Setting up a Canadian subsidiary for an intra-company transfer: the genuineness tests

The threshold question: is the group already a multinational?

Since IRCC's consolidated instructions of 3 October 2024, an intra-company transferee must be transferring from a foreign enterprise of an existing multinational corporation, defined as a company with revenue-generating operations in at least one country other than its home country. For a transfer to establish a new Canadian enterprise under exemption code C61, the foreign enterprise must already have revenue-generating operations in at least two countries before the Canadian expansion. IRCC states plainly that an enterprise outside Canada cannot become a multinational by using the ICT work permit category.

This is the question to answer before any Canadian company is formed. A group headquartered in Singapore with a sales subsidiary in Japan is a multinational and may use C61 for Canada. A company with a single home-country operation and a dormant Hong Kong holding entity is not, and no amount of Canadian corporate structuring will change that; its options are an LMIA-based hire, a C11 significant-benefit permit for an owner who controls the Canadian business, or growing a second real operation elsewhere first. Owners and controlling shareholders starting a new business are expressly ineligible under C61 unless the enterprise meets the multinational requirement.

What doing business means

IRCC uses revenue generation as the test of operations abroad, and the CUSMA instructions require evidence that the business is, or will be, doing business in both Canada and the other country. In practice officers look for the ordinary marks of a trading enterprise in each jurisdiction: customers and invoices, contracts, payroll, premises, tax filings and bank activity. A registered entity with a share capital and no trade is not doing business; nor is an entity whose only activity is holding shares in another. For the Canadian side at the C61 stage, the enterprise will not yet be trading, which is why the instructions substitute forward-looking evidence: premises, a business plan, financial documentation and a human-resources plan showing that the operation will support the transferee's role.

The corporate relationship must be one of ownership and control: parent, subsidiary, branch or affiliate. Customer, supplier, distributor, franchise and licensing relationships do not qualify however close they are. The ownership chain between the foreign employer and the Canadian enterprise should be documented entity by entity, with registers and share certificates, and any indirect or minority holdings explained.

Premises, plans and money: the C61 evidence

IRCC's instructions require physical commercial premises for a new enterprise; a lawyer's address may be used temporarily. A residential address or a virtual office will not satisfy the requirement, and the lease should match the business plan's description of the operation. The business plan must set out what the Canadian enterprise will do, for whom, with what staff, and on what timetable; the financial documentation must show that the group can fund it; and the human-resources plan must show how a managerial or specialised role will be supported within the year.

The transferee must be an executive, manager or specialised-knowledge worker in their own right, with one year of full-time employment with the foreign enterprise in the three years before the application. A founder who has run the home-country business for a decade satisfies the service requirement; whether the Canadian role is executive or managerial depends on what the enterprise will have for the person to direct. An officer will ask what the executive will manage in a company with no staff, and the answer must be in the plan.

Wages must not be lower than the prevailing wage for the occupation and location on Job Bank, with non-cash allowances excluded. For a new enterprise the salary should be funded from the group, and the funding evidenced.

The Canadian set-up sequence

The corporate steps are standard and should be done in the order the immigration evidence needs them. Incorporate federally or provincially and obtain the certificate and registers. Open a Canadian bank account and capitalise the company from the parent, keeping the transfer record. Register with the Canada Revenue Agency for a business number, payroll and tax accounts, and with the provincial workers' compensation board where required. Sign the lease. Register in the IRCC Employer Portal and submit the offer of employment under C61, paying the CAD 230 employer compliance fee unless exempt; the offer's occupation, duties, wage and location must match the business plan and the later work-permit application.

Timing matters because the C61 permit is limited to one year and the instructions are inconsistent on extensions, allowing none in one section and a possible six months for extenuating circumstances in another. The enterprise should plan to be doing business, with staff and revenue, by the time the transferee needs a C62 or C63 permit, and should keep the month-by-month record that will show it.

The genuineness factors officers apply

Section 200(5) of the Regulations lists the factors for assessing whether an offer of employment is genuine: whether the offer is made by an employer actively engaged in the business in respect of which the offer is made; whether it is consistent with the employer's reasonable employment needs; whether the employer is reasonably able to fulfil its terms; and whether the employer, or a person recruiting on its behalf, has complied with federal and provincial employment and recruitment law. For a new subsidiary each factor has a concrete meaning. Active engagement is shown by the premises, the bank activity and the first contracts. Reasonable employment need is shown by a plan that requires an executive, not a plan that requires a salesperson with an executive title. Ability to fulfil the terms is shown by the group's funding. Compliance is shown by the registrations.

Since October 2024 officers must keep the evidence they relied on accessible in IRCC's system, or at minimum note the evidence reviewed. Applications are therefore decided on documents. The group should assume that an assertion unsupported by a document is an assertion the officer will treat as unproven.

Common failures

Four patterns account for most refusals. The group is not a multinational, or its second operation is a shell. The relationship is contractual (a distributor or a licensee) rather than ownership. The transferee's role is managerial on paper but operational in fact, or the specialised knowledge is general industry skill rather than proprietary knowledge plus advanced expertise. And the premises or plan are nominal: a virtual office, a plan without numbers, a company without funding.

A fifth pattern is sequencing: the family incorporates in Canada, applies at a port of entry with a thin file, is refused, and then builds the evidence. A port-of-entry refusal is recorded and complicates the later application. The better sequence is to build the Canadian enterprise's evidence first, apply with it, and treat the first year as the period in which the subsidiary earns the C62 permit that follows.