Canada Tightens Intra-Company Transfer Rules
October 16, 2024 Amritpal Kaur
In a significant shift in immigration policy, Canada has tightened the regulations surrounding the Intra-Company Transfer (ICT) program, which will impact multinational corporations (MNCs) looking to establish or expand their operations in the country. Below are the main changes:
Active Operations Requirement: MNCs must now demonstrate that they have active, revenue-generating operations in at least two countries, including their home country, before they can establish a presence in Canada. This program is no longer available for companies looking to build their first foreign enterprise in Canada.
Restrictions for International Companies: Companies operating solely in a single jurisdiction outside of Canada will be unable to access the ICT program to launch new operations in the country.
Eligibility for Employee Relocation: The relocation of executive, managerial, or specialized knowledge personnel will only be permitted if they have a minimum of one year of continuous employment within the last three years.
Temporary Duration of Stay: All relocations to Canada must be for a temporary period.
Business Operations Requirement: The new Canadian enterprise must engage in business on a regular and systematic basis, ensuring the continuous provision of goods or services and stable employment for work permit holders.
Maintaining Qualifying Relationships: The new Canadian entity must maintain a qualifying relationship with its parent company, functioning as a branch, subsidiary, or affiliate.
Onsite Functions Requirement: Foreign nationals must ensure that their roles cannot be performed remotely and that their relocation is necessary to manage Canadian business operations independently.
Wage Standards: Foreign workers assigned to the Canadian operations must earn wages that are consistent with regional standards in Canada and reflective of their job titles.
Ineligibility of Certain Operations: Businesses that lack physical commercial premises, such as those operating from residential locations, co-sharing spaces, or virtual setups using mailing addresses, are ineligible for ICT transfers to Canada.
Remote Work Limitations: ICT employees are discouraged from working remotely unless there are valid reasons for doing so.
Eligibility Restrictions for Controlling Owners: Foreign nationals or immediate family members who hold a controlling interest in a foreign enterprise will be ineligible to enter Canada to start a new business unless they can demonstrate that the enterprise meets MNC requirements.
Emphasis on Temporary Stay: Applicants must provide evidence that their stay in Canada is temporary and that they intend to return to their home country upon the expiration of their work permit.
Economic Benefit to Canada: There is now a greater emphasis on demonstrating how an applicant’s work will specifically benefit Canada’s economy, culture, or society, rather than merely maintaining business relationships or expanding operations.
Higher Wage Requirements for Specialized Workers: Specialized workers must earn wages above the average that meet Canadian standards, in addition to fulfilling general wage requirements based on position and region.
Job Continuity Assurance: Employees must demonstrate that their original position will remain available for them abroad after their temporary assignment in Canada, underscoring the temporary nature of their Canadian operations.
These changes highlight Canada’s commitment to ensuring that the ICT program serves its intended purpose and that foreign businesses genuinely contribute to the Canadian economy.