The purpose of the ICA is to provide for the review of significant investments in Canada by non-Canadians in a manner that
Any non-Canadian who proposes to establish a new business or acquire an existing business in Canada should be aware of the provisions of the federal Investment Canada Act (ICA). The purpose of the ICA is to provide for the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada. The Investment Review Division (IRD), which is part of Innovation, Science and Economic Development Canada, is responsible for administering the ICA and for promoting and reviewing significant non-cultural investments in Canada by non-Canadians. Investments in cultural businesses are reviewed under the ICA by the Department of Canadian Heritage. Application of the Investment Canada Act There are two streams of review under the ICA: net benefit review and national security review. Under the net benefit review process, when a non-Canadian acquires control of a business carried on in Canada, the acquisition will be either notifiable or reviewable under the ICA. Whether such an acquisition is notifiable or reviewable will depend on the value of the assets of the Canadian business being acquired. The ICA applies even if the business is not currently controlled by Canadians. It also applies where a Canadian business is acquired indirectly through the acquisition of a foreign corporation with a Canadian subsidiary. Notification, when required, may be made either prior to closing or within 30 days of closing and involves the filing of only very basic information concerning the investor and the acquired business. Notification does not represent an impediment to an acquisition. However, an acquisition that is subject to review under the ICA may not be completed unless the Minister of Innovation, Science and Industry (Minister) or, in the case of an acquisition of a “cultural business,” the Minister of Canadian Heritage is satisfied that the acquisition is likely to be of “net benefit to Canada.” Investments to establish new Canadian businesses are always subject to notification. In certain limited circumstances, an investment to establish a new cultural business may also be subject to review. The national security review process applies more broadly, including to foreign investments that are not subject to the net benefit process, such as acquisitions of minority interests in Canadian businesses. There is no threshold for notification or pre-closing review. Instead, the Canadian government has broad discretion to review any investment by a non-Canadian on grounds that it could be “injurious” to Canadian national security.
encourages investment,
economic growth and employment opportunities in Canada.
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Doing Business in Canada
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