Venture Capitalism in Canada
. It is a non-refundable tax credit that is equal to 20% of "qualifying" R&D expenditures (labour, material, R&D contracts, and R&D equipment) . Another 35% refundable tax credit is available to some Canadian-controlled private corporations (CCPCs) . Because the CCPC rules require a minimum of 50% Canadian ownership in the company performing R&D, global investors who would like to benefit from the larger 35% tax credit must accept a minority position in the company . Obviously this is not what most investors look forward to . The SR&ED program does not restrict the export of any technology or intellectual property that may have been developed with the benefit of SR&ED tax incentives . Canada also has a fairly unique form of venture capital generation in its Labour Sponsored Venture Capital Corporations (LSVCC) . These funds, also known as Retail Venture Capital or Labour Sponsored Investment Funds (LSIF), are generally sponsored by labor unions and offer tax breaks from government to encourage retail investors to purchase the funds . Generally, these Retail Venture Capital funds only invest in companies where the majority of employees are in Canada . However, innovative structures have been developed to permit LSVCCs to direct in Canadian subsidiaries of corporations incorporated in jurisdictions outside of Canada .