Buying a business in Canada

Today, one of the ways to get a Canadian work visa and then get a permanent residence in this country is to buy a business or start a business in this country. In fact, with this method of investing in Canada, you can immigrate to Canada and have your business in this country forever. The desired business can be a company or a business such as a shop or restaurant. The business premises may be owned by the business owner or rented.

However, under certain circumstances, you may be eligible to buy a Canadian business. The first step in this way is to find an active and suitable business opportunity. You are probably asking how? Stay with us in the rest of this article to get all the necessary information to buy a suitable business in Canada.

Buying ready business in Canada

When you want to become a business owner in Canada, you have two options. Either buy an existing active business or start a new business. The option you choose has different tax consequences and will affect the amount of tax on the income of that business’s assets.

There are two ways to buy an active business in Canada. Either you pay a certain amount for the whole business, or you buy a part of its shares, which must be more than 51%. Since a corporation is a separate legal entity and can hold property in its name, a change in ownership of the corporation’s shares will not affect the tax value of the corporation’s assets.

What are the conditions for buying a business in Canada?

Having the experience of managing or owning a business in your country for at least three years (ownership means owning all or at least 10% of the company’s shares)
Having enough assets and capital to buy a business in Canada
Purchase all or at least 51% of the shares of the business in Canada
Having an educational qualification at the level of a diploma or higher
Having basic English skills (providing a language certificate is not required)

Ways to find and buy a business in Canada

You definitely want to know how to find a business in Canada and then buy it. The fact is that buying a business in Canada is not an easy task, and if you are doing this for the first time, be sure to find and then buy the right business in Canada through one or more of the following methods:

Business investment magazines and newsletters are often found in highly populated areas. For example, in southern Ontario, there are a number of free publications such as Business Exchange that are available on newsstands throughout the Greater Toronto Area (GTA).
There are some specialized trade publications that are relevant to the industry you want to work in; So they are also another useful resource, because most of the related businesses for sale are classified in this section. You can find a list of many Canadian business journals online at the Canadian Business Press website.
Newspapers also have classified sections where you can find local business listings. Look for genuine, local businesses, but be wary of dubious business opportunities.
The Internet accelerates the speed of business, making it much easier for businesses around the world to communicate. You can find the business you want through business sales sites.
Word-of-mouth communication can be a great way to learn and gain awareness about a business that the owner intends to sell but may not be listed in the business for sale listings. Networking and career events can provide you access to these information channels, for example you can contact your banker, lawyer or accountant and find out about such opportunities.
Brokers and intermediaries receive a commission when they help a seller complete a transaction. A good broker is a great resource; But a half-time, semi-professional recruiter is unlikely to be of much help in your job search. The best way to find a broker is to reach out to your network and ask about trusted people you can refer to.

Brokers and intermediaries can help you with:

Screening your proposed businesses: Good brokers will turn down many businesses they are asked to sell; Because the seller does not provide secrets and complete financial information, or because the business is too expensive. So acting through a broker helps you avoid these bad risks.
Helping you identify your interests: A good broker will start by learning about your skills and interests and then help you choose the right business. With the help of a business broker, you may discover that an industry you’ve never considered is perfect for you.
Negotiation: The negotiation process is an important part in which brokers play their role. They help both parties stay focused on the end goal and remain calm about any problems that may arise.
Help with paperwork: Brokers are aware of the latest rules and regulations that affect everything from getting a license to investing and securing deposits. They are also the most efficient mitigation methods

They know the additional formalities that can reduce the length of the purchase process by several months. Overall, working with an intermediary reduces the risk of some mistakes.

Sites related to business sales in Canada

There are a number of reputable sites in Canada that you can visit and select your desired city or province to see businesses for sale:

Business Exchange
Business for Sale
Business Sell Canada
BuyAndSellBusiness.com
Canadian Realtor

Two recommendations for buyers and sellers

1. Business buyers should be careful because there are many business opportunities listed for sale whose terms are misleading or exaggerated. If a job opportunity looks too good and attractive, it is better to proceed with caution. Remember, if it was easy to get rich or make $4,000 a week working from home, then everyone would be looking to invest in such opportunities.
2. As a seller, before you take your business to the public market, you may want to discuss the matter with those around you first. You may already have an employee who knows how to run your business and is interested in buying it. Customers or suppliers who have shown interest in your work in the past are also ideal candidates for you.

Important things that you should pay attention to before buying a business

Below is a list of things that you must evaluate before deciding to buy a business in Canada so that you don’t get exposed to scammers and wrong businesses:

1. Inventory

This listing includes all products and materials available for resale or use in customer service. Importantly, you or your qualified representative must be present during the inventory review process. You need to know the inventory status, what is currently available, and what the inventory was like at the end of the last fiscal year and the year before that. You should also evaluate the inventory.

