Small Business Investor Tax Credit Program

Who can apply

A fee of $100 applies to each application for registration under the program.

A fee of $25 applies to each investor tax credit certificate requested.

Eligible business sectors

All business sectors in New Brunswick are eligible to participate.

Applicant corporation eligibility criteria

To register in the Small Business Investor Tax Credit program, the applicant corporation must meet the following criteria:

1. the corporation must be a private company
2. the corporation is incorporated or registered to carry on business in New Brunswick
3. the corporation must have authorized capital consisting of shares without par value
4. the corporation must have net tangible assets less than $50 million (including associated corporations)
5. all, or substantially all, of the corporation’s assets and income must be used to generate active business income in New Brunswick
6. the corporation must pay, in each of the four years after the date of registration, at least 75% of its wages and salaries to individuals who are residents of New Brunswick unless the corporation exports outside of N.B. more than 50% of their goods and services, then, the requirement is for 50% of its wages and salaries to individuals who are resident of New Brunswick
7. the corporation is not lending money, providing a loan guarantee or any other financial assistance, to a person for the purchase of shares included in a specified issue under the Small Business Investor Tax Credit Program
8. that the issued shares or convertible debentures will not be purchased by investors who have disposed of shares or convertible debentures of the corporation after Dec. 10, 2002, and before the proposed share issuance
9. the shares to be issued are newly issued, fully paid shares of the capital stock of a corporation that is registered under the Small Business Investor Tax Credit Act and will not include a replacement share, and includes a convertible debenture if the convertible debenture is newly issued as part of a specified issue

Investor eligibility

The total investment by an individual investor shall be not less than $1,000, and by a corporation and trust investor not less than $50,000.

To receive a Small Business Investor Tax Credit, an individual investor must be 19 years of age or older and be a New Brunswick resident. For a corporation and trust investor, the corporation or the trust must have a permanent establishment in New Brunswick.

Shares or convertible debentures may be purchased, held or disposed of by a qualifying trust for an investor.

An investor is required to hold the investment for a minimum of four years.

An investor may not use financial assistance from any government, municipality or public authority in the acquisition of these shares.

The maximum annual investment for which a tax credit certificate will be issued to an individual investor under this program is $250,000 for non-strategic sectors or $1,000,000 for investors who invest in strategic sectors and for a corporation or trust investor; it is $500,000 for non-strategic sectors and $1,000,000 for investors who invests in strategic sectors.

Investment eligibility

The applicant corporation, community economic development corporation or association will raise capital of not less than $10,000.

The minimum number of investors is three.

An investment may be made within the first 60 days of a calendar year and may be claimed as a tax credit in the prior taxation year for an individual investor.

A replacement share is not eligible. A replacement share is a share or convertible debenture purchased by an investor who disposed of any other share or convertible debenture of the corporation at any time after December 10, 2002 for a corporation and after February 4, 2014 for a community economic development corporation or association, and before the date of the investment.

Eligible investments do not include shares or convertible debentures that, in the opinion of the Minister of Finance, were or will be issued with the main purpose to claim the tax credit.