An Overall Guide to Regulation of Foreign Investment Policy in Canada

The federal Investment Canada Act or the ICA regulates foreign investments in Canada. The overall objective of ICA is to encourage international investors in Canada on the terms and conditions that are beneficial to Canada. The ICA runs under the administration of Canadian Innovation, Science and Economic Development. But the ICA is administered by the Act of Department of Canadian Heritage. If you are an existing investor or intend to do an investment in Canada, you are subject to notification or review. The notification involves filling specific prescribed format with details of certain information about your foreign investment, Canadian business and your vendor. You can submit the form within 30 days of closing and usually submitted after closing. Contact Get in Canada for all types of assistance of investment and immigration in Canada.

The foreign investor must submit more details about the investment particularly of the comprehensive plan of business investment in Canada if the review is required. When the minister of Innovation, Science and Economic Development or the minister of Heritage and Multiculturalism determine the business plan to be a net benefit to Canada, the investor may only complete the format.

The notification whether is reviewable or mere notifiable are determined by a few factors. They are the factors of the enterprise value of the Canadian business value, whether the investor’s country comes under a Canadian trade agreement or not, whether the investor’s country coming under WTO agreement, whether the investor comes under SOE or State-Owned enterprise etc. A Canadian business defines the business as if the business is carried out at a place in Canada, if one or more Canadians are engaged in the business, and if assets of Canada is used in the business.

The foreign investor means a person other than a Canadian who is carrying out  business in Canada. In the case of acquisition of a Canadian business by the non-Canadian investor, the ICA has detailed provisions, rules and regulations. The majority voting share acquisition is deemed to be an acquisition of control.

In addition to the notification reviews, the government of Canada has discretionary powers to order review in certain situations like, the government can review in the case the business is felt injurious to national security, if the government feels that the investor is an SEO and holds an acquisition of control, and or can review in the case of cultural business.

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