Owner/Operator LMIA based Work Permit (WP) is a pathway to Canadian Permanent Residence (PR) for business owners
and entrepreneurs. Foreign Nationals (FNs) from any country may qualify for an Owner-Operator LMIA based
Entrepreneurs and investors with business experience and capital to invest have several pathways to choose from in order to immigrate to Canada. Some of the options are:
- Self-employed Persons Program
- Start-up Visa Program
- Entrepreneur Programs of Provinces and Territories
- Quebec’s Immigrant Investor Program
However, if you do not meet the narrow requirements for “self-employed” applicants, do not have the support of a
“designated organization” in order to qualify for an entrepreneur start-up visa program, and do not have the
“capital” to invest in the provincial or territorial entrepreneurial/investment streams, Owner-Operator LMIA
pathway is a great permanent residency option.
To qualify for an Owner-Operator LMIA, you will have to buy an existing Canadian business or setup a new business in Canada. This means that you should have capital to invest. There is no minimum investment amount specified, but the investment must make sense given your business plan.
The Owner-Operator pathway is a 2-stage pathway where an initial WP serves as the platform to become a permanent resident of Canada. The steps involved are:
1. Purchase an existing Canadian business or start your own business in Canada
2. Create a job position for yourself as an employee of the business and apply for the Owner-Operator LMIA to
Employment and Social Development Canada (ESDC)/Service Canada
3. Obtain your work permit based on a positive LMIA and start working for your own business as its employee
4. Apply for Permanent Residence of Canada
ADVANTAGES OF THE OWNER-OPERATOR PATHWAY
- There is no minimum net worth requirement
- There is no minimum investment amount required
- The business can be established anywhere in Canada
- The spouse of the owner/operator receives an open work permit and the dependent children receive a student permit or temporary resident visa depending upon their age
- The processing time is short (usually 3-6 months to obtain an LMIA and WP)
- You can immediately apply for PR after obtaining your WP and starting work at your established business in Canada
- Work permit, if required, can be extended an indefinite number of times provided the business is still in operation
WHAT IS AN LMIA?
Employers in Canada can hire temporary workers to fill temporary labour or skill shortages through the Temporary Foreign Worker Program (TFWP) among other streams and programs. However, before hiring a temporary foreign worker (TFW) through the TFWP, an employer needs to get a Labour Market Impact Assessment (LMIA) (unless the work category is excluded). Government of Canada website defines LMIA as a document which an employer may need to get from Employment and Social Development Canada (ESDC) also known as Service Canada before hiring a foreign worker. A positive LMIA or a confirmation letter grants permission to the employer who proves that there is a need for a foreign worker to fill the job as no Canadian worker is available and that such hiring will not negatively impact the Canadian labor market.
What is an Owner-Operator LMIA?
Owner/Operator LMIA is a special class of applications within the TFWP whereby a self-employed individual wishing to enter Canada can do so by purchasing or establishing a business. For the purpose of TFWP, owner-operators are defined as:
- Foreign Nationals who hold a share in a business located in Canada, and
- Are classified under a National Occupation Classification (NOC) 0, A, or B occupation
A foreign national would be considered to be an owner-operator if they establish that they have:
- Controlling interest in the business, and
- Cannot be dismissed (only answerable to themselves).
The foreign nationals must demonstrate that they have the controlling interest prior to submitting their application for Owner-Operator LMIA and for the duration of their employment in Canada. Controlling interest according to guidelines and policy can be established by either:
- By being the sole proprietor i.e. by purchasing or establishing a business and being involved in its day-to-day operations,
- By being a majority shareholder (hold a minimum of 50.1% of the shares), or
- By providing an official document to confirm that one shareholder has controlling interest (even if they don’t hold 50.1% of total shares).
There is no specified minimum percentage of shares to be held by a foreign national to be considered an owner-operator. However, individuals who only receive shares (less than to establish the controlling interest) as part of a compensation package are not subject to the term owner-operator.
Step 1: Purchase an existing Canadian business or start your own business in Canada
Whether you purchase an existing business in Canada or start a new business in Canada, in addition to the objective of gaining permanent residency of Canada for you and your family, you have also to consider factors which will influence the success or failure of your business. To give your business the best chance of success, you also have to decide on what type of business to purchase or start in Canada, whether the business you choose to purchase or start is eligible for the Owner-Operator pathway, the amount of capital you need and/or want to invest, and the place where you want to settle in Canada. To investigate all these factors, you may need professional consultation, advice, resources, and support.
Step 2: Create a job position for yourself as an employee of the business and apply for the Owner-Operator LMIA to Employment and Social Development Canada (ESDC)/Service Canada
Since you will be entering Canada as a skilled worker under the Temporary Foreign Worker Program, your employer
i.e. your business will have to apply for a LMIA.
