How business immigration to Canada allows you to get finances from the state
How to move to Canada and get governmental support? If you want to start or expand your business, enter new markets and optimize business, you should learn about the conditions for financing a business by the country’s administration. Learn more about help with business immigration to Canada in this article.
From this article, you will learn how to attract business investment with the help of the federal government of Canada. To your attention there are governmental programs: who can participate, what the rules and restrictions are, what the amount of payments is and much more.
In Canada, there is a truly incredible number of diverse areas that receive government support for business. The administration of Canada provides assistance in the following areas:
loans and term loans
payment of salaries
assistance to self-employed persons
assistance to landlords / tenants
write-off / withdrawal of expenses for taxes and payments
crisis management counseling
assistance in overcoming the COVID-19 epidemic
partnership and collaboration
On our site you can find a whole series of articles dedicated to the provision of services in these areas. In each of them, we describe the most important programs and threads.
This publication contains data that are current at the time of writing. Updates to the programs appear daily. To clarify the details, we recommend contacting our experts.
How does the government help business in Canada financially?
Loan guarantee for small and medium-sized businesses
Medium and small business in Canada are actively supported with loans. Companies can count on an operating loan or term loan of up to $6.25 million.
EDC (Export Development Canada) guarantees up to 80% of this amount.
This agency has partnered with financial institutions throughout Canada. Thanks to this cooperation, entrepreneurs have a guarantee called the BCAP Guarantee.
The BCAP Guarantee (Business Credit Availability Program Guarantee) is a program through which you can get credit. Within its framework, medium and small business in Canada receive funds directly from their financial institutions [like banks].
The program helps businesses in any direction and in any part of Canada. Funds are issued to cover daily expenses. For example, the purchase of raw materials, payments to suppliers, the purchase of the necessary equipment, the provision of personal protective equipment to employees, payments to employees, etc.
Help in paying salaries
By the way, another program, Canada Emergency Wage Subsidy (CEWS), can help employees with wages. It subsidizes the payment of wages to employees. The subsidy is mainly aimed at restoring jobs for those employees who lost them as a result of the COVID-19 epidemic.
The amount of the subsidy depends on how much your company’s profit has fallen. However, those employees who have suffered the most can count on the most significant assistance.
There are quite a few similar programs. You can receive funds from many of them at once. At the same time, with the help of programs, you can cover up to 75% of the cost of paying salaries.
How about getting up to $10 million for development of business in Canada?
This is possible thanks to the Export Guarantee Program. It helps to receive funds for export development directly from financial institutions. The agency overseeing the program provides a money-back guarantee for the funds you borrow. Thus, the agency and your financial institution share the risks together.
What types of costs can be covered:
expansion of the production line
entering new markets
moving production closer to the client
opening a foreign representative office
Interestingly, businesses in Canada receive even very specific export assistance.
For example, one of the government programs allows to cover up to 80% of the costs associated with short-term projects aimed at the development and implementation of electronic tools that help to deliver products and services to foreign markets more efficiently. The program allows you to irrevocably receive up to $ 18,462.
If you want to receive assistance on several E for E programs at once (digitalization programs for export), then in total you can count on covering up to 90% of the amount you need.
To get help, you must:
develop a detailed phased export marketing plan for at least 1 year
ensure the profitability of the company 1 year before applying for funds
What types of business in Canada cannot receive such support:
retail or wholesales
harvesting of sawn softwood
provision of qualified services to individuals
Investing in intellectual property
Do you own intellectual property and want to get investments for your business in Canada?
Growing companies can count on business investment thanks to the active support of the government agency BDC. It implements the Intellectual Property-Backed Financing program (funding provided by intellectual property).
BDC employees pay particular attention to intellectual property assets. The program takes into account not only the economic parameters of your business, but also the potential of intellectual property, its presentation and the strategy associated with it.
Agency experts conduct expertise and provide assistance to companies that have:
a registered portfolio of intellectual property (under development or already completed)
a commercial offer that allows you to get at least $ 1million in profit received in the last 12 months
ambition and plan to be a global player
The total fund for business investment is $160 million. This substantial amount allows the government of Canada to provide assistance to a really large number of scalable companies in knowledge-intensive industries.
The program is aimed at companies that have monetized their intellectual property portfolios through product commercialization or licensing agreements, or both.
According to statistics, enterprises with intellectual property have:
Our experts recommend for companies concerned with questions of intellectual property:
assess which assets should be protected and how best to do it
it is obligatory to develop a holistic strategy for integrating intellectual property into the business plan. This strategy will help maximize the value of your work and protect your competitive advantage
benefit from the help of BDC and its partner organization CIPO (Canadian Intellectual Property Office). Our experts will help you enlist the support of these organizations
Major business investment in technological innovation
You can get money in the form of a non-returnable investment to introduce innovative or improved technologies through the NRC (National Research Council).
Amount is up to $10 million! The program can cover up to 75% of all necessary expenses.
The program was created for medium and small business in Canada with the aim of promoting continuous technological progress in the country.
Under the terms of the program, you can receive business investments for research and development of projects at any stage of the innovation cycle.
Companies that have shown rapid growth in the last year before applying are most likely to receive assistance.
It is assumed that the receipt of funds should significantly enhance the development of companies in the next 5 years after payment. Analytical calculations show that such a proportion, among other things, allows to constantly strengthen the economy of Canada, keeping it in the leading world positions.
The NRC may invite you for a personal interview before making the final decision on admitting you to the program. What questions you can expect in an interview:
details of your business strategy
technical aspects of the project
your financial resources
specific benefits for Canada
It should be noted that the Government of Canada actively advises citizens on how to do business. For example, if you require technical or financial advice, specially trained experts can come to your aid. The range of issues covered is really wide: from planning to commercialization, from technical optimization to marketing issues.
Most often, such consultations are in the following industries:
R&D tax credits
Speaking of innovation in scientific and technological development, it is interesting to mention the Scientific Research and Experimental Development Program (SR&ED) tax credit program.
The program allows you to receive a tax credit of 15% or a returnable credit of 35% on the first $3 million of eligible expenses. This opportunity is provided to small private corporations.
To participate in the program, your project must:
relate to some scientific or technological uncertainty
include the formulation of hypotheses specifically aimed at reducing or eliminating such uncertainty
apply a general systematic research approach (for example, hypothesis testing by experiment or analysis)
have the goal of achieving scientific or technological progress
be carefully recorded and keep records of hypotheses tested and results achieved
The program uses tax incentives to encourage businesses of all sizes and across all sectors to conduct research and development in Canada. These tax credits are of three types:
income tax withholding
investment tax credit (ITC)
refund (under certain circumstances)
The SR&ED program provides more than $3 billion in tax credits annually to cover needs of 20,000 applicants. This makes it the single largest federal program supporting business research and development in Canada. The program is administered by the Canadian Revenue Agency (CRA).
Corporations, individuals, trusts and partnership members can use these benefits from the Government of Canada.
SR&ED tax credits have two main advantages:
A business in Canada can pool their SR&ED expenses and deduct them from current income or deduct them in the coming year.
You can also get an SR&ED Investment Tax Credit (ITC) and use it to reduce the income tax payable. In some cases, the CRA may return the remaining ITC.
Whatever SR&ED work you do, your ITC will be at least 15% and can be up to 35% of your SR&ED costs.
If you decide to move to Canada and at the same time open a business in Canada, you should consider in advance the possibility of obtaining a business investment. Our experts will help you to assess possible prospects in a qualified manner.
Contact us now!