This is the project of many entrepreneurs: to acquire an existing business and move to Canada. In order for the project to turn into a success, there are several questions to ask and many things to know.
“You have to be realistic,” explains Éric Gerbier, Executive Vice-President, Business Class Canada France. To lay the foundations for an effective immigration strategy, it is essential to understand the objectives and to qualify the project. “
The specialist in supporting entrepreneurs and businesses wishing to emigrate offers two models to new or future immigrants to Canada who decide to invest in a business: a franchise or an acquisition.
Franchising: a reassuring opportunity
“With the franchise model, says Mr. Gerbier, everything is simpler. The environment is supervised, the budget is easy to establish, the franchisor supports the franchisee. In short, it allows you to enter a new market that you do not know in a smoother way. “
Canada has no shortage of franchises in many areas.
While embarking on a business venture involves risks and uncertainties, franchising may be a temporary, if not sustainable, alternative for some.
Taking over a business: a professional and human adventure
“Many applicants for immigration to Canada come to see us with the plan to buy an SME or a VSE,” says Éric Gerbier. It also happens that a foreign company decides to make an acquisition in Canada to penetrate the North American market. “
Three types of buyers
Ø Entrepreneurs with solid experience in a specific business sector looking for a project in their field.
Ø An investor or a company whose target to buy has already been defined.
Ø Professionals with a rich background in search of new opportunities and new horizons.
The choice of a company to buy can also be influenced by the region of establishment, the competitive environment in the market, the social context, … Each story of entrepreneurs is different.
Steps to Acquiring a Business in Canada
Step 1: the confidentiality agreement
Upon signing of the confidentiality agreement, the future acquirer can receive financial statements, start an audit, analyze business opportunities.
Ø The useful network: business lawyers, accountants, tax specialists, immigration lawyers, bankers …
Step 2: the letter of intent
After the initial audit, a letter of intent is presented that includes a buyback price proposal and a detailed plan for next steps, the most important of which is due diligence on the information provided during the audit. When the conditions are met, we will move on to the next step.
Ø The prerequisites: obtaining the visa, financing, guarantees from the bank in the country of origin as tangible proof that the down payment is available.
3rd step: acquisition
Once all the conditions are met, normally due diligence and funding being the most important, and in the case of an immigrant buyer, it can also be getting status.
Ø This is the occasion for the first contacts between the purchaser and the team in place.
4th step: knowledge transfer
To make the transfer sustainable, the transferee meets with company staff. A support phase begins, whether in the transmission of files, the understanding of processes, HR development or recruitment abroad.
The entrepreneurial adventure in Canada can begin!
A favorable context for the acquisition of a business
“Currently, rejoices Mr. Gerbier, we are in a seller’s market. The parameters in Quebec are favorable to the purchase of a company by an entrepreneur from abroad. There are many good deals with stable activities and good turnover. We must therefore react quickly. “
Ø With the ageing of the population, more and more entrepreneurs are retiring.
Ø The local succession is not always there
Ø Corporate taxation is advantageous for Europeans
Ø The pandemic has played a role in the opportunities, but also in the demands
Ø Certain sectors are experiencing strong growth: IT, health, finance, energy, industry.
“There are many good deals with stable activities and good turnover,” concludes Éric Gerbier. But you have to react quickly to seize them. “
Canadian immigration programs for foreign entrepreneurs
Component two of the Canada Entrepreneur Program makes it possible to enhance the acquisition of a business by foreign investors who wish to establish themselves over the long term in the country. Indeed, it allows them to obtain permanent residence, in connection with their business acquisition.
It is currently closed in order to refine it and simplify its mechanisms. The old version provided for an investment of CAN $ 300,000 as well as a minimum value of CAN $ 900,000. It is expected to reopen by the end of 2021.
Before the new conditions are defined, it is possible to prepare the procurement process upstream in order to be ready to apply when the program is operational again.
Members of the European Union who do not wish to settle in Canada for the long term also have the option of acquiring a temporary work permit, which allows them to invest in a Canadian business.