Before applying for LMIA, most employers have to advertise the employment opportunity, usually a month in advance, offering the employment to Canadians, people of First Nations, and permanent residents of Canada. They can apply for an LMIA only if they do not get a suitable candidate after advertising the position. However, for Owner-Operators there is a “variation” or exemption from this requirement.
The application for Owner-Operator LMIA must be approved (confirmed) to have a positive or neutral impact on the Canadian labour market. This determination will make you, as a temporary foreign worker, eligible to apply for a work permit to work at your newly started or purchased business in Canada.
Assessment of most LMIA applications by ESDC is based on seven labour market factors. However, in case of LMIA
applications submitted by Owner-Operators who have already bought 100 percent stake in the business, ESDC’s
emphasis for the purpose of assessment is only on two labour market factors - job retention and job creation.
Specific details given by you regarding which jobs will be created and retained, along with their timeframes,
will aid the ESDC officer to determine whether your employment as an Owner-Operator will have a positive or
neutral effect on the labour market in Canada or not.
If the completion of the purchase of 100% stake in the business is contingent on your LMIA and work permit, then
in addition to job retention and job creation, you will also have to prove your intent. You can prove your
intent by finalizing share purchase agreements, setting up escrow accounts, and depositing money in them for the
purchase of the business. In this scenario, the existing owner will hire you and apply for the LMIA for your
In case of a partnership or a partial stake purchase, authorities will consider the following additional factors before granting LMIA approval:
- Whether you shall have a majority stake in the business or not
- Whether your appointment as an employee can be terminated without your consent/agreement or not
- The extent to which existing shareholders will continue to play an active role in the management of the business.
- Whether the business is profitable enough to pay the salary to you without considering the additional capital brought in by you or not
- The responsibilities and duties that the investor-employee will take on after being appointed in the position
In this scenario also, the existing owner will hire you and apply for the LMIA for your position.
In case you are setting up a new business in Canada, fulfilling the ‘active engagement in the management of the business’ can be difficult to prove. You can prove this when applying for LMIA and work permit by highlighting your role in various tasks related to the establishment of the business.
These can include:
- Negotiating various contracts related to setting up of the business, including lease agreement for the premises, contracts for equipment, appointment of other workers, etc.
- Applying for Business Number (BN) registration with the Canada Revenue Agency and completing other regulatory formalities, licenses, and permits for establishing a business
- Creating a detailed business plan that showcases your understanding of the business and your involvement in the planning process of establishment of the venture.
A well prepared BUSINESS PLAN can take care of all the above points. Your Business Plan must be elaborate and convincing. It must convince the ESDC officer that you know what you are doing. It should also show:
- Details of how you will fund the business and create/maintain employment
- That you will be actively involved in the business. You should show that you are not making a passive investment. Instead, you intend to run and develop your business further
- Show your intention to retain existing employees and your intention to hire at least one more Canadian citizen or permanent resident (ideally, in the first year of the business)
Step 3: Obtain your work permit based on a positive LMIA and start working for your own business as its employee
When your Owner-Operator LMIA is confirmed to have a positive or neutral effect on the labour market in Canada
(this is called LMIA confirmation) by ESDC Canada, you are eligible to apply for a Work Permit (WP) to work in
Canada. Depending on your citizenship and residence, you may be able to apply at a Port of Entry to Canada.
Otherwise, you may need to apply online for your WP outside of Canada and processing times can vary.
If you apply online for your WP outside of Canada, Immigration, Refugees and Citizenship Canada (IRCC) Officer must determine if:
- the job offer is genuine
- the issuance of a work permit would not be inconsistent with the terms of any federal-provincial agreement that apply to the employers of foreign nationals
Genuineness of job offer
The officer has to decide whether the job offer is genuine. This provision has to be interpreted in light of the
temporary foreign worker program (TFWP) policy published by Service Canada. Current TFW policy requires that an
employer must be identified and the employer/employee relationship established to allow ESDC to fulfill its
regulatory responsibilities in the administration of the TWFP. Further as per policy, “An offer of employment is
made by an employer or group of employers to a foreign national thereby establishing an employer—employee
In case of owner-operator, to establish employer-employee relationship in absence of a job offer, the controlling interest, the business plan or contract to purchase shares in a business are evaluated by ESDC as equivalent to a job offer in the context of the TWFP.
If Owner-Operator specified requirement of English or French at a higher level than CLB 5, then while applying for Work Permit to IRCC, the Owner-Operator will have to provide language proficiency proof in the form of a valid language test result to meet those requirements. On the other hand, if ESDC officer checked off English or French as a requirement, while issuing the positive LMIA, based on reasonable employment needs assessment, language proficiency proof in the form of a valid language test (e.g., IELTS) with a CLB 5 in each of the 4 components should be submitted. But it is to be kept in mind that there are no set language requirements and suitability is decided on case by case basis by officers.
