportable technology;
- wholesale;
- direct to client retail and financial services;
- business and personal services;
- most professional practices;
- real estate and construction.
It is strongly recommended that the Provincial Nominee Program office be consulted with regard to company eligibility prior to beginning the process of identifying investors. Until such approval is given, at whatever stage in the process, the investee company cannot have confidence of program eligibility and therefore, that the investment process will be completed.
Investment Prospectus/Executive Summary Business Plan
Eligible PEI companies interested in receiving investment from immigrant partners are required to make available to the immigrant partner, an executive summary business plan, prior to the investor subscribing for shares in the investee.
The summary business plan or prospectus must include, relevant information necessary for the immigrant partner to use due diligence in the selection of an investment and must include the following elements:
- a written opinion from the investee company's independent legal counsel or independent chartered accountant that the investee is eligible to receive investment under the PEI Nominee Program;
- ownership structure, including affiliated companies and subsidiaries;
- overview of the management team;
- summary business strategy;
- products/services and markets;
- operations;
- finance including:
- financial statements for the investee company's most recent fiscal year end, drafted under generally accepted Canadian accounting principles under a review engagement or audit by an independent Chartered Accountant;or Certified General Accountant, and
- two years projected financial statements drafted under generally accepted Canadian accounting principles for the investee company, including a balance sheet, an income statement, statement of changes in financial position, a cash flow forecast, a summary of accounting policies, and significant assumptions underlying the financial projections.
Investment Selection and Due Diligence
Immigrant partners will invest $200,000 via preferred shares in an eligible PEI company and will take an active role in the investee as a director or as a senior management employee at level "O" under the National Occupational Code. See matrix at
www23.hrdc-drhc.gc.ca
The immigrant partner must select the investee company in which he/she intends to invest and may not appoint an agent or other third party for this purpose.
It is critical that immigrant partners use due diligence prior to subscribing for shares or investing in an eligible PEI company because neither the Government of Canada nor the Government of Prince Edward Island guarantees or warrants that the immigrant partner will eventually receive the return of the $200,000 capital invested or dividends.
Immigrant partners are encouraged to retain legal counsel to act on their behalf in overseeing the investment transaction including the execution of the closing documents, disbursement and related matters. It is a conflict of interest for a lawyer acting as an investment intermediary, or acting on behalf of the investee company, to also attempt to provide legal advice to the immigrant partner.
Immigrant partners may contact the Law Society of Prince Edward Island or the Community Legal Information Association to obtain a referral for independent legal representation at the points of contact noted below:
Law Society of Prince Edward Island
49 Water Street
Charlottetown, Prince Edward Island
Canada
CIA 7M4
Telephone: 902.566.1666
Telecopier: 902.368.7557
E-mail: lawsociety@lspei.pe.ca
Community Legal Information Association (CLIA)
Room 158, 1st Floor Sullivan Building
PO Box 1207
Charlottetown, Prince Edward Island
Canada
C1A 7M8
Telephone: 902.892-0853
Telecopier: 902.368.4096
Website: www.isn.net/cliapei
Immigrant partners are also encouraged to obtain such accounting/finance, risk assessment, tax or other advice as may be required to exercise due diligence in selecting an investment. Referrals to a chartered accountant or certified general accountant may be provided through the respective regulatory bodies:
Institute of Chartered Accountants of Prince Edward Island
129 Kent Street, PO Box 301
Charlottetown, Prince Edward Island
Canada
CIA 7K7
Telephone: 902.894.4290
Telecopier: 902.894.4791
Website: www.cica.ca
-or-
Certified General Accountants Association of Prince Edward Island
161 St. Peters Road
Charlottetown, Prince Edward Island
Canada
C1A 4L1
Telephone: 902.368.7237
Telecopier: 902.368.3627
Website: www.cga-canada.org
Disbursement of Funds by Immigrant Partners
Except for professional fees, commissions and other sums payable for services provided, immigrant partners must pay the
good faith deposit
and the investment proceeds in trust to a lawyer licensed to practice in the Province of PEI and a member in good standing of the Law Society of Prince Edward Island. Immigrant partners are encouraged to retain independent legal counsel to act on their behalf in connection with making the investment.
Disbursement of Funds to the Investee Company and the Good Faith Deposit
Investment proceeds may be held in trust by legal counsel up until the issuance of a Nomination Certificate by the Province of PEI. However, a condition precedent to the issuance of the Nomination Certificate is evidence that the investment funds have been fully disbursed to the investee and are available for deployment in assets or operations, as contemplated in the business plan.
In particular, funds may not be held in trust pending Citizenship & Immigration Canada granting permanent resident status to the immigrant partner. Where for one reason or another, permanent resident status is not achieved, another immigrant partner may be recruited in substitution.
The Province will have received the good faith deposit of $25,000 prior to the issuance of the Nomination Certificate.
