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Today we are covering the C10, C11, and C12 now known as C61,62, and C63 LMIA-exempt Federal work permits. We will cover the main differences between these 3 LMIA exempt work permit programs, when to use them, and in which types of scenarios.
For the purpose of making sure everyone is on the same page, the abbreviation LMIA is going to be repeatedly used in this article, stands for Labour Market Impact Assessment which is a very fancy word for ‘permission from the government to hire a foreigner instead of a Canadian’. All the categories here covered are LMIA-exempt work permit programs, meaning no Canadian employer is required to issue you a job offer, but rather you are offering yourself or maybe even your overseas staff an offer of employment based on an LMIA-exempt category.
These 3 main entrepreneurial Federal work permits do not include the following programs for entrepreneurs and business investors (so please do not mix them up):
* The provincial entrepreneur program that is managed by the provincial nominee offices. They are work permits to direct PR streams in each specific province.
* Startup Visa, which is another direct PR Federal program with an optional work permit.
* The Federal Self-Employed program which is a direct PR program for occupations specifically in art, culture, and sports. It has no work permit option.
Unless you are an applicant from a country that has a bilateral agreement with Canada where a reciprocal opportunity exists between residents of both countries, then the basis for these 3 main categories of LMIA-exempt entrepreneurial work permits are all based on the potential of the employment activities of the foreign national (applicant) to create or maintain significant social, cultural or economic benefits or opportunities for Canadian citizens, people registered as Indians under the Indian Act or permanent residents of Canada. As many of you know, this is as per the Immigration Regulations Section R205(a), which requires the applicant to create this benefit for Canada or prove that they truly intend to do so.
Here is a high-level overview of the main differences between these 3 types of entrepreneurial work permits with included example scenarios for each one. This will allow you to truly understand the differences and which one would apply to you or your client.
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Don’t make the mistake of using this category for the LMIA-exempt work permit to start or run an ongoing business in Canada. IRCC has specifically outlined that this category of work permit is only possible for applicants “who only seek entry for a temporary, usually seasonal, purpose to run their existing business (usually self-employed people).” This category of work permit is focused on the self-employed person which according to IRCC means: “A person who works for themselves as the owner of a business and rarely hires people outside of their family members. While many individuals are the owners of the business, they typically carry out all the responsibilities of an employee.”
The C11, as mentioned earlier, is based on the Immigration Regulations R205(a) which requires a foreign national to create or maintain significant benefits or opportunities for Canadians. The monetary value of the investment is not defined and is not the only factor that is considered. Based on the industry, the type of business, and the type of benefit; whether social, cultural, or economic – monetary investments will be based on a case-by-case basis.
Therefore, C11 is designed for seasonal and short-term businesses or activities such as the following scenarios:
* Running a food truck or some kind of seasonal stand or shop at an event.
* Running a type of short-term accommodation for a specific season or event. Maybe it’s just for the summer or winter, or it’s very event specific such as a competition or festival in Canada.
* Running a tourist destination service or guide service would be another example.
* Coming over for a season as a fishing guide in Canada or running a campsite.
* Another type of category where C11 can easily be used is if you are a self-employed person such as an author, musician, artist, or athlete. You’re coming to Canada for a short period of time to work on your project and leave after a specific time.
You as the applicant need to control more than 50% of the seasonal-short term business in Canada to qualify to apply under the C11 LMIA exempt work permit program – and in most cases you are going to be self-employed such as a sole proprietorship or have a registered provincial business with just yourself and maybe some seasonal staff.
What this C11 category is not meant for is to start a store, a long-term business to hire Canadians, or to help the applicant stay long-term inside Canada and renew their work permit. You could start a business in this category and have the plan to have Canadians continue it – without your presence which is also an option, but we haven’t seen many of these types of cases.
Remember that even for the C11 category work permit, significant benefits for Canada must be claimed in your application for the officer to be convinced and approve it.
This is not a direct PR stream, and we don’t recommend it for the purposes of trying to convert to PR or even attempting to.
