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LMIA For a New Business? Is that Possible?

Yes and no, a company that is just starting in Canada can apply for a Labour Market Impact Assessment (LMIA), but they may face challenges in providing the required business proof, especially when it comes to demonstrating a history of employing and paying employees appropriately.

To apply for an LMIA in Canada, employers must go through a rigorous process designed to ensure that hiring a foreign worker will not have a negative impact on the Canadian labor market. Part of this process involves providing evidence of their business's legitimacy and capacity to employ foreign workers. The documentation required for an LMIA application includes detailed information about the business and its operations.

One key aspect of the LMIA application is T100 and T125. These forms require the employer to provide information about their company's revenue and expenditure history including having employees and paying them appropriately. This comprises details such as the number of employees, their positions, wages, and any benefits provided. It's crucial to show that the company has complied with Canadian labor laws and has a track record of fair employment practices.

T100 and T125 to prove past compliance
LMIA applications require business to prove past history of paying empoyees

Now, regarding the question of whether a new company can apply for an LMIA, the answer is technically yes, as there is no specific requirement that a company must be more than a year old to apply. However, new companies may face challenges in proving their past history of paying employees and having the necessary cash flow to afford a foreign worker.

This is where the "no" part comes into play. New companies may find it more difficult to meet the LMIA requirements compared to established businesses. They might lack a track record of employment practices and financial stability, which could raise concerns during the LMIA assessment process. The government assesses the potential impact on the Canadian labor market, and a new company may not have a solid history to demonstrate their ability to meet this criterion.

However, in cases where the foreign worker is also the majority owner of the newly established company, the dynamics of the LMIA application can change significantly. Having a significant stake in the business demonstrates a high level of commitment and "skin in the game." This can serve as a strong argument in support of their LMIA application. In such situations, the Canadian government may view the foreign worker's involvement as an indication of their dedication to the success of the business, which in turn can positively influence the assessment process. While the challenges of demonstrating a history of employee payment and financial stability may still exist for the newly established company, the fact that the foreign worker is a majority owner can mitigate some of these concerns. It underscores their vested interest in adhering to Canadian labor laws and contributing positively to the local economy.

Foreign Worker supported by LMIA
Chef is a common position that companies apply for LMIA for.

However, regardless of the ownership structure, it remains critically important to provide evidence that the business can afford to pay the foreign worker appropriate wages as per Job Bank Canada's requirements. Demonstrating the financial capacity to meet the prevailing wage rates for the specific job being offered to the foreign worker is a fundamental aspect of the LMIA application.

This financial proof should include detailed information about the company's revenue, cash flow, and financial projections, especially if it's a newly established business. Financial statements, bank records, and business plans can be valuable in demonstrating the ability to pay the worker fairly and sustainably. Ensuring that the foreign worker will receive compensation in accordance with Canadian labor standards is a key consideration for the LMIA process, as it reflects the commitment to fair employment practices and aligns with the government's objective of protecting the rights and wages of both domestic and foreign workers. Providing a robust financial case can significantly strengthen the LMIA application and increase the likelihood of approval.

Arsheen Devjee Immigration Services specializes in facilitating Labour Market Impact Assessments (LMIAs) for businesses seeking to hire foreign workers in Canada. Whether you are an established company or a newly established venture, our dedicated team is here to guide you through the intricate process of securing an LMIA.

We understand that each business has unique requirements, and determining whether an LMIA is the right solution for your specific needs is crucial. To explore your options and discuss how we can assist you in navigating the LMIA process effectively, we invite you to book a consultation with us. Together, we can assess your situation, address your concerns, and work towards achieving your employment goals while ensuring compliance with Canadian immigration regulations.

Contact Arsheen Devjee Immigration Services today, and let us help you make informed decisions for a successful workforce strategy in Canada.

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