A Cross-Border Investment Guide

Private capital investment is a critical component of the global innovation ecosystem. Canada offers private investors a strong regulatory banking framework, welcoming immigration policy, ease of starting a business, political stability, protection of minority investors, and low business costs for R&D-intensive sectors.

Vancouver – with its thriving tech sector and startup ecosystem – is a key gateway into investing in Canada’s innovation economy. Furthermore, its proximity to Silicon Valley and major tech hubs along the rest of the Cascadia Innovation Corridor, and to prominent financial centres in the Asia Pacific, connects Vancouver startups and investors alike to global markets.

Get to know the ins and outs of investing in Vancouver

American investors collectively account for the greatest share of private capital in Vancouver’s innovation economy. This guide seeks to streamline the investment process by collating the legal and tax considerations necessary for cross-border investment. While this resource focuses on Canadian and American examples, all other international investors are equally likely to benefit from this guide.

Highlights of investing in Vancouver:

• Vancouver startups have the proven ability to rapidly develop valuable IP and build early relationships with both financial and strategic buyers. This translates to quicker exits and earlier returns.
• Strong early-stage and R&D funding support by provincial and federal levels of government help drive investor confidence and augments private capital contributions.
• Vancouver’s concentration of home-grown talent, cluster of leading academic and research institutions, and ready access to qualified global professionals are powerful assets in the development of new ideas and solutions in traditional and emerging technology sectors alike.
• And more!

COVID-19 economic measures and support

In the wake of COVID-19, the Government of Canada and Province of British Columbia took historic measures to support the economy, including multiple stimulus programs.

Additionally, the Business Development Bank of Canada (BDC) has announced numerous measures to support Canadian business through the Business Credit Availability Program.

Notably for investors, the BDC Capital Bridge Financing Program may match – with a convertible note – financing for eligible Canadian startups. A qualified investor must have a fund size of CA$10 million and invested in three Canadian companies. They must also have third-party limited partners and at least one institutional investor.
 

Looking for more information about investing in Vancouver?

Are you a US investor interested in organizing an event on cross-border investment for your angel group or other investor networks? The Vancouver Economic Commission has hosted dedicated events with Deloitte and Fasken featuring panel discussions and moderated Q&A sessions with the writers of the guide.

Those looking for more information on such events may reach out to Shivam Kishore (skishore@vancouvereconomic.com) and Courtney Crichton (ccrichton@vancouvereconomic.com) for more details.
 

Method and Acknowledgments

This guide was developed through in-house research and expertise leveraging data from Pitchbook and related sources, with taxation and legal expertise from Deloitte and Fasken.