Here is another example of how we use the C11 LMIA exempt work permit: if you have applied under the Federal Self-Employed program for your direct PR – which can take approx. 3 years post-pandemic timeline – during this timeline this could be one method of coming into Canada and starting your self-employed activities in eligible occupations such as arts, sports, or culture.
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If you are an individual investor, or business entrepreneur and do not want to apply for the Provincial Entrepreneur programs or the Startup Visa program, and you’re not from a country that has a bilateral agreement with Canada for mobility, then this would be one of the few programs that would fit your requirements. Just like the C11 LMIA exempt work permit, this program is also based on significant cultural, social, or economic benefits for Canada. You need to either create this benefit or maintain it. The word ‘maintain’ could mean that you are buying a business or establishment and potentially saving it from shutting down, saving Canadian jobs, or you are saving some key cultural or social landmark or facility.
With the C10 LMIA work permit you can establish a long-term business, although it is not originally meant for permanent immigration and has no direct PR options, it can be combined with other programs after the first-year renewal to try to apply for a PR program from inside Canada. The application is based on your own entrepreneurial or investor profile – not a company and it’s not 100% mandatory that you owned a company before applying, although it greatly increases your chances. You can buy or start a business and under this category as well you need to control more than 50% of the business in Canada to qualify to apply under the C10 LMIA exempt work permit program.
Creating or maintaining significant benefits or opportunities for Canadians is mandatory again under this LMIA-exempt work permit category as per the Immigration Regulations R205(a). This can be cultural, social, or economic. It can be a combination of these 3 factors as well, and can be creating a benefit, maintaining a benefit, or creating or maintaining opportunities for Canadian citizens, permanent residents and/or aboriginals.
There is no monetary value for these benefits. However, if you are focusing only on economic benefits, then the region/city you are establishing in, the industry, and other factors are considered. So, for example, an ice cream shop in the middle of a rural town can be $45,000 for a significant benefit, but a $250,000 convenience store in Vancouver or Toronto will have absolutely no significant benefit. You need to be creative in your business concepts to prove their significance for Canada. That’s the key.
Here is what is needed for your C10 LMIA exempt work permit application and how officers review it (i.e. the questions they ask when assessing your application):
* Is the work likely to create a viable business that will benefit Canadian or permanent resident workers or provide economic stimulus to the area?
* Does the applicant have the language abilities needed to operate the business?
* Does the applicant have a particular background or skills that will improve the viability of the business?
* Is there a business plan that clearly shows that the applicant has taken steps to initiate their business?
* Has the applicant taken some measures to put the business plan into action? Have they put the investment amount ‘at risk’ (evidence of having the financial ability to begin the business and pay expenditures, renting space, having a staffing plan, obtaining a business number, showing ownership documents or agreements, etc.)?
Under this category, we don’t recommend coming up with a plain vanilla business concept in the middle of the major cities in Canada. We’ve always given this example to our clients of what not to do or how to do it – and funny enough, the same example has been posted on the IRCC website at the end of last year. We’d like to think that IRCC was spying on our consultations, but the fact is that many grocery and convenience store LMIA-exempt work permits were refused last year in 2022 that had invested approx. $200,000, hired, and started operations in major metropolitan regions of Canada – hence the examples we use and IRCC has used on their website to talk about investment amounts and significant benefit. Opening a small grocery or convenience store in the middle of Toronto or Vancouver, that has no cultural or social appeal or benefit, and even hiring 3-5 staff is not going to be considered a significant benefit of any kind for this program – even with a $200,000 or $300,000 investment. However, if you set up a grocery store in the middle of some small town in rural parts of Canada and even hire 1 person, or sometimes not even hire anyone in the first year but have an operational business, this can be a significant benefit for under-serviced areas of the country and can be approved by a visa officer.
As we said before, you need to be creative in terms of pitching your business plan and intentions to the officer under these entrepreneurial LMIA-exempt work permits.
Here are 2 examples to get your creative juices flowing:
1: A bubble tea store in the middle of Vancouver with a $250,000 investment and plan to hire 3 people in the first year would most likely be refused if you are not from a visa exempt country with bilateral agreements in place.
