To facilitate the transfer of senior management and technical personnel into Canada, several valuable tools are at the disposal of immigration lawyers and human resources managers
Key to the success of an international enterprise, especially in the context of mergers and acquisitions, is the mobility of the labour force.
To facilitate the transfer of senior management and technical personnel into Canada, several valuable tools are at the disposal of immigration lawyers and human resources managers. The most noteworthy are the North American Free Trade Agreement (NAFTA), the General Agreement on Trade in Services (GATS) and the regulations set out under the Immigration and Refugee Protection Act (IRPA).
Knowing how to take advantage of theses tools can save time and money in the transfer of key personnel.
‘Canadian interests’ and ‘significant benefits’
Senior managerial, executive and specialized knowledge employees can apply for work permits by showing that their presence in Canada may result in a significant benefit for Canadians. Such applicants are exempt from having to obtain a Human Resources and Skills Development (HRSDC) “labour market opinion” or “confirmation” before getting work permits.
Most exemptions from the need to obtain a labour market opinion are very specific and clearly defined in the IRPA regulations or international agreements. However, circumstances sometimes exist where a labour market opinion confirmation is not available and a specific exemption is not applicable, but the balance of practical considerations shows that a work permit should be issued to the applicant by reasons of public policy. Those circumstances may include benefits to the social, cultural or economic life in Canada.
Employees being transferred within a company can take advantage of an exemption granted to senior managers and specialized knowledge workers, as provided for by IRPA and international treaties. They still need work permits but are exempt from HRSDC labour market opinions. If applicants are citizens of the United States or Mexico, they can be covered under the provisions of NAFTA.
Organizations looking to transfer employees into Canada must be or will be “doing business” in both Canada and the foreign country. Doing business means regularly, systematically and continuously providing goods or services by a parent, branch subsidiary or an affiliate in Canada or in the foreign country. The mere presence of an agent or office in Canada is not sufficient. For example, a company with no employees and established for the sole purpose of transferring personnel would not qualify.
Employment relationships that wouldn’t qualify are those based purely on contracts, licensing or franchising agreements. Applicants seeking entry to open a new office on behalf of a foreign enterprise may qualify, as long as they can establish that the enterprise in Canada is expected to support a managerial or executive position or, in the case of specialized knowledge workers, is expected to be doing business.
The key factor is the common ownership and control of both the foreign and Canadian enterprises. Work permits for senior managers and executives can be granted for up to three years, while permits for specialized knowledge workers are valid for one year and are renewable yearly.
To qualify as a “specialized knowledge” worker entering Canada as an intra-company transferee, an applicant must demonstrate “specialized knowledge of a company’s product or service and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.” The determination as to whether a worker possesses specialized knowledge does not involve a test of the Canadian labour market, but rather the consideration of the type of knowledge possessed by the applicant.
Specialized knowledge is generally defined as unusual and different from that found in a particular industry. The knowledge need not be proprietary or unique, but it should be uncommon. As a general rule, specialized knowledge may involve a person’s familiarity with a product or service that no other company makes, or that other companies make, but differently. Specialized knowledge has to be of some complexity, hence not easily transferred to another individual in the short term.
Applicants in the intra-company transferee category must have worked for the transferring company in a similar position for at least one year in the previous three years. They further have to spend at least 25 per cent of their time in Canada during the permit’s validity period.
Canada is a signatory to a number of international agreements that involve the movement of foreign personnel. The most important agreements signed by Canada are NAFTA, GATS and the Canada Chile Free Trade Agreement (CCFTA).
NAFTA
NAFTA contains special provisions concerning immigration between the three signatory countries: the U.S., Mexico and Canada. Chapter 16 of NAFTA, entitled “Temporary Entry for Business Persons,” provides mechanisms to facilitate the movement of business persons in the three countries, on a reciprocal basis, in specific areas of business activity detailed in the agreement. However, NAFTA does not replace existing immigration law in any of the three countries. Permanent residents are not covered; they continue to be governed by the general provisions concerning temporary entry for foreign workers found in immigration legislation in each country.
