CANADA is preparing to raise the financial hurdle for entrepreneurs who hope to invest their way into landed-immigrant status, according to the country's immigration officials. Officially, the minimum sum needed to participate in Canada's immigrant-investor programme is C$250,000 (about HK$1.4 million). But that figure looks likely to jump by 40 per cent, to $350,000, at the end of the year. The changes - which include proposals to streamline the scheme and give the provinces greater discretion over how funds are used - originally were due to take effect on July 1. However, the large number of comments received during the consultation period forced a delay. The immigrant-investor scheme makes it possible for experienced business people to obtain an immigration visa in return for investing in approved venture-capital funds on not-very-attractive terms. Despite low returns and a general lack of guarantees, Canadian passports have proven a sufficient lure to make the programme a success - at least from the government's point of view. The scheme has attracted $3.75 billion in investment funds since its inception in 1986, and investors now account for about 3 per cent of total immigration to Canada each year. But the programme has not always been a dream come true for investors, some of whom have seen their capital disappear into thin air. The problems were severe enough to cause the federal government to impose a moratorium on new fund offerings from November 1994 to July 1996. Not surprisingly, bankers and fund distributors have been inventive in coming up with ways to reduce would-be immigrants' outlay and limit their risk. For a price, of course. For example, investors buying $350,000 notes in the Province of Ontario Immigrant Investor Infrastructure Fund - which has a term of five years, offers no guarantees and would, at best, pay interest at a simple annual rate of 2 per cent - can opt to put down only $125,000 and get the rest from a Canadian finance company. In return, they assign their rights in the note to the finance company, and their $125,000 goes to pay the interest on the finance company's five-year loan. The final cost is $125,000 less the time value of $225,000 - that is, the net cost is about $57,000, assuming the $225,000 is invested in a Canadian Government bond and dividends put in a savings account. The Royal Bank of Canada plans to take a slightly different approach to financing. Details will be announced in a month or so, but the basic idea is for the bank to offer a traditional loan covering 70 per cent to 80 per cent of the investment. The customer would pay off the loan at the end of the immigrant-investor commitment. In this case, the final cost would be the interest charges on the loan plus the opportunity cost on the down payment. For a $350,000 investment, the bottom line would be somewhere between $90,000 and $107,000, depending on the exact terms of the deal.