Given the complexities of a typical business acquisition, it is easy for the various teams handling the numerous legal issues that arise to forget about the impact of immigration issues on such a transaction. From dealing with entry into Canada to conduct due diligence on an international deal to deciding whose responsibility it is to employ foreign workers post-transaction, immigration issues should not be disregarded or put low on the priority scale, as they can be significant.
When a foreign company is purchasing a Canadian company and needs to have its personnel enter Canada to conduct due diligence, the purchaser’s representatives can enter as business visitors, as long as they engage in activities that are deemed to be international in nature, remain on the payroll of the foreign company, and are not seen to be entering into the Canadian labour market. Business visitors do not require Canadian work permits to engage in such business activities on Canadian soil.
If these employees are not U.S. citizens or green card holders, they may require a special temporary resident visa to enter Canada if they are nationals of certain designated countries (e.g., Brazil, Poland, Russia). Temporary resident visas cannot be applied for at the border or from within Canada; they must be secured prior to travel through a Canadian Consulate, High Commission or Embassy outside Canada.
In some asset purchase transactions, where offers of employment are made to the vendor’s employees, care needs to be taken with any workers of the target who are on work permits. Work permits are generally employer-specific.
Before a purchaser can employ such a foreign worker, the employee must apply to Canada Immigration to vary the terms of his or her admission to Canada. A new work permit needs to be issued showing the purchaser as the employer of the employee.
In some cases, this will also require the purchaser to apply to Service Canada (formerly Human Resources Skills Development Canada) for a ‘labour market opinion’ to be able to employ the foreign worker.
As a result, the purchaser should make any offer of employment made to the foreign worker conditional on the foreign worker applying for and obtaining a new work permit as described above.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