Business visitors: These are business people who plan to carry on business activities related to research and design, growth, manufacturing, production, marketing, sales, distribution, after-sales service and general service. The business activities covered by Appendix 1603.A.1 of NAFTA are of a commercial nature and reflect the components of the business cycle. In most cases, U.S. or Mexican citizens coming to Canada for business meetings can easily qualify as business visitors.
Applicants who wish to gain entry under the “after-sales service” sub-category of business visitors must also demonstrate that:
•the purpose of entry is to install, repair, service equipment or machinery manufactured and purchased outside the country, or to supervise or train workers to perform such services;
•the equipment or machinery serviced (including computer software) is commercial or industrial, not household or personal;
•the work is done pursuant to an original sales contract and any warranty or service agreement is incidental to the sale;
•the work is carried out during the validity of the warranty or service agreement or any extensions of same;
•the work requires “specialized knowledge” and excludes hands-on building or construction work. “Specialized knowledge” is defined as a very high degree of knowledge possessed by people who are already skilled in their occupation and who have undergone extensive training.
Business visitors must apply at the port of entry, not in advance at a consulate or an embassy. Visas are granted for short-term stays; extensions can be issued if the requirements continue to be met.
Professionals: Citizens of the U.S. and Mexico may qualify for temporary entry to Canada as professionals if they have the necessary qualifications to work in their professions, have pre-arranged employment with a local employer, enter for the purposes of providing professional-level services in the same field of their qualification, and comply with existing immigration requirements for temporary entry.
There are more than 60 occupations listed in NAFTA. The list is comprehensive and cannot be interpreted. An occupation which does not appear on the list is automatically excluded; however, there is some room for different job titles within allowed occupations.
The treaty also sets out minimum educational requirements and alternative credentials for each profession. These are the minimum criteria for entry and do not necessarily reflect the educational requirements, accreditation or licensing necessary to practise a profession. Immigration authorities will not require the necessary provincial licensing to practice the profession; to do so would defeat the purpose of the NAFTA provisions concerning professionals.
Professionals can apply for NAFTA status at the port of entry or make an application at a mission abroad before departing for the destination country. The work permit is initially valid for up to one year, but can be extended if the professional continues to meet entry requirements under that category. Although there is no time limit on extensions, applicants must satisfy immigration officers that their employment continues to be “temporary” and that they are not using NAFTA entry provisions as a means to circumvent normal immigration procedures.
Intra-company transferees: Under NAFTA, business people in a managerial or executive capacity, or in a position that involves specialized knowledge, may be transferred between branches, subsidiaries or sister companies.
To qualify as a manager or executive in this category, the transferee must be engaged in managerial or executive duties. Work permits issued under this category are valid for a maximum of three years. However, individuals admitted to open an office or to work in a new office are normally issued an initial authorization for a maximum of one year, with possible extensions for up to two years if they continue to meet the eligibility requirements of intra-company transferees.
It must be noted that the intra-company transferee visa is the only one with a maximum duration imposed on the total duration of employment. The maximum period of stay for a person employed in an executive or managerial capacity is seven years. The total period of stay for a person in a position requiring specialized knowledge may not exceed five years.
Two other categories are covered under NAFTA — traders and investors — but these are seldom used in the context of mergers and acquisitions. Also, people coming from Chile for the purpose of work or business may make use of CCFTA, which mirrors NAFTA.
GATS
The General Agreement on Trade in Services provides expedited and simplified entry procedures for admission to signatory countries for business purposes and employment for individuals from 122 countries. The most valuable feature of this agreement is simply that it allows foreign workers to enter member countries without a job validation or foreign worker record.
To qualify, prospective applicants must be entering a member nation to engage in a business activity in one of the following sectors: business services, communication services, construction services, distribution services, environmental services, financial services, tourism and travel-related services or transport services.