2. Furniture, tools, equipment and buildings
3. Copies of all contracts and legal documents
4. Establishment and integration
5. Tax revenues for the last three years
6. Financial statements for the last three years
7. Sales records
8. Complete list of debts
9. All accounts receivable
10. All accounts payable
11. Debt declaration
12. return of goods
13. Customer patterns
14. Marketing Strategies
15. Advertising costs
16. Check prices
17. History of the industry and its market
18. Location and location
19. Business reputation and credit
20. Vendor and customer relationships
21. High salaries
22. List of current employees and organizational chart
23. CCOHS requirements
24. Insurance
25. Product liability

Steps to immigrate to Canada through the purchase of a business

1. Find the business you want

Look for a business that matches your skills, work experience and capital.

2. Hire a broker or business intermediary
3. Prepare your business plan
4. Negotiate the purchase of the desired business and finally buy it
5. Apply for an LMIA permit
6. Apply for a temporary work visa

5 mistakes to avoid when buying a business in Canada

Not thoroughly checking the records of the business in question

Due diligence is the process of checking the legal, financial and commercial records of the business you intend to buy. Check that the company or business in question has no back taxes, poor turnover, and no significant lawsuits against it. This thorough review will also help you determine the right price to buy.

Shopping with the wrong goals

Make sure that the desired business is compatible with your current goals and strategic plans and that you have the skills and knowledge necessary to successfully implement it.

Ignoring the target business culture

Business culture means how employees work and is actually an expression of a company’s goals and values. Examine the management style, employee behavior, business processes, and compensation structures at the business in question. If you find significant differences, think about whether buying this business is worth the effort to fill these gaps.

Not thinking enough about the goals and plans after the business purchase

Since the uncertainty and lack of transparency of goals and work plans can affect the level of enthusiasm, self-confidence and discipline and lead to the departure of employees from the company or the loss of customers, share your plans with shareholders and stakeholders quickly and honestly. share Be clear about what is going to stay the same and what may change in the future.

Acting late to receive financial support from banks

If you need financial support and financing from Canadian banks to buy your business, talk to your financing partner or sponsor before you negotiate the amount with the seller. They can help you figure out how much you can afford to borrow so you can enter into a more informed negotiation with the seller.

If you do this late, your transaction will be at risk because after the seller determines the amount of the business sale, the bank may not provide the amount you need or provide it with conditions that are possible to meet.

Do not reject them.

Advantages of buying a business in Canada

The necessary permits for the business have already been obtained.
It has the necessary reputation and credibility.
It has previous customers and does not need initial advertising to attract customers.
It has sales and profits and there is no need to start from scratch.
It is not necessary to have a language certificate to get a work visa.
It is possible to get accompanying work visa for spouse and free education of children in school.
It is possible to obtain permanent residence in Canada through it.

Disadvantages of buying a business in Canada

It is hardly possible to do due diligence on the records of the business in question. Because you are not located in Canada yourself, your business broker may not provide correct and accurate information about the records of the company or business you intend to buy.
It is difficult to reconcile company documents and verify their accuracy. The seller may show you financial and legal documents that appear to be correct, but inside, the documents are fake or some of them have been changed.
The seller may sell you the existing business for much more than it is worth.
Applying new procedures and changes may be accompanied by conflicting and opposing views.
Failure to choose the right business that fits your skills, experiences and business goals will lead to a waste of your capital and time.

The cost of buying a business in Canada

The price of buying a business in Canada depends on the nature of the business, its physical location, how big or small it is, how profitable it is, the number of employees and other factors. In general, the minimum capital to buy a business in Canada should not be less than 250 thousand dollars.

When you buy a business, you usually pay a certain amount for the whole thing. But in some sales contracts, an amount for each of the company’s assets such as computers, furniture and furniture, an amount for the company’s inventory such as raw materials, goods that are in the production process, and if possible, an amount for goodwill. ) is written separately.

If the price of each of the company’s assets is not specified separately in the contract and a total amount is written, then you must calculate the price of each asset and inventory according to the fair market value. The sum of these amounts must match the amount specified by the seller.

For example, you buy a business for $480,000. The fair market value of the company’s assets and net assets is as follows:

Accounts Receivable: $80,000
Balance: $40,000
Land: $120,000
Building: $200,000

Total net assets: $440,000

The cost of goodwill is obtained by subtracting the selling price from the net asset value:

Sale price: $480,000
–

Total net assets: $440,000

Goodwill price: $40,000

What to do after buying a business in Canada?

If you have bought part of the shares of a company and you intend to merge your previous business with the new business:

1. Form a team of new members and old members.

One of the first things you should do after buying a business is to form a core team of executives from both the new company and the old company (in your country) to lead and manage the merger process.

2. Create a targeted operating model.

Design a model for what needs to be integrated and how to do it, and evaluate its performance.

3. Share your model and plan with the main stakeholders.

Quickly design your new organizational structure and communicate it to key members of the company. This will keep key team members and reduce employee stress.

4. Introduce yourself to customers and suppliers.

Work hard to protect your relationship with the company’s key customers. If you are planning on making changes, call or visit them as soon as possible.

5. Focus on your strategy for your business.

If that business has been managed in a certain way for years, it necessarily means that you should continue the same way. Think about how you want to promote the new business? How do you want to apply the changes you want in the structure of the organization? Will the different parts of the company remain the same?

