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Things to know

  • Investments generally take the form of equity ownership or loans. Other more complex structures for investments are also sometimes used.
  • Governmental approvals may be needed under the Investment Canada Act and/or the Competition Act, depending on the type of investment and percentage ownership being acquired.  Also, companies operating in certain regulated industries (such as telecommunications) may be subject to foreign ownership restrictions.
  • Certain investment types may require compliance with Canadian securities laws.

Things to do


  • Determine the optimal structure for making the investment.  Consider whether a new Canadian subsidiary should be established to complete the investment. Tax considerations are an important component of the analysis, and a tax advisor should be consulted.

Due diligence

  • Investigate the business to be invested in. This will normally include a review of all important contracts, confirming ownership of key assets, assessing the liabilities of the business, and obtaining lien search results.

Assess regulatory implications

  • Determine if the transaction will give rise to a requirement for approvals under the Investment Canada Act and/or the Competition Act.  Determine whether the business being invested in is in a regulated industry that restricts foreign ownership or requires governmental approval.

Document the investment

  • Engage counsel to assist in negotiating a legally binding investment agreement.
  • Consider need for shareholder agreement (for equity investments).
  • Special considerations apply if you are taking security for loans.
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