It is important to ensure that the specific occupational services relating to the applicant are enumerated. For example, legal, accounting and engineering personnel are found under the business services section, while communication services has the largest listing of computer-related services.
Three types of business people qualify for admission under GATS.
Business visitors: These are citizens of a member nation who will stay in another member nation without obtaining remuneration from within it and without engaging in making direct sales to the general public or supplying services. Normally, they enter for business meetings, including negotiations for the sale of services or to prepare for establishing a commercial presence.
Professionals: Under GATS, the activities to be performed by the professional applicant must be part of a service contract obtained by an enterprise in another member nation. The list of eligible professions presently includes engineers, agrologists, architects, forestry professionals, geomatic professionals and land surveyors. There are plans to expand the list to include legal consultants, urban planners and computer specialists. The applicant must possess the necessary academic credentials and professional qualifications recognized by the local professional association in the destination country.
Intra-company transferees: This category significantly expands the accessibility to the local labour market of key personnel needed to oversee the operations of foreign service providers.
“Intra-company transferees” are citizens of member nations who have been employed for a period of not less than one year and who seek temporary entry in order to render services to the same company which is engaged in substantive business operations, or to a company constituted locally and engaged in substantive business operations owned, controlled or affiliated with the transferring enterprise.
GATS sets out three specifically defined types of foreign workers who may qualify as intra-company transferees. These are senior executives, senior managers and specialists transferred by a foreign enterprise which is related (as parent, subsidiary or affiliate) to the local enterprise.
GATS provisions are in many respects similar in substance to those of NAFTA, but because they apply to individuals from more than 122 member nations, they have a much broader application. Like NAFTA, GATS expands but does not replace the general provisions pertaining to foreign workers. However, in most instances, where U.S. or Mexican nationals are concerned, the common-sense approach would be to first consider the applicability of NAFTA before turning to the provisions of GATS.
The use of the intra-company transferee provisions of GATS should generally be restricted to intra-company transferees whose applications are based on their specialized knowledge. In contrast, the intra-company transferee provisions of NAFTA require that the one year of experience must have been obtained within the three-year period immediately preceding the applicant’s transfer to the member nation.
GATS requires that applicants possess “an advanced level of expertise” in certain aspects of the enterprise. In contrast, NAFTA requires advanced expertise only if the transferee’s application is based on knowledge of the local enterprise’s process and procedures. Under NAFTA, if the application is based on the transferee’s knowledge of the local enterprise’s product, service, research, equipment, techniques, management or other interests, the transferee’s knowledge need only meet the standard of “specialized knowledge.” Given that the GATS threshold of an “advanced level of expertise” is considerably higher than the specialized knowledge requirements of NAFTA, an examination of the applicant’s knowledge in relation to the employer’s needs is required.
Visa consultants can be expensive intermediaries
When considering transferring senior management, executive or technical personnel in the context of a merger or acquisition, HR managers should be mindful of both the advantages and limitations of work permits and consult with an experienced immigration lawyer prior to making any commitments related to the transfer of key personnel.
Beware of “global visa” consulting organizations, which attempt to provide visa services for a multiplicity of countries. They seldom have the required expertise in Canadian law, and may not be entitled to represent individuals or organizations before Canadian immigration authorities. Since April 13, 2004, immigration regulations require that only lawyers who are members in good standing with one of the provincial bars, notaries in the province of Quebec, or registered consultants approved by the Canadian Society of Immigration Consultants may make representations to immigration authorities.
The self-styled “global visa” services, some of which are owned and operated by American law firms, are simply acting as intermediaries between the organization and the local lawyers, hence increasing costs by charging a management fee, and in many cases hindering the speed of applications and communications. An organization’s best bet is to deal directly with a lawyer who specializes in immigration matters. The so-called “consultants” are not subject to any kind of rigorous screening process that would ensure their competence. Work permit applications can be complex and may require a thorough understanding of corporate law.
