Time Spent Outside Of Canada in connection with my own Canadian Business.

[fkhan123]

Hi Guys!

Could someone clarify it for me, I have been travelling a lot outside of Canada being a PR but most of the time it is in connection with my Canadian Enterprise involved in the Import/Export business. But in the other three countries where I do travel quite often, I have registered the similar type of business either as sole owner or jointly with local partner and each one does business with my Canadian business. Can I consider these type of absences as time spent in those countries provided that I have the ownership interest as well in those external businesses and they are doing business with the Canadian business which is solely owned by me?

I think that my above situation does fall under the "Situation 2. Employment Outside Canada" category of CIC's provided information in the Appendix A for PR Card renewal application see CIC's website for PRC Renewal.

Your experienced thoughts guys again....if it does not apply to my scenario then what would you suggest to make changes in my business set-up to fit in the CIC's requirements?

 

[Rob_TO]

Your experienced thoughts guys again....if it does not apply to my scenario then what would you suggest to make changes in my business set-up to fit in the CIC's requirements?

IMO I don't think the working abroad for a Canadian company exemption to the RO applies to your case. But really it's up to an individual visa officer when the time comes that your case is put to them after you don't meet the RO. There is no way to get any guarantee in advance, the only way to know for sure is to wait until you don't meet the RO and see what happens.

There is a very easy change you can do to fit CIC requirements. Simply spend 40% of your total time (equivalent to 2 of 5 years) residing inside Canada, and limit your travels outside Canada for work to no more than 60%.

 

[Naheulbeuck]

In most cases in a similar situation, it will depend on many factor, you need to know that IRCC reviews those quite intensely. This is meant as an exception and it is aware of people using this caveat to take advantage of the system and maintain their PR through it.

One must usually ask himself the following questions:

1. when was the business created?
2. how was it operated prior to you having to meet your PR (if set up prior to you becoming a PR)?
3. how many Canadian residents does it employ?
4. what type of business does it involved?
5. where and who are the customers of your Canadian business?
6. would you satisfy the provision that you need to be assigned temporarily to that overseas position?

BUT in your situation, because you have multiple companies that you operate, those are likely irrelevant.

IRCC's view is that the rules require you to be a "Full-Time employee". Furthermore, it considers that it is a question of Fact, not merely having the status per a contract.

In your situation, it is very unlikely that any officer would consider you satisfying the full time requirement due to having multiple, similar, companies that you operate in this manner.

Therefore as Rob said, I strongly recommend that you do not rely on this exception to meet your PR RO but instead ensure that you meet the basic criteria of 2 out of 5.

 

[dpenabill]

Hi Guys!

Could someone clarify it for me, I have been travelling a lot outside of Canada being a PR but most of the time it is in connection with my Canadian Enterprise involved in the Import/Export business. But in the other three countries where I do travel quite often, I have registered the similar type of business either as sole owner or jointly with local partner and each one does business with my Canadian business. Can I consider these type of absences as time spent in those countries provided that I have the ownership interest as well in those external businesses and they are doing business with the Canadian business which is solely owned by me?

I think that my above situation does fall under the "Situation 2. Employment Outside Canada" category of CIC's provided information in the Appendix A for PR Card renewal application see CIC's website for PRC Renewal.

Your experienced thoughts guys again....if it does not apply to my scenario then what would you suggest to make changes in my business set-up to fit in the CIC's requirements?

I largely agree with the gist of the post by Naheulbeuck, that overall the odds are not good or worse.

I cannot guess the particular logic or reasoning that an IRCC officer, to be followed by an IAD panel (on appeal), will apply. So I am not sure that the problem would be with the full-time requirement, or the temporary assignment requirement, or more about whether the business itself qualifies. It depends. Mostly it appears you are looking for a way to continue working abroad for an extended duration of time, perhaps permanently, which is not what the exception is intended to accommodate.


CAUTION: PRC and PR TD Guide descriptions of what qualifies for credit toward the PR Residency Obligation based on Employment outside Canada FAIL to alert PRs about important limitations and exclusions. This exception is rife with pitfalls.

Note in particular that if you deliberately set up a business so as to, as you say, "fit in the CIC's [IRCC's] requirements," that by itself tends to render the business as NON-qualifying for the working abroad credit toward the PR Residency Obligation.

For example, the Operational Manual ENF 23 Loss of permanent resident status states that for purposes of what businesses qualify, so that an employee of that business is eligible for the PR RO credit:

". . . a Canadian business does not include a business that serves primarily to allow a permanent resident to meet their residency obligation while residing outside Canada."

see ENF 23 Loss of permanent resident status section 7.4 by following link from http://www.cic.gc.ca/english/resources/manuals/index.asp

But yes, there probably are a number of ways to beat the system. Be aware, however, this is something which appears to be a priority target, something IRCC officers are trained and encouraged to be on the lookout for. Be wary of consultants who will, for a substantial fee, set up a business to accommodate working and living abroad. Many such consultants have been investigated, a number prosecuted for fraud, and their clients too get swept into severe screening or are outright investigated for fraud as well.

For what it is worth: my guess is that the smaller the business, particularly the Canadian element of the business, the more elevated and intense IRCC's scrutiny and skepticism is likely to be. Moreover, I do not have citations handy but as I recall there are actual cases reported in official decisions which indicate that having an ownership interest in the business at the very least creates strong suspicion if not an overt reason to find the business or employment does not qualify. (After all, can a person be said to have been genuinely assigned to a position abroad if the person is himself or herself part of the management making such decisions?)

Be aware, for example, that merely incorporating a business in Canada will not necessarily satisfy the requirement that it is a Canadian business.