However, if you pitch the same bubble tea idea but perhaps include a hospitality workshop/class in the back or above the store for existing Canadian students at colleges or schools where they are taught entrepreneurial and hospitality skills with supply chain on how to manage a business – this can have a much more positive effect on your approval for your LMIA exempt work permit.
2: A digital marketing agency set up in Toronto or Montreal. Most of the work is online, you’d invest $200,000 and hire 2-3 people in the first year. The chances of approval if you are not from a visa-exempt country are low in this case. How would you change this to make sure it proves a significant benefit? You could have a tie-up with a local college to have an ongoing pipeline of interns working here and allocate $50,000 for the first 2 years as a grant to local businesses to fund their digitalization projects through the support of paid interns and graduates from a local college with which you have signed an MoU – so the keys here were grants, internships, graduates which can combine education, work and support for local businesses. If you put this business in 1 neighborhood outside of the major city (maybe a 30-minute drive), then your chances of approval would be 10x more. Remember, nobody in these Federal programs is going to restrict you from living 1-2 hours from the official location of your business – unlike the provincial programs which are very restrictive.
When officers are reviewing the significant benefits of the proposed business, it is not necessarily the type of business (sole proprietorship, franchise, corporation, etc.) that makes it a significant benefit or even how much is spent on it. Instead, it is how it provides opportunities for Canadians or permanent residents or a benefit to a local or regional economy.
For example, a convenience store located on Yonge Street in Toronto that hires 2 extra people would not make any real difference to any local economy, and 2 extra jobs are not significant.
But if that same convenience store is established in a small rural area where the nearest grocery store is 20 kilometers away, then it may be a benefit as it would hire from a much smaller pool of local people where jobs may be scarce, and it could enhance the economies of other businesses around it by attracting people to the area.
Or to use a franchise example, is it the only Tim Hortons in the town and therefore attracting people into the town from a much broader area? Or is it 1 of many in a small radius in a city where the opening would not have a significant impact?
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Last but not least is the Intra-Company Transfer program. This is probably the most popular program out there for LMIA-exempt work permits for entrepreneurs and key staff/executives.
This LMIA-exempt category is for qualifying businesses inside or outside Canada that want to transfer key staff to their entity in Canada. And if you don’t have an entity yet inside Canada, this category could be interesting for you which may allow you to come over to set up your branch here as a key staff or executive of the overseas business.
This LMIA exemption code was previously known as C12, unless you are from a country that has bilateral agreements in place with Canada - in which the country-specific code will be used for the Intra-Company Transfer.
The code has now been changed from C12 to C61/C62/C63 – depending on whether you fall into these 3 categories under the ICT program:
* Employees starting a branch or affiliate entity in Canada: C61
* Specialized Knowledge staff: C63
* Executives, Senior Managers, or Functional Managers: C62
IRCC has changed these codes for 2 main reasons:
1: Keeping more detailed statistics on the type of ICT applications which it processes – between these 3 categories.
2: Becoming stricter in processing and approving entrepreneurs who are setting up new branches in Canada as a means for immigration – hence identifying them as C61. This allows IRCC to keep a lower approval rate for this category while they support existing operational Canadian companies in the medium to larger size who are always moving their key executives and specialized knowledge staff from their overseas offices – using codes C62 and C63.
In a nutshell, under the Intra-Company Transfer program, the main qualifier is the company – and not the individual making the work permit application. If a company inside Canada and outside Canada have the same ownership structure – it is allowed to transfer staff from the overseas entity to Canada. This is utilized regularly by mid to larger-sized firms with overseas offices to bring over key staff. For entrepreneurs, this program is being used to set up a branch of their operations in Canada – if they have a qualifying business.
In order to qualify as an overseas business to set up a branch, subsidiary, or affiliate inside Canada, and use it to apply for an LMIA-exempt work permit, the key would be the financial strength of your business overseas. If you only have 2-3 staff and $100,000 of revenues overseas – then forget it unless you are from a visa-exempt country with a bilateral agreement. Your business needs to meet the following requirements overseas to qualify and have a higher approval chance of ICT approval:
* Financial strength showing assets and/or retained earnings that justify the capacity and logic to invest in a branch/company in Canada.