6. Make it possible for employees to talk and ask for opinions.

Acquiring a new business and merging it with an existing business is a complex exercise in change management. Don’t be surprised if people still have questions or resist change after a few months. The best way to gain their trust is to communicate with them often and be transparent and available.

Is buying any business suitable for obtaining permanent residence in Canada?

The answer to this question is negative. Buying any kind of business in Canada does not lead to permanent residence in Canada. For this purpose, the business you buy must have the following conditions:

Buy a business that is in important economic industries or key sectors.

Industries and sectors such as:

Agriculture includes food/beverage production and food processing
Information and Communications Technology
Aquaculture
International education
Aviation/Aerospace
Mining / mineral development
Biomedical (including research and development, manufacturing, etc.)
Mining and natural resources, forestry
cybersecurity
Patents are registered
Cultural industries
Transportation
Energy or natural gas sector
Tourism, tourism products, attractions, services and facilities
Export
Financial technology
agriculture
Film and video production
financial services
green economy

The businesses that the officers of the Canadian Immigration Department in the cases of

They do not show a desire to apply for permanent residence:

Inns or guesthouses that offer bed and breakfast services
Automatic car washes
Businesses related to providing payday loans, check cashing, money conversion, providing ATM machines
Metal scrap recycling
Mortgagor (a person who offers a loan with interest against collateral)
Businesses that sell second-hand goods (excluding businesses that provide value-added services such as repair, restoration or recycling)
Tanning salons (for tanning the skin)
Real estate brokerage, insurance brokerage, commercial brokerage
DVD rental shops
Activities related to real estate development
Self-service laundromats
Businesses related to commodity trade (eg export/import) unless value added is shown.
Home businesses and small farms grown for fun
Businesses that manufacture, distribute, or sell sexually immoral products.
Buy a business that is of “major benefit” to Canada.

Activities that have significant benefits for Canada include:

Development of new services and products
Use of new technologies
Developing innovative approaches to traditional businesses
Increase in Canadian exports
Value added jobs
Increasing research and development and commercialization of technology
Transfer of technology and specialized knowledge
Providing products or services to a weak local or regional market
Buy an active business that has been open for at least 12 months.

In order to apply for permanent residence in Canada, provide documents that show that your new business is active in business and has sufficient income.

Buy a business that has had good gross sales for the past 2-3 years.

Since your business in Canada must have sufficient revenue streams, always buy a business that has more than $250,000 in gross sales per year.

Buy a business that matches your past work history.

An important factor that immigration officials consider in your permanent residence case is whether you have the ability to manage your new business or not. For this purpose, they check your work records and work experiences in your country, and in this sense, your records must be in line with the type of new business activity.

For example, if you intend to buy a restaurant in Canada, but you have no experience in the food and hotel industry in your country, buying such a business is not suitable for applying for permanent residence in Canada.

Buying all kinds of business in Canada

Buying a restaurant in Canada

Buy a pharmacy in Canada

Shop shopping in Canada

Buying laundry in Canada

The best business in Canada

There are many profitable businesses in Canada that you can earn good money by buying them, but as mentioned in the previous section, be very careful about choosing your business and buy a business that is suitable for obtaining permanent residence in Canada.

Some of the most profitable small businesses in Canada include:

Transportation of passengers, transportation of goods, warehousing and storage of products
Waste management and recycling
Professional financial services
Sports and fitness centers

Read more: Best Business in Canada

Buying a business in Toronto and Vancouver, Canada

Fortunately, buying a business in Canada does not have provincial or regional restrictions. Therefore, it is possible to buy a business in any city in Canada, including Toronto or Vancouver. All the conditions, rules, advantages and disadvantages and tips mentioned about buying a business in Canada also apply to the city of Vancouver and Toronto. Of course, the rules of company registration in Canada are somewhat different in different provinces, but in this article, the topic we are discussing is buying a business.

After you buy your business in Toronto or Vancouver, like the previous owner or owners, you must file tax returns with the government every year, including the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST). .

Canadian permanent residence through business purchase

Canada has provided conditions through which foreign investors, owners and managers of businesses can obtain permanent residence by purchasing a business in this country. Of course, buying a business does not directly lead to obtaining Canadian permanent residence, but through the Owner-Operator Program, you can get a Canadian work visa and apply for Canadian permanent residence after one year.

The owner-operator program is not an official immigration program, but a work permit issued under the Federal Temporary Foreign Worker Program (TFWP). After you have purchased your desired business in Canada and taken ownership and development of it, after one year of business activity, you can apply for Canadian permanent residence through the Express Entry system.

The Express Entry system has several immigration programs, and with one year of business management experience, you can get Canadian permanent residency through the Canadian Experience Class program. Having management experience will add 200 points to your Express Entry score. Another condition of this program is that you have an IELTS score of 6 in all four language skills.

Be very careful that if you cannot obtain the necessary points for the Express Entry program, your permanent residence will be canceled and the entire capital that you have spent until then to buy the business and develop it; will be destroyed.

MasterVisa Canada services for buying business and investing in Canada

It is very important to have a professional and experienced lawyer who can guide you in this direction

is With years of experience in investment immigration and having successful cases, MasterVisa Canada International Company is ready to accept applicants interested in investing in Canada.

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