No hope to succeed: a Chinese business investor in PEI
“If you ask me if I expect that my business startup in PEI (Princess Edward Island) going to be successful, the answer is, absolutely not,” said Mr. Yu, whose family arrived in PEI in 2011 under the provincial nominee program of PEI.
PEI’s PNP program requires applicants to make a $100,000 deposit and $150,000 investment into a local business, in exchange for them to obtain a provincial residency. The investment oriented initiative follows a similar premise as the national wide investor immigration program under the federal government – which rewards permanent residency, and eventually, the grand prize of citizenship to wealthy foreigners willing to invest in a Canadian business.
Under the PNP program of PEI, immigrants coming in under this program had to start a business or buy a stake in an Island company, pumping hundreds of millions of dollars into the local economy. The island has touted two key positives: rising investment and a growing populace.
But the PNP initiative, as well as the federal investors’ immigration program, has been criticized for allowing wealthy foreigners to “buy” their way into the country.
As China’s economy continues to grow rapidly, more Chinese people have deeper and deeper pockets. But the increasingly polluted environment, the challenges faced in the Chinese education system, and the financial instability in China have sparked their desire to escape the country, and the Canada’s investor immigration programs has been the appealing and promising choice.
But the investor immigrants – mostly Chinese elites – were alleged of “neither investing nor immigrating” in Canada. Too many of the investors had little real connection to this country, and neither did their money. The federal government abolished the program in Feb 2014.
After $200,000 in legal and agent fees, and putting down the required amount of deposits, Yu’s family application for immigration was approved and his family arrived in July 2012.
At the time of his application, Yu understood that whether he could get his $100,000 deposit back depended on the survival of his proposed business – a company that would sell sport utility products to PEI’s corporations. But Yu, along with hundreds of his peers arriving in Canada since 2011, have found it extremely difficult, if not impossible, to start a business in this isolated island that was under a completely different cultural, language and business environment from his home country.
“Business success depends on many cooperating factors – opportunities, connections and owners’ skills all play a part. But frankly speaking, we lack almost all these factors that would make a successful business in PEI.”
When asked whether his proposed company has made any profit, he quickly snapped, “Absolutely not! Not even close!”
Aside from spending $1000 on rent each month and purchasing a $150,000 business registration, Yu barely has any idea of how to capitalize on the potential market, let alone making any sales.
“The language barriers are a huge challenge for us,” says Yu.
Although he achieved the program required English proficiency by scoring 3.5 in IELTS English test, Yu believes that his English skills are far below the level required for establishing a business or communicating with local Canadians.
To establish a business in a very matured and established market, a strong business connection with potential clients are the key. But the language deficiency significantly hinders his ability to penetrate a market made up by the English population.
“Discussing about potential business opportunities start from small talks with customers. But my English skills are not enough to carry out a conversation – never mind trying to close a business deal.”
Hiring a local Canadian may help the company to explore market opportunities, but he lacks the basic language skills to communicate with a Canadian employee.
“In my view, it takes at least 5 years to obtain the required language skills.”
And Yu says he is not alone. Almost all Chinese immigrants in PEI lack the language skills that allow them to conduct business activities.
“Only some small businesses run by the Chinese investors such as restaurants are able to survive,” says Yu. “But how many restaurants can you open in such a small island?”
In one year, his sports utility company will be up for a government audit. If his business fails this process, he will forfeit his deposit.
But Yu has already braced for this eventuality. “I am ready to forgo that deposit,” said Yu.
Meanwhile, Yu still has to pay bills to support his whole family, which includes a $1000 rent for his 3-bedroom apartment, and $400 for food per month. So where is the money going to come from?
Yu reveals that he has another business in China that focuses on international trade – exporting pet products from China to foreign countries. And ironically, his family’s livelihood in PEI relies on this business in China while his startup business in PEI shows no promising future.
“This business in China can bring a stable cash flow into the family coffers,” says Yu. “That is why I can afford to have the business in PEI scrapped.”
But what Yu planned to give up is not only his business but also the province of PEI that served as a launch pad for his family’s immigration journey.
“We definitely will leave PEI and come to either Vancouver or Toronto, and many of our PEI friends will probably follow suit.”
Government information shows that many newcomers like Yu were willing to forgo the deposit in order to leave the province promptly, raising concerns about the problematic program. As the federal government no longer accepts investor immigrants to the country, it’s just a matter of time that the PNP program of PEI – which seems failing in its core objectives -- will also close its doors to the Chinese riches.
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