Sergio Karas is a Toronto-based lawyer and a certified specialist in Canadian citizenship and immigration law. He may be contacted at (416) 506-1800, [email protected] or www.karas.ca.
To facilitate the transfer of senior management and technical personnel into Canada, several valuable tools are at the disposal of immigration lawyers and human resources managers. The most noteworthy are the North American Free Trade Agreement (NAFTA), the General Agreement on Trade in Services (GATS) and the regulations set out under the Immigration and Refugee Protection Act (IRPA).
Knowing how to take advantage of theses tools can save time and money in the transfer of key personnel.
‘Canadian interests’ and ‘significant benefits’
Senior managerial, executive and specialized knowledge employees can apply for work permits by showing that their presence in Canada may result in a significant benefit for Canadians. Such applicants are exempt from having to obtain a Human Resources and Skills Development (HRSDC) “labour market opinion” or “confirmation” before getting work permits.
Most exemptions from the need to obtain a labour market opinion are very specific and clearly defined in the IRPA regulations or international agreements. However, circumstances sometimes exist where a labour market opinion confirmation is not available and a specific exemption is not applicable, but the balance of practical considerations shows that a work permit should be issued to the applicant by reasons of public policy. Those circumstances may include benefits to the social, cultural or economic life in Canada.
Employees being transferred within a company can take advantage of an exemption granted to senior managers and specialized knowledge workers, as provided for by IRPA and international treaties. They still need work permits but are exempt from HRSDC labour market opinions. If applicants are citizens of the United States or Mexico, they can be covered under the provisions of NAFTA.
Organizations looking to transfer employees into Canada must be or will be “doing business” in both Canada and the foreign country. Doing business means regularly, systematically and continuously providing goods or services by a parent, branch subsidiary or an affiliate in Canada or in the foreign country. The mere presence of an agent or office in Canada is not sufficient. For example, a company with no employees and established for the sole purpose of transferring personnel would not qualify.
Employment relationships that wouldn’t qualify are those based purely on contracts, licensing or franchising agreements. Applicants seeking entry to open a new office on behalf of a foreign enterprise may qualify, as long as they can establish that the enterprise in Canada is expected to support a managerial or executive position or, in the case of specialized knowledge workers, is expected to be doing business.
The key factor is the common ownership and control of both the foreign and Canadian enterprises. Work permits for senior managers and executives can be granted for up to three years, while permits for specialized knowledge workers are valid for one year and are renewable yearly.
To qualify as a “specialized knowledge” worker entering Canada as an intra-company transferee, an applicant must demonstrate “specialized knowledge of a company’s product or service and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.” The determination as to whether a worker possesses specialized knowledge does not involve a test of the Canadian labour market, but rather the consideration of the type of knowledge possessed by the applicant.
Specialized knowledge is generally defined as unusual and different from that found in a particular industry. The knowledge need not be proprietary or unique, but it should be uncommon. As a general rule, specialized knowledge may involve a person’s familiarity with a product or service that no other company makes, or that other companies make, but differently. Specialized knowledge has to be of some complexity, hence not easily transferred to another individual in the short term.
Applicants in the intra-company transferee category must have worked for the transferring company in a similar position for at least one year in the previous three years. They further have to spend at least 25 per cent of their time in Canada during the permit’s validity period.
Canada is a signatory to a number of international agreements that involve the movement of foreign personnel. The most important agreements signed by Canada are NAFTA, GATS and the Canada Chile Free Trade Agreement (CCFTA).
NAFTA
NAFTA contains special provisions concerning immigration between the three signatory countries: the U.S., Mexico and Canada. Chapter 16 of NAFTA, entitled “Temporary Entry for Business Persons,” provides mechanisms to facilitate the movement of business persons in the three countries, on a reciprocal basis, in specific areas of business activity detailed in the agreement. However, NAFTA does not replace existing immigration law in any of the three countries. Permanent residents are not covered; they continue to be governed by the general provisions concerning temporary entry for foreign workers found in immigration legislation in each country.
