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4. Barriers to investment
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4.1 Barriers to investment access

Though Canada encourages foreign investment, there are laws and administrative policies which restrict foreign access to and ownership in sectors deemed sensitive, such as fishery, nuclear industry, transportation, etc. For instance, foreign investors are not allowed to have a majority ownership of businesses in the energy or mining sector. With regard to fishing, foreigners can own up to 49 percent of companies that hold Canadian commercial fishing licenses. Although the Canadian government is relaxing control and restrictions on certain sectors according to its WTO commitments, various investment restrictions maintained at provincial level still have an adverse effect on foreign investors. Several provinces regulate the sale and ownership of land with respect to foreign owners, largely in the agricultural and recreational sectors.

4.2 Barriers to investment withdrawal

No restrictions are imposed on withdrawing investment or repatriation of profits on the part of the foreign investors. However, if the foreign investor enjoyed preferential entry policies granted by the government and were committed to a period of investment, the investor is not allowed to withdraw investment within the committed period unless benefits gained from the preferential policy are returned. Income and profits earned by the foreign investor in terms of Canadian dollars can be exchanged into US dollars or any other convertible currency and repatriated abroad. But before repatriation, a withholding tax of 10 percent shall be paid to the Canadian government. Non-Canada citizens should pay to the government an income tax of 25 percent on such items as dividend, interest, salary, bonus and service charges like commission. However, such tax can be reduced to 15 percent, 10 percent, 5 percent and even exempted according to different bilateral agreements.

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