* The source of funds for the investment must be coming from the company overseas– not an individual.
* The overseas company must have enough staff to include managers and executives who will run the business while you as the applicant will come over to Canada to start or run the new branch or affiliate.
* The overseas company must continue to be operational during the entire time that you have a work permit under ICT inside Canada.
* The ownership & control structure of the overseas business must be the same as the entity/branch/subsidiary inside Canada. So even if it’s not exactly the same shareholders, the controlling ownership has to be exactly under the same group of shareholders both in Canada and overseas.
* The applicant who may be a key executive, shareholder or other member of the company must have been operationally working for the overseas entity for at least 12 months in the past 3 years – this usually includes proof of payment from the company to the applicant such as payroll, dividends, bonuses, etc.
In these situations, we do not recommend you to apply under ICT: you run a small grocery or convenience store, or coffee shop overseas. Your existing business revenues are low or yearly profits are less than $150,000. You have only 1-5 staff in your overseas entity. These are scenarios that are red flags and will lead to refusal.
There are no industry-specific restrictions, but only the quality of the application matters. Again, the company is the main qualifier here, not the individual applicant. This is a temporary immigration program for work permits, which does not lead to PR, but of course, can be combined with Provincial Entrepreneur or skilled immigration programs or even Express Entry to convert to PR.
Significant benefit is a key factor not to be forgotten for the ICT program as well, unless you are from a country with bilateral agreements in place for mobility programs with Canada. Under R205(a) you need to create or maintain social, cultural, or economic benefits or opportunities for Canadians in Canada. This of course can be a combination and many ICT cases focus on economic activity such as investments and hiring Canadians. In 2023 and onwards, ICT applications from non-Visa-exempt countries will be scrutinized in more detail and your significant benefit should be seriously significant. You won’t be able to get away with minimal investments or plain vanilla business concepts anymore, unless you have an operational business already inside Canada.
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We’ve made a comparison table for these 3 programs which you can refer to for more clarity.
We hope this live article has provided you with some clarity on the differences between these LMIA exempt entrepreneurial work permit programs and in what cases they should and should not be used. Again, if you are an immigration practitioner and need assistance processing your client’s LMIA or LMIA-exempt work permits – feel free to reach out to us. If you’re an individual, family, or business looking to set up in Canada – you can also reach out to our office.
Comparison Table between Intra-Company Transfer (C61,C62,C63) v. C10 v. C11
|
ICT |
C10 |
C11 |
|
|
Eligibility is mainly based on the individual or company |
Overseas company (head office) |
Applicant as an individual entrepreneur |
Applicant as an individual self-employed |
|
Investment funds should be sourced from company vs. individual |
Company only |
Individual |
Individual |
|
Duration of the business |
Long-term business establishment |
Long-term business establishment |
Short term / seasonal |
|
Requires a company overseas to qualify under this program |
Yes |
No |
No |
|
Significant Benefit for Canada mandatory |
Yes (Exception: unless from a bilateral agreement country – ***see note below table) |
Yes |
Yes |
|
Renewal duration options of work permit |
Renewal options up to 7 years |
1 year or shorter – with limited options for continued renewal |
|
|
Available across all regions and provinces of Canada |
Yes |
Yes |
Yes |
|
Direct PR option |
No |
No |
No |
|
Previous business ownership experience mandatory |
Not necessarily – as the overseas qualifying business can transfer over non-Shareholding executives or key staff |
Not mandatory - but can help convince officer |
Not mandatory - but can help convince officer |
|
Can include multiple applicants |
Key or executive staff from overseas office can be transferred over after 1st year of operations and keeping ratio of Canadian staff higher than foreign workers |
Yes |
No (unless exceptional circumstances) |
***These countries have bilateral agreements with Canada which exempts them from significant benefit qualifying factors to apply and be approved for the work permit under Intra-Company Transfer program and other types of LMIA exempt work permits not covered in this article: South Korea, USA, Europe, United Kingdom, Mexico, Colombia, Chile, Peru, Malaysia, Australia, Japan, New Zealand
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