 

[Naheulbeuck]

I will just add that my comment about the "full time" position is actually a stipulated requirement of the exception:

per s28(2)(a)(iii):
"a permanent resident complies with the residency obligation with respect to a five-year period if, on each of a total of at least 730 days in that five-year period, they are outside Canada employed on a full-time basis by a Canadian business or in the federal public administration or the public service of a province"

per s61 of the regulation (s61(3)):
"For the purposes of subparagraphs 28(2)(a)(iii) and (iv) of the Act, the expression employed on a full-time basis by a Canadian business or in the public service of Canada or of a province means, in relation to a permanent resident, that the permanent resident is an employee of, or under contract to provide services to, a Canadian business or the public service of Canada or of a province, and is assigned on a full-time basis as a term of the employment or contract to

(a) a position outside Canada;

(b) an affiliated enterprise outside Canada; or

(c) a client of the Canadian business or the public service outside Canada."

Again, as mentioned just having the employment contract stipulate "full time" is not sufficient as the courts and IRCC have taken the position that this is a question of facts and therefore if the duties and responsibilities do not correspond to a full time position, calling it one won't change the end result.

For the OP this is one of multiple issues as you highlighted though.

 

[dpenabill]

I will just add that my comment about the "full time" position is actually a stipulated requirement of the exception:

I absolutely agree that to qualify for the exception, the employment must be full-time, and that indeed, many of the formal decisions in which credit has been denied have focused on this particular element as the reason why, in that case, the PR's employment did not qualify for the credit.

Since the "full-time" aspect of employment is one which might be fairly easily manipulated by contract terms, however, the OP should be aware that ostensibly fixing that particular element is not likely to improve odds of getting credit in the scenario described, not improve the odds by much anyway.


Longer explanation:

The following is a longer explanation mostly for the benefit of the OP and others who are considering to what extent credit toward the PR RO might be available for time employed abroad on assignment from an ostensibly Canadian business.

The scenario outlined very generally by the OP raises multiple red flags and overall appears to be outside the scope of what IRCC will give credit for. It is, in particular, clearly not consistent with what IRCC (formerly CIC) interprets the rules are intended to accommodate.

The OP might, for example, create a corporate structure in Canada which specifically assigns him, on a full-time basis, to provide services to various business entities abroad, in a way that could be interpreted to meet the technical requirements for the credit. The likelihood of this being sufficient to get the credit in the general situation described by the OP, however, is not good.

Note: what could-be the interpretation is not necessarily how it will be interpreted.

In particular, what many fail to recognize is that just because a scenario can be interpreted favourably does not mean IRCC will interpret it that way. In contrast, IRCC can be expected to interpret facts and apply the rules to those facts consistent with the purpose of the rules, and any such interpretation and application ordinarily will be upheld by IAD and a Federal Court so long as that interpretation and application is reasonable. Remember, the Federal Court could outright disagree with how IRCC decided a particular case, but so long as IRCC's decision falls within a range of reasonable outcomes, the Federal Court MUST uphold that decision.

There are many it-depends factors in play for a PR trying to juggle what amounts to earning an income abroad with meeting the PR RO. As noted, the OP's situation obviously raises red flags and is likely to draw close scrutiny if not overt skepticism and suspicion, tending toward negative inferences with loss of PR status looming as a result. That is, it is relatively easy to guess that IRCC will make an effort to find reason to deny credit here and actually find such reason.

That said, there could be other factors which push the needle more favourably. If, for example, the PR's base of operations is clearly in Canada, the duration of time in Canada only falls short of two years in five by a minimal margin, and the frequency of trips back to Canada is consistent with the PR's activities being based in Canada, and the formalities meet the precise requirements for the credit (thus, for example, the employment is full-time), and the business itself clearly is engaged in Canadian operations (including full-time staff in Canada, and ongoing business activities in Canada beyond management and maintaining an office location in Canada).

The problem is that it is not so easy to mask what amounts to a business set up in a way to facilitate getting credit toward the PR RO for time doing business abroad, to in effect appear to meet the formalities for the credit but in essence really be a means to get credit while abroad . . . that is, IRCC is more or less likely to see a scheme here and, in one way or another to in-effect pierce the veil, and deny credit.

In the not-so-distant past it appeared that CIC was not scrutinizing these scenarios so intensely. A significant number of consultants (most not even an authorized representative) were providing services which included businesses set up to hire and assign the PR abroad. Since around 2008 to 2010, CIC (and now IRCC) pursued investigating and prosecuting a large number of those involved in these set-ups. In the meantime, CIC and now IRCC have created and implemented a variety of tools which will more extensively scrutinize and expose such schemes.

The conventional wisdom now is simple enough: for the PR who wants to continue working abroad, running a business abroad, the best approach is to be sure to spend at least 40% of the time physically in Canada, and to remember that just cutting-it-close can be risky . . . recognizing, after all, that compliance with the PR RO is a question of fact and proving compliance is dependent on the PR submitting sufficient, credible evidence.

 

[fkhan123]

Thanks guys for your valuable responses. Basically the conclusion is that, although the Full-Time condition is met in my case, but it does not apply as being Self-employed. At the end of day, my 100% time spent is full-time in my these businesses which in a way or the other generating revenue for the Canadian Business which fully falls under the definition of IRPA "as a Canadian Enterprise Proprietorship Business". The only difference is being a Sole-proprietor & self-employed do not qualify the criteria of a "Full-Time Employee"?

 

[scylla]

Simply put, we're saying there's an extremely good chance CIC won't count this time towards RO based on how we've seen them apply this rule. So you'll be risking your PR status if you move forward as planned.