Business visitors: These are business people who plan to carry on business activities related to research and design, growth, manufacturing, production, marketing, sales, distribution, after-sales service and general service. The business activities covered by Appendix 1603.A.1 of NAFTA are of a commercial nature and reflect the components of the business cycle. In most cases, U.S. or Mexican citizens coming to Canada for business meetings can easily qualify as business visitors.
Applicants who wish to gain entry under the “after-sales service” sub-category of business visitors must also demonstrate that:
•the purpose of entry is to install, repair, service equipment or machinery manufactured and purchased outside the country, or to supervise or train workers to perform such services;
•the equipment or machinery serviced (including computer software) is commercial or industrial, not household or personal;
•the work is done pursuant to an original sales contract and any warranty or service agreement is incidental to the sale;
•the work is carried out during the validity of the warranty or service agreement or any extensions of same;
•the work requires “specialized knowledge” and excludes hands-on building or construction work. “Specialized knowledge” is defined as a very high degree of knowledge possessed by people who are already skilled in their occupation and who have undergone extensive training.
Business visitors must apply at the port of entry, not in advance at a consulate or an embassy. Visas are granted for short-term stays; extensions can be issued if the requirements continue to be met.
Professionals: Citizens of the U.S. and Mexico may qualify for temporary entry to Canada as professionals if they have the necessary qualifications to work in their professions, have pre-arranged employment with a local employer, enter for the purposes of providing professional-level services in the same field of their qualification, and comply with existing immigration requirements for temporary entry.
There are more than 60 occupations listed in NAFTA. The list is comprehensive and cannot be interpreted. An occupation which does not appear on the list is automatically excluded; however, there is some room for different job titles within allowed occupations.
The treaty also sets out minimum educational requirements and alternative credentials for each profession. These are the minimum criteria for entry and do not necessarily reflect the educational requirements, accreditation or licensing necessary to practise a profession. Immigration authorities will not require the necessary provincial licensing to practice the profession; to do so would defeat the purpose of the NAFTA provisions concerning professionals.
Professionals can apply for NAFTA status at the port of entry or make an application at a mission abroad before departing for the destination country. The work permit is initially valid for up to one year, but can be extended if the professional continues to meet entry requirements under that category. Although there is no time limit on extensions, applicants must satisfy immigration officers that their employment continues to be “temporary” and that they are not using NAFTA entry provisions as a means to circumvent normal immigration procedures.
Intra-company transferees: Under NAFTA, business people in a managerial or executive capacity, or in a position that involves specialized knowledge, may be transferred between branches, subsidiaries or sister companies.
To qualify as a manager or executive in this category, the transferee must be engaged in managerial or executive duties. Work permits issued under this category are valid for a maximum of three years. However, individuals admitted to open an office or to work in a new office are normally issued an initial authorization for a maximum of one year, with possible extensions for up to two years if they continue to meet the eligibility requirements of intra-company transferees.
It must be noted that the intra-company transferee visa is the only one with a maximum duration imposed on the total duration of employment. The maximum period of stay for a person employed in an executive or managerial capacity is seven years. The total period of stay for a person in a position requiring specialized knowledge may not exceed five years.
Two other categories are covered under NAFTA — traders and investors — but these are seldom used in the context of mergers and acquisitions. Also, people coming from Chile for the purpose of work or business may make use of CCFTA, which mirrors NAFTA.
GATS
The General Agreement on Trade in Services provides expedited and simplified entry procedures for admission to signatory countries for business purposes and employment for individuals from 122 countries. The most valuable feature of this agreement is simply that it allows foreign workers to enter member countries without a job validation or foreign worker record.
To qualify, prospective applicants must be entering a member nation to engage in a business activity in one of the following sectors: business services, communication services, construction services, distribution services, environmental services, financial services, tourism and travel-related services or transport services.
It is important to ensure that the specific occupational services relating to the applicant are enumerated. For example, legal, accounting and engineering personnel are found under the business services section, while communication services has the largest listing of computer-related services.
