Manitoba Small Business Venture Capital Tax Credit Program (SBVCTC)

• Application template.
• Most recent annual financial statements and year-to-date financial statements from within the past three months.
• Most recent income tax return and Notice of Assessment issued by Canada Revenue Agency.
• Articles of Incorporation and any amendments, current share registry, and unanimous shareholder agreements if applicable.
• Summary of the business, including current business activities and proposed use of raised share proceeds, and a start-up letter from legal counsel or an accountant for start-up businesses that have not completed a full year of business.

Who is eligible?

• Manitoba taxpaying individuals.
• Manitoba taxpaying corporations.

Who is not eligible

• Businesses whose principal activity is a regulated professional service.
• Businesses primarily involved in real estate, resource extraction, farming, or fishing.
• Businesses operating restaurants, lounges, bars, amusement, or gaming activities.
• Businesses providing education, health care, social, or similar services.
• Reporting Issuers as defined in The Securities Act (Manitoba).

Eligible expenses

The SBVCTC proceeds must be used for approved purposes within three years from the date of issuance.

Ineligible Costs and Activities

• Professional services regulated under Manitoba law
• Management, financial, or administrative services
• Real estate, oil and gas, and mineral activities
• Farming, fishing, hunting, and similar activities
• Franchises, restaurants, lounges, bars, amusement, gaming, education, health care, or social services

Eligible geographic areas

• Manitoba

There are no explicit evaluation and selection criteria outlined for the Small Business Venture Capital Tax Credit program. However, applicants must meet several eligibility requirements to issue shares under the program.

• A Canadian Controlled Private Corporation (CCPC) with a permanent establishment in Manitoba;
• All or substantially all assets used in active business;
• All or substantially all revenue generated from active business;
• At least $25,000 cash equity already invested;
• An annual revenue of less than $15 million or less than 100 full-time equivalent employees;
• At least 25% of employees reside in Manitoba;
• Not a Reporting Issuer as defined in The Securities Act (Manitoba);
• Previously issued less than $10 million in eligible shares either on its own or combined with an affiliated company.

• Collect and prepare the required documents.
• Fill out the application template, ensure all question boxes are answered, and enclose all supporting documents.
• Submit the application and all documents to MINTprograms@gov.mb.ca.
• If the application is approved, the lawyer or legal representative works with SBVCTC administrators to obtain authorization to issue tax credit receipts for each share issuance round during the company’s approval period.

• Applications are reviewed and approved by the program administrator.
• The review and approval process takes between four to eight weeks.
• The administrator may contact the applicant by email if more information is needed.
• If approved, the lawyer or legal representative works with SBVCTC administrators to obtain authorization to issue tax credit receipts.

The program's information includes details about required submissions, eligibility criteria, and penalties for non-compliance.

• Applications for the SBVC tax credit program can be submitted online or via email.
• An application must include recent annual financial statements, income tax return, notice of assessment, terms and conditions for shares, and a description of proposed use of proceeds.
• The program requires a minimum investment of $10,000 per investor while the maximum investment eligible for the tax credit is $500,000 per company.
• The tax credit is non-refundable and can be carried forward for up to ten years or back for three years.
• Shares must be held for a minimum of three years, during which prohibited uses include investing outside Manitoba or paying dividends to shareholders.
• Certain business activities such as professional services, leasing, and farming are ineligible for the program.
• Approved applicants must file an annual information return including financial statements and a questionnaire for program effectiveness evaluation.