Owner Operator LMIA – Is it an Ideal and inexpensive mechanism for Business Immigration?

UPDATE: Please note that this stream has been discontinued by Employment and Social Development Canada. The Owner/Operator category has been removed from the Temporary Foreign Worker Program (TFWP) as of April 1, 2021.

The topic of today’s discussion will be the Owner Operator LMIA which allows foreign nationals who own at least 50.1% of the controlling shares of a company to apply for a Labour Market Impact Assessment (LMIA).

This type of application is exempted from the advertisement requirements that apply to regular LMIA applications.

Business Owners and Entrepreneurs who wish to run a business and Immigrate to Canada will usually require a Job Offer unless an exemption applies to their case.

A Job Offer can be obtained by way of a Labour Market Impact Assessment or through one of the exemption codes under the International Mobility Program.

A Labour Market Impact Assessment is a document that authorizes the Employer to hire a foreign worker seeing that the Employer was unable to hire Canadians. In some cases, employers are exempted from applying for an LMIA in light of International Agreements with other countries, the particular circumstances of the Employer or Employee, or due to time constraints.

Eligibility for the Owner Operator LMIA

In order to be eligible for the Owner/Operator LMIA, an owner of a business in Canada needs to have at least 50.1 % of the controlling shares of the company. The owner must also be involved in the day-to-day operation of the business and have an employment relationship with it. This stream is therefore not meant for silent partners or passive investors.

The Owner-Operator LMIA requires the employer to have been “actively engaged” in the business prior to submitting an application to Employment and Social Development Canada (ESDC). This requirement should not be deemed too onerous for those seeking to purchase an existing Canadian business. This can be demonstrated through preparatory activities or in taking the necessary steps to have the business up and running. This could include a strong and well-thought-out business plan, opening a bank account, incorporating and getting the required documentation from the Canada Revenue Agency as well as any required license and/or registration documentation from the government, hiring staff, and signing a lease agreement.

The advantage of this pathway is that the positive LMIA can be used for both temporary purposes as well as for permanent residence under the Express Entry Program provided that the person applying is eligible.

This program also allows for family members of the person immigrating to Canada to accompany them to Canada.

Lastly, there isn’t a minimum capital requirement set out by law.

The capital or money required will vary case by case and will depend on the business’s cash flow which is usually outlined in the business plan. Therefore it can be deemed an inexpensive solution if compared to other Immigration options for Canada such as the Provincial Nominee Programs which have some capital and asset requirement.

Owners might be eligible for expedited service of their application if the position requested has a prevailing wage that is equal or above the top 10% of wages earned by Canadians or permanent residents in the province/territory where the owner will be working.

With a positive LMIA, applicants can use it to apply for a work permit as a skilled worker with Immigration, Refugees, and Citizenship Canada. The documentation required for a work permit varies depending from where a person applies for a work permit. Processing time also varies. We discuss this more here.

Conclusion

The Owner-Operator LMIA can be an ideal and cost-effective solution depending on the particular circumstances of the potential applicant.

Helping Entrepreneurs and business owners see their ideas come to fruition is one of the most rewarding parts of our job but it can have its own financial challenges if it is not carefully planned. Therefore it is important for individuals contemplating this pathway to be directly involved in every step of the way in order to ensure the viability of their business long after their immigration matters are finalized.

Having a knowledgeable and competent lawyer can also help!

Please note that this is general information and should not be construed as legal advice.