Investment Characteristics
The investment of $200,000 will be made in the form of preferred shares of an eligible PEI company.
Redemption
- subject to the provisions of the Companies Act of Prince Edward Island or the Canada Business Corporations Act, the investee company will provide its undertaking to the Minister of the PEI Department of Development & Technology to redeem the preferred shares, in full, on the fifth anniversary of actual disbursement of the investment proceeds to the investee;
- redemption, in whole or in part, prior to the fifth anniversary of the investee actually receiving the investment proceeds is prohibited. Immigrant investment financing terms and/or other mechanisms which have the effect of accelerating redemption or otherwise defeating this principle are prohibited;
The exception to this prohibition is where an immigrant partner is not granted permanent resident status by Citizenship & Immigration Canada, his/her preferred shares may be redeemed prior to the fifth anniversary, providing another immigrant partner has executed a share subscription agreement and these investment proceeds will simultaneously replace the preferred shares to be redeemed;
- in the event the investee is unable to redeem the preferred shares on the fifth anniversary of investment, the investor and the investee may mutually agree, in writing, to a redemption schedule or other repayment plan subsequent to the fifth anniversary of investment;
- where the investee fails to redeem the shares on the fifth anniversary of investment, or where the investee and investor fail to enter into other mutually satisfactory provisions for redemption, the investee, its shareholders, directors and officers shall be denied any further access to programs delivered by the PEI Ministry of Development & Technology, its crown corporations, agencies and boards.
The prohibition on access to Ministry Programs also applies to:
- wholly owned subsidiaries and affiliates where the investee in default of redemption controls 50% or more of the common shares; and/or
- companies which have in common a shareholder controlling 50% or more of the common shares; and/or
- companies which have in common officers and/or directors.
Ministry Programs include additional investment under the PEI Nominee Program, loans, equity investments, grants/contributions, incentives, subsidies, rebates, trade missions, industry development initiatives, advertising/ promotional initiatives, leased space and so forth.
Dividends
The dividend rate payable in respect of the immigrant partner's investment will be negotiable ranging from a minimum of 3% fixed, per annum, to three times Bank of Canada Prime, fixed at the date of execution of the subscription agreement, per annum;
- dividends may not be paid in advance but will be payable monthly, quarterly, or annually as the investor and investee mutually agree;
- no dividends, fees, bonuses, or other compensation may be payable to immigrant partners only, as an inducement to invest or as a return on investment, which are not also payable to other non-immigrant partner shareholders holding the same class of shares of the investee;
The Immigrant Partner as a Director of the Investee or Senior Management Employee
Federal legislation and regulations require that the immigrant partner is active in the investee company which may be accomplished in one of two ways:
- that the immigrant partner is appointed as a director of the Board of Directors of the investee company and fully discharges the legal, fiduciary and other duties of a director to the company, as required by law.
Part of the immigrant partner's due diligence in respect of the investment should include the potential risks accruing to directors of the investee. Independent legal advice should be obtained by the immigrant partner concerning appropriate risk remediation measures, including directors liability insurance coverage; or
- that the immigrant partner is employed as a senior manager of the investee company at the "O" level of the National Occupational Code. It is to be emphasized that the immigrant partner shall be an employee of the investee company, hired to do a real job, which is fully and completely described in a position description and appropriately compensated at prevailing market rates.
Consulting contracts or similar devices are prohibited. Where doubt exists concerning the employment of an immigrant partner, prior consultation with Immigration & Investment is advised.
Summary of Legal Responsibilities of Directors
All Directors or prospective Directors should be aware of their basic legal responsibilities with respect to the corporation and its shareholders.
The P.E.I. Companies Act gives Directors full power to administer the affairs of a corporation. In exercising their powers and discharging their duties, Directors must act honestly and in good faith with a view to the best interests of the corporation. In doing so, Directors must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Whether a Director has, in any given set of circumstances, discharged that obligation is a matter of opinion.
Directors must not act for a single shareholder, or number of shareholders, to the detriment of the corporation or all of the shareholders, but for the shareholders generally. Directors who represent the interests of only one shareholder or a group of shareholders leave themselves open to legal actions by shareholders who believe they have been detrimentally affected by the actions of the Directors.
Any Director of a corporation who has a personal interest in an existing or proposed material contract with the corporation, whether a direct or indirect interest, must disclose that interest to the corporation. A Director having such an interest must not vote in any resolution to approve the contract. Failure to disclose a conflict of interest, or to follow proper procedure once a conflict has been disclosed, may result in personal liability of the Director for damages claimed by the corporation or shareholders of the corporation.