Once your WP is approved, it will be valid for the time that your Owner Operator LMIA is approved for. Typically, your LMIA and WP will be good for a period of up to 2 years, although some WPs are limited for a shorter time period at the discretion of IRCC. You can start working for your business.
Step 4: Apply for Permanent Residence of Canada
Your pathway to PR would depend upon your individual profile and situation:
Through Express Entry system under Federal Skilled Worker Program (FSWP)
This could be the pathway to PR for you if you are already eligible for FSWP or become eligible for FSWP with 15
additional points in FSWP score for arranged employment. In addition to 15 points for FSWP, you will get 200
points for arranged employment in your Comprehensive Ranking System (CRS) score of Express Entry. With 200
additional CRS points you are likely to get an Invitation to Apply (ITA) for PR quickly.
You will get 15 additional points for FSWP and 200 additional CRS points for arranged employment if:
- you are currently working in Canada in NOC 00 job on a WP that was issued based on an LMIA
- you are working for an employer listed on your WP
- you are authorized to work in Canada on the day you apply for a PR visa, and when the visa is issued
- your current employer made you an offer to give you a full-time job for at least one year if you’re accepted as a PR
To meet the above requirements, get a new job offer from your business once you are in Canada and are working
for your own business. You can’t use the same job offer letter that you used to get your Owner-Operator LMIA
Note: Your CRS score will get a 200 points boost if your occupation on the WP is restricted to NOC 00 (based on LMIA application by your business). If on the other hand, your occupation on the WP is restricted to NOC 0, A, or B (based on LMIA application by your business), your CRS score will only get a 50 point boost.
Through your Spouse or Common-law Partner
This could be the pathway to PR for you if you are not eligible for FSWP because you do not meet the minimum
requirements for language proficiency, education, or work experience.
Different situations under which your spouse or common-law partner could become the principal applicant for PR (you and dependent children would be part of his/her application) are:
- Your spouse or common-law partner is already eligible for FSWP or can become eligible for FSWP with 15 additional points for arranged employment: He/she arrives in Canada on Open Work Permit and immediately starts looking for LMIA based job offers. If he/she gets such a job offer, he/she can get 50 additional points for arranged employment in his/her Comprehensive Ranking System (CRS) score of Express Entry. This boost of 50 CRS points may be the difference between him/her remaining in the Express Entry pool of candidates without any likelihood of getting an ITA or actually being invited to apply for PR.
- Your spouse or common-law partner is already eligible for FSWP or can become eligible for FSWP with 15 additional points for arranged employment but a boost of 50 CRS points for arranged employment is insufficient to get an ITA: He/she arrives in Canada on Open Work Permit and starts working in NOC 0, A, or B job. After gaining at least one year of eligible Canadian work experience, he/she will gain additional points in his/her CRS score due this work experience. In addition, he/she can further boost his/her CRS score by 50 points for arranged employment by getting a LMIA based job offer from any employer or by getting a valid job offer from the employer for whom he/she is working. These additional CRS points gained due to Canadian Work Experience and arranged employment may be the difference between him/her remaining in the Express Entry pool of candidates without any likelihood of getting an ITA or actually being invited to apply for PR.
- Your spouse or common-law partner is not eligible for FSWP because he/she does not meet the minimum requirements for language proficiency, education, or work experience: He/she arrives in Canada on Open Work Permit and starts working in NOC 0, A, or B job. After gaining at least one year of eligible Canadian work experience, he/she may become eligible for Express Entry under Canadian Experience Class (CEC). In addition, he/she will gain additional points in his/her CRS score due this work experience. He/she can further boost his/her CRS score by 50 points for arranged employment by getting a LMIA based job offer from any employer or by getting a valid job offer from the employer for whom he/she is working. Qualifying for CEC, CRS points gained due to Canadian Work Experience and arranged employment may be the difference between him/her remaining in the Express Entry pool of candidates without any likelihood of getting an ITA or actually being invited to apply for PR.
- Your spouse or common-law partner is not eligible for FSWP because he/she does not meet the minimum requirements for language proficiency, education, or work experience for this program and is not eligible for CEC because he/she does not meet the language proficiency required for this program or despite being eligible for CEC, does not have enough CRS score to get an ITA: After gaining at least one year of eligible Canadian work experience, he/she can be eligible to apply for PR through a Provincial Nominee Program (PNP) of the province he/she is living and working in.
Get in Touch for more information or for assistance in applying for Owner-Operator LMIA and Work Permit (WP) or for creating Express Entry profile or for applying for Permanent Residence (PR) after receiving Invitation to Apply (ITA) through Express Entry system or for applying for Provincial Nominee Program (PNP).