Canada: IRCC Releases Eligibility Updates for Intra-Company Transfers

Eligibility requirements for companies:

• The updated guidance now requires officers to ensure that the foreign enterprise applying for an ICT qualifies as an existing multinational corporation (MNC). This means that the enterprise must have revenue-generating operations in at least two countries, before establishing an enterprise in Canada.
• Furthermore, the Canadian and foreign enterprises must all be legal entities and must have a parent, branch, subsidiary, or affiliate business relationship between them.
• The qualifying relationship will be determined by ownership and control and does not include business relationships between suppliers or clients; those based on contracts, licensing arrangements or franchise agreements; or ownership of a small amount of stock, membership in board of directors or similar arrangements.
• The reference to a MNC and the qualifying relationship are new definitions. Previously, companies were only required to have a foreign enterprise that was an affiliate, parent, branch or subsidiary of the Canadian enterprise. 

• As a result, according to IRCC, the enterprise outside of Canada cannot become an MNC by using the ICT work permit category to establish their first foreign enterprise in Canada.
• Under the tightened qualifying relationship definition, a Canadian enterprise that exists in name only and does not generate sustainable revenue and profit, or other benefits from business activities such as selling products or providing a service and/or has no employees or commercial premises, would not qualify for sponsoring ICTs.
• Furthermore, officers will scrutinize whether the foreign national is effectively taking a position in a Canadian branch and whether this category is used for service personnel whom the company is seeking to send into a client site in Canada on a need basis, which are unallowed activities via an ICT application.
• Under the updated guidance, foreign nationals seeking to enter Canada to establish a new business but are transferring from an enterprise outside of Canada that is not a MNC, are not eligible to apply under the ICT category. They may instead seek to apply under the Business owner – temporary purpose (C11)category instead.

Eligibility requirements for foreign nationals:

• The updated guidance sets forth stricter interpretation of whether applicants hold the necessary specialized knowledge to qualify under the program. Under the updated guidance, applicants should have at least two years of experience with the foreign enterprise. If less (but more than the one-year requirement), they should demonstrate studies in the relevant field or years of experience in the industry and would be subject to higher scrutiny. Previously, one year of employment with the foreign enterprise was typically sufficient to demonstrate specialized knowledge.
• The guidelines also clarify that part-time work cannot be used to meet the one year of full-time employment requirement with the foreign enterprise. Previously, part-time work equivalent to one year was allowed.
• Furthermore, foreign nationals are now required to demonstrate that their position in the foreign enterprise will remain available to them for their return after their period of employment in Canada, and that their work will generate significant economic, social or cultural benefits, or opportunities for Canadian citizens or permanent residents during their employment in Canada. These more restrictive requirements for applicants were not previously required.

• Overall, the guidance and stricter eligibility criteria for foreign nationals’ experience, knowledge and role in Canada reinforce that ICTs should not be used to transfer an enterprise’s general workforce to affiliated entities in Canada.
• Employers will need to carefully consider which foreign nationals they seek to send to Canada, and the intended purpose of the transfer.