Three types of business people qualify for admission under GATS.
Business visitors: These are citizens of a member nation who will stay in another member nation without obtaining remuneration from within it and without engaging in making direct sales to the general public or supplying services. Normally, they enter for business meetings, including negotiations for the sale of services or to prepare for establishing a commercial presence.
Professionals: Under GATS, the activities to be performed by the professional applicant must be part of a service contract obtained by an enterprise in another member nation. The list of eligible professions presently includes engineers, agrologists, architects, forestry professionals, geomatic professionals and land surveyors. There are plans to expand the list to include legal consultants, urban planners and computer specialists. The applicant must possess the necessary academic credentials and professional qualifications recognized by the local professional association in the destination country.
Intra-company transferees: This category significantly expands the accessibility to the local labour market of key personnel needed to oversee the operations of foreign service providers.
“Intra-company transferees” are citizens of member nations who have been employed for a period of not less than one year and who seek temporary entry in order to render services to the same company which is engaged in substantive business operations, or to a company constituted locally and engaged in substantive business operations owned, controlled or affiliated with the transferring enterprise.
GATS sets out three specifically defined types of foreign workers who may qualify as intra-company transferees. These are senior executives, senior managers and specialists transferred by a foreign enterprise which is related (as parent, subsidiary or affiliate) to the local enterprise.
GATS provisions are in many respects similar in substance to those of NAFTA, but because they apply to individuals from more than 122 member nations, they have a much broader application. Like NAFTA, GATS expands but does not replace the general provisions pertaining to foreign workers. However, in most instances, where U.S. or Mexican nationals are concerned, the common-sense approach would be to first consider the applicability of NAFTA before turning to the provisions of GATS.
The use of the intra-company transferee provisions of GATS should generally be restricted to intra-company transferees whose applications are based on their specialized knowledge. In contrast, the intra-company transferee provisions of NAFTA require that the one year of experience must have been obtained within the three-year period immediately preceding the applicant’s transfer to the member nation.
GATS requires that applicants possess “an advanced level of expertise” in certain aspects of the enterprise. In contrast, NAFTA requires advanced expertise only if the transferee’s application is based on knowledge of the local enterprise’s process and procedures. Under NAFTA, if the application is based on the transferee’s knowledge of the local enterprise’s product, service, research, equipment, techniques, management or other interests, the transferee’s knowledge need only meet the standard of “specialized knowledge.” Given that the GATS threshold of an “advanced level of expertise” is considerably higher than the specialized knowledge requirements of NAFTA, an examination of the applicant’s knowledge in relation to the employer’s needs is required.
Visa consultants can be expensive intermediaries
When considering transferring senior management, executive or technical personnel in the context of a merger or acquisition, HR managers should be mindful of both the advantages and limitations of work permits and consult with an experienced immigration lawyer prior to making any commitments related to the transfer of key personnel.
Beware of “global visa” consulting organizations, which attempt to provide visa services for a multiplicity of countries. They seldom have the required expertise in Canadian law, and may not be entitled to represent individuals or organizations before Canadian immigration authorities. Since April 13, 2004, immigration regulations require that only lawyers who are members in good standing with one of the provincial bars, notaries in the province of Quebec, or registered consultants approved by the Canadian Society of Immigration Consultants may make representations to immigration authorities.
The self-styled “global visa” services, some of which are owned and operated by American law firms, are simply acting as intermediaries between the organization and the local lawyers, hence increasing costs by charging a management fee, and in many cases hindering the speed of applications and communications. An organization’s best bet is to deal directly with a lawyer who specializes in immigration matters. The so-called “consultants” are not subject to any kind of rigorous screening process that would ensure their competence. Work permit applications can be complex and may require a thorough understanding of corporate law.
Sergio Karas is a Toronto-based lawyer and a certified specialist in Canadian citizenship and immigration law. He may be contacted at (416) 506-1800, [email protected] or www.karas.ca.