Personal liability of Directors is also established by statute. The Environmental Protection Act imposes an obligation on Directors to take all reasonable care to prevent a corporation from causing or permitting an unlawful discharge of pollutants. The Act does not define what is meant by reasonable care. Therefore, what will be considered reasonable care in one set of circumstances may not be reasonable care in other circumstances. Directors are also personally liable for certain taxes and similar remittances owing by the corporation to the government, such as employee remittances under the Income Tax Act, employees' share of Employment Insurance premiums and Canada Pension Plan premiums, Goods and Services Tax remittances, Provincial Sales Tax remittances, and Workers Compensation assessments.
Directors may not delegate their responsibility to act as Directors to a proxy or any other person acting as a substitute for the Director.
Persons who have been requested to act as Directors of a corporation should consult with independent legal counsel to obtain specific advice on their duties, obligations and liabilities as Directors.
Directors' Fees
Directors' fees and expense reimbursement are negotiable, but in any case may not exceed the range of directors' fees, honoraria or expense reimbursement customarily paid to the directors of Boards of Directors of public and private corporations on PEI for non-executive functions.
The Immigrant Partner as a Senior Management Employee
Factors for Assessing 00 Classification Senior Managers
Applications under this program will be assessed in accordance with the "00" Category of the National Occupational 2001 Classification system. Below is a brief summary of some of the factors used in the assessment. The employment contract must reflect the position, functions and duties of a senior manager, and not merely an arm’s length consultant relationship with the company. To assist you in determining whether your client meets the test, a check list is set out below. More detailed information can be obtained at the NOC website.
Position Title
Senior managers usually have titles that reflect their status in the corporate structure, such as:
- president
- chairperson
- chief executive officer
- chief financial officer
- controller/comptroller
- executive director
- executive vice-president
- general manager
- regional vice-president
- vice-president
Functions
- Either alone or in conjunction with the board of directors
- develop and establish strategy and objectives for the company;
- develop or approve policies, operating standards, products and services;
- plan, organize, direct, control, evaluate operations in relation to established strategy and objectives
Duties
- determine the company’s mission and strategic direction
- effectively manage human, financial and physical resources
- authorize and organize the establishment of departments and senior staff positions
- allocate physical, human and financial resources to implement policies and programs
- establish financial and administrative controls
- formulate and approve promotional campaigns
- formulate or approve policies and programs
- approve human resources planning
- select middle managers, directors or other executive staff
- delegate necessary authority to middle management
- coordinate the work of regions, divisions or departments
- represent the organization or delegate representatives to act on behalf of the organization in negotiations and other official functions
Employment Requirements
- a university degree in business or a discipline related to the company’s business is required
- several years of experience as a middle manager is usually required
- specialization in a particular functional area is an asset
- aa. professional designations related to the business are an asset
The NOC recognizes that factors other than education and training, such as previous experience, ownership of real property and capital, ownership of intellectual property, inherent decision-making skills and organizational capabilities) can be more significant determinants for employment in management occupations. If this is the case with a particular application, ensure that these other factors are highlighted.
Bona Fide Contract of Employment
Naturally the employment contract must also contain provisions found in most other contracts of employment, including but not limited to
- bb. compensation appropriate to the duties and position in the company structure
- cc. terms of employment (probation, renewal of contract, termination)
- dd. benefits
- ee. reporting relationships and accountabilities
- ff. restrictive covenants or confidentiality issues.
Including language as indicated in the NOC2001 for the 00 – Senior Management does not guarantee acceptance of the application; assessors will look behind the language to ensure that the contract of employment is bona fide and reflects a real senior management position for the nominee.
Pooling of Investment
Not more than four immigrant partners may hold preferred shares of an eligible investee at one time. The limit of four investors to an investee will include wholly owned subsidiaries or affiliated companies where 50% or more of the common shares are held by a single shareholder or by a beneficiary company of immigrant partner investment.
Good Faith Deposit
In applying to immigrate to Canada under the PEI Nominee Program, the applicant certifies the intention of settling in PEI. As evidence of good faith, the Province requires that the applicant will place in trust with the Government of PEI a $25,000 performance deposit which is fully refundable, without interest, one year after landing provided that the immigrant partner can demonstrate to the satisfaction of the Province that:
- the immigrant partner is active in the investee company as a director or senior management employee; and
- the immigrant partner and his/her family maintain a residence in PEI.
Evidence that the immigrant partner is active in the investee company as a director or senior management employee will take the form of a declaration to this effect by the Chair of the Board of Directors and the Chief Executive Officer on behalf of the investee company, and the immigrant partner.
Evidence that a residence is maintained in PEI may include, for example, a pre-arranged visit to establish that the dwelling is owned/leased and occupied by the immigrant family; local employment; utility bills; rental receipts; property tax records; registration of any children at a local school or daycare facility; community corroboration and so forth.
It is a serious offence under the Immigration and Refugee Protection Act and Regulations to falsify any documentation to be used by an immigrant to achieve Permanent Resident status as a provincial nominee or otherwise.
Where the conditions precedent to refund have not been met, the deposit will be forfeited to the Province as a penalty.
