The Owner/Operator (“O/O”) LMIA is a variation of LMIA that is mostly welcomed by foreign business owners who are interested to purchase an existing business or start a new business in Canada. The candidates are expected to have a controlling interest in the business by being the sole proprietor or a majority shareholder. For several years, prospective business immigrants used the O/O LMIA as a means to either purchase or establish a business. In recent months Service Canada has clarified that it will not approve an O/O LMIA for a business that is not up and running and in ordinary business operations. This means that startup operations or franchises for new operations will not be considered for an O/O LMIA. In addition, applicants will only be eligible to apply as a Senior Manager in a NOC 00 occupation, if there is already someone in the business employed in this capacity. The O/O program has been used since 2005 as one of the ways to attract foreign entrepreneurs to Canada and help them obtain a work permit and extra 200 CRS points in hopes of being eligible to apply for permanent residency after one year of working in Canada.
Recent Changes to O/O LMIAs Coming into Effect as of April 1, 2021
Service Canada, the primary governmental authority for processing LMIA applications, has recently announced that as of April 1, 2021, O/O candidates will be assessed on the same basis as other TFWP applicants. Currently, applicants do not need to meet the LMIA advertising requirements. They are exempted on the basis of being a majority shareholder and a decision maker in running the business in Canada. It is now proposed that potential owners should demonstrate that they intend to hire a Canadian or permanent Canadian resident for the intended position and provide all the supporting documentation to prove their recruitment effort.
Currently speaking, foreign business owners do not have to allot themselves the prevailing wages for the position within their industry. The proposed changes as of April 1st requires that the position be offered at the prevailing wage within the geographical area where the business is located in Canada. If the owners opt to hire themselves, they must be paid an equivalent amount as any other Canadian citizen or permanent residence in the same position and within the same geographical region.
What Does This Mean for Entrepreneurs Interested in Expanding Business in Canada?
If you do not currently meet some or all of the requirements for an O/O LMIA or you are running out of time to file your LMIA application prior to April 1st, there are several other entrepreneurial avenues you can explore. For example, there are some LMIA-exempt work permit programs established already that are geared towards entrepreneurs and current business owners:
The Intra-Company Transfer work permit is for entrepreneurs who want to expand an existing foreign business into Canada. This program is usually used by multinational corporations to move management and key staff between international branches, but it can also be an option for entrepreneurs who want to open up shop in Canada. Through this work permit, business owners can divide their time between managing their current overseas business and opening their Canadian branch, subsidiary, or affiliate.
Citizens of the U.S. or Mexico who invest in new or existing businesses in Canada may be eligible to apply for a work permit under the Canada-United-States-Mexico Agreement (CUSMA) Investor program. Eligible investors, majority shareholders, or sole owners can use this program to develop and direct their business from inside Canada.
European investors who are eligible for the CETA Investor program can stay in Canada for one year without needing an LMIA. Investors may be eligible if they are employed, in a supervisory or executive position, by an enterprise that will commit a substantial amount of capital to a Canadian business.
- Entrepreneurs/ Self-employed
The Entrepreneurs/self-employed work permit is intended for entrepreneurs who own at least 50 per cent of a seasonal Canadian business. It can also apply in cases where the owner of the Canadian business intends to live outside Canada. In such cases the work permit could be exempt from the need for an LMIA.
With all of the recent changes to Canada’s O/O LMIA program, it is easy to become confused by the requirements and eligibility status. Though many of the new requirements make it more difficult to get the foreign business up and running, it is important to consider the other available programs that can effectively help you transfer your business activities to Canada.
Please refer to our LinkedIn page to get access to online webinars or articles posted on the most recent Canadian immigration updates. To discuss the details of your situation, please reach out to our office and we will gladly assist you.