Many of you knew that I came from an immigration family.
My dad has his own contracting business in Hong Kong. The majority of his clients are banks, government institutes and charitable organizations who operate schools and hospitals.
When he decided to immigrate to Canada, the process was not at all easy. Because of the language barrier, my dad relied heavily on the immigration agents to assist with the application process. This, of course, involved a lot of money.
One of the criteria was that he would have to open a business and hired at least two full time employees so our entire family would be able to obtain our permanent residency in Canada.
So I was not surprised when I saw a message from a coworker I used to work with at Deloitte asking if I knew of anyone selling their manufacturing businesses. Many wealthy Chinese businessmen are interested in buying businesses so that they could qualify to come to Canada with their families.
A business close to bankruptcy may still qualify if there are sufficient underlying assets supporting it.
[private levels=”myrealestatetaxtips”]So, what exactly is the entry price that someone need to pay in exchange for a permanent residency status in Ontario?
Depending on where the businessman is planning to invest, a minimum of $500,000–$1million investment is required and 2 new jobs must be created. The applicants are also required to have minimum net worth of $800,000–$1.5million as well.
They can also choose to invest $5million straight, then there is no minimum net worth requirement.
The price tags are not cheap, but these people are willing to pay for it.
Combining with the headline last week from Financial Post that more money could be flowing to the Canadian housing market from China due to the messy currency crisis, it is not difficult to explain why the GTA housing market has gone up so significantly and will continue to do so.
The fact that our dollar has tumbled significantly over the last half year made it even cheaper for these wealthy men and women to come to Canada.
One of our houses in St. Catharines has been rented to a group of new Niagara College graduates, originally from China.
They are planning to open up a Chinese restaurant in downtown St. Catharines.
Their plan is to apply to become Canadian citizens when their business is up and running.
These young adults are paying me top of the market rent.
They are helping the Canadian economy, using money earned by their parents in China.
My mom was worried when she found out that Erwin and I are in the process of buying another property to finance Bruce’s house.
It’s difficult for her to understand why it is “safe” to purchase another house, despite the skyrocketing housing prices in Toronto.
We are not buying a half million dollar home. We are simply buying a starter home that is in high demand by tenants and the rent is more than enough to cover all the bills.
Although we do not have a business worth over $500,000 for these foreign businessmen to invest in, we are still getting the benefits from them as real estate investors.
But if you do have a business that you want to get rid of, I am also happy to pass along my friend’s contact. 🙂 [/private]
Until next time, happy Canadian Real Estate Investing.
Cherry Chan, CPA, CA
Your Real Estate Accountant
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