What is an “accredited investor” or “eligible investor”?

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There are several ways to qualify as an Accredited Investor in Canada. Below are the most commonly relied upon definitions for Canadian investors:

  • an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities exceeding $1,000,000; or
  • an individual who, either alone or with a spouse, has total net assets of at least $5,000,000; or
  • an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or an individual whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;

To be an Eligible Investor under an Offering Memorandum Exemption, you would need to meet one (not all) of the below requirements:

  • an individual who, either alone or with a spouse has net assets of at least $400,000; or
  • an individual whose net income before taxes exceeded $75,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $125,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year

To read a detailed list of all possible exemption definitions, as defined by National Instrument 45-106, please visit the Ontario Securities Commission (OSC) website.