Canadian Visa Options for a Foreign Entrepreneur
Canada welcomes immigrants who have the skills and potential to build a successful business in Canada. There are several programs at the federal and provincial levels that cater specifically to business persons. We’ll detail those opportunities in this article.
- Canada’s startup ecosystem
- How to set up a company as a foreigner
- Canada relocation options for Entrepreneurs
- Who can apply for PR under the Start-Up Visa Program?
- How to find financial support for your startup in Canada
- How to apply for PR under the Start-Up Visa Program
- Provincial Nominee Program options for Entrepreneurs
- Visa Options for Entrepreneurs in Quebec
- Temporary residence options for Entrepreneurs in Canada
- FAQ
- We can help
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Startup
A startup is usually thought of as a new business that applies an innovative solution to a problem and has the potential to scale up to become a financially viable venture. The innovation can be a product or service, process, or business model. The number of Canadian startups has grown impressively over the past few years. In 2020, more than 20,000 companies were established in Canada. Correspondingly, the number of startup immigrants (immigrants who are involved in a startup as a founder or early employee) has also increased. The number of startup immigrant applications for permanent residence in Canada has grown from only 160 applications in 2015 to 1,173 applications in 2019, before dipping to 719 in 2020, a decrease caused by the COVID-19 pandemic. The largest number of immigrant entrepreneurs come from Iran, Vietnam, India, and China.
Tax incentives
One reason for such a boom in the startup field is that there are many tax incentives for companies establishing a business in Canada, at both the federal and provincial level. There are over 200 such business benefits; of these, the most notable federal ones are:
- Scientific research and experimental development tax incentive: This program has been developed to encourage Canadian businesses of all sizes and in all sectors to conduct R&D in Canada. It provides financial incentives in the form of tax credits at 15% and 35% of qualified expenditures.
- Apprenticeship Job Creation Tax Credit: This is a non-refundable investment tax credit equal to 10% of salaries and wages paid to eligible apprentices hired by the business.
There are several credits at a provincial level as well. Many are related to companies that operate in the tourism or agriculture sector.
Canada has three common entity types for foreigners looking to register a Canadian business:
- Corporation (Federal or Provincial/Territorial),
- Partnership, and
- Sole Proprietorship.
The registration procedure for foreigners consists of the following key steps:
- Choose an available company name: Before registering your business, you will need to conduct a name search to make sure the name chosen for your business is not similar to existing company names. You can conduct this research via the Canadian corporate names and trademarks database (Nuans).
- Register the company name: If you are a sole proprietor operating a business under your legal name (for example, Alex Dune), you generally do not need to register your business name. In all other scenarios, you must register the company name with the government.
- Register your business with the government: You should prepare a set of the required documents and register your company with the government before you start operating your business. You also must apply for a business number. You can register your company at either the federal or provincial level. There are pros and cons of each type of registration. You should also be aware that each province or territory in Canada may have specific requirements that vary from other provinces.
- Get business permits and licences: You may be required to obtain additional permits based on your business location, industry, and conducted activities.
- Get business support and financing: If you need any kind of financial support you may apply for one of the national or regional business support programs.
You can find out more details in our article on how to incorporate a company in Canada.
Canada welcomes immigrant entrepreneurs who have skills and potential to build a successful and innovative business in Canada. A federal government immigration program offers permanent residence to such newcomers through the Start-Up Visa Program, which is managed by the federal agency called Immigration, Refugees, and Citizenship Canada (IRCC).
The Start-Up Visa Program
The Start-Up Visa Program (SUVP) is the main path for entrepreneurs who want to immigrate to Canada and start a business anywhere in the country. This program targets newcomers who:
- Have an innovative business idea;
- Can create jobs for Canadians; and
- Can compete on a global scale.
There are also sets of requirements for both:
- An entrepreneur immigrant, and
- The business itself.
Note that you may apply as an individual entrepreneur with your business ideas or you may apply as a group of up to five entrepreneurs with innovative ideas.
Requirements for an entrepreneur immigrant
To be eligible for the Start-Up Visa program you must:
- Meet the language requirement: You must meet the minimum level of the Canadian Language Benchmark (CLB) that is 5 in either English or French in speaking, reading, writing, and listening. You must take language tests approved by the IRCC. Here are equivalency charts between CLB and other approved tests.
- Get a Letter of Support from a designated organization: The Letter of Financial Support from a designated organization must come from a business group that has been approved to invest in or support possible startups. The process to pitch your idea is different for each organization. Each organization has its own requirements.
- Have enough money to settle in Canada: The government does not provide any financial support to new start-up visa immigrants. You will need to provide proof that you have enough money to support yourself and your dependents who come to Canada with you. The amount of money you need depends on the size of your family that will accompany you to Canada. These amounts are updated every year by the IRCC.
- Have a qualifying business: There is a set of conditions that your business must meet to qualify for the Start-Up Visa Program.
Requirements for the business
Your business is qualified if it meets the following two conditions:
- At the time you receive a Letter of Support from a designated donor organization,
- You or each applicant (if you apply as a group of entrepreneurs) must hold at least 10% or more of the total voting rights attached shares of the corporation;
- You or each applicant, together with the designated organization, jointly hold more than 50% of the total voting rights attached to all shares of the corporation outstanding at that time;
- At the time you receive your permanent residence status:
- The business must be incorporated in Canada;
- An essential part of the operations of the business must occur in Canada; and
- You must provide active and ongoing management of this business from within Canada.
To be eligible for the Start-up Visa Program, your startup idea or venture must receive financial support from one or more of the designated Canadian organizations. Designated organizations are business groups that have received a special permit from the federal government to invest in or support possible start-ups via the Start-Up Visa Program. The list of such organizations is quite large. Designated organizations include:
You must apply for financial support to such organizations. They will pick the business proposals they decide to review. Each donor has its own intake process for proposals and criteria used to assess them. For example, you may be asked to present your business concept in person or submit a detailed business plan. If your application for financial support is approved, you will be issued a Letter of Support. You need to include this Letter when you submit your application to the IRCC.
What is a Letter of Support?
A Letter of Support is an official document issued to an applicant by the designated venture capital fund or angel investor group. It constitutes proof that the candidate will get financial support for their business idea.
Please note that to become eligible for the Start-Up Visa Program, varying sums of money are required from different types of designated organizations:
- Venture capital funds: You must get at least one designated fund to agree to invest a minimum of CAN $200,000 in your start-up;
- Angel investor groups: You must get one or more investors connected to the designated groups to agree to invest a minimum of CAN $75,000;
- Business incubators: You must be accepted into one of the designated incubator programs.
Here is a step-by-step guide to the Start-Up Visa Program application process:
- Find financial support from designated Canadian organizations: You must receive a Letter of Support from such organizations to prove your financial stability.
- Pay your application fees: All required fees must be paid online.
- Gather all required documents: You must include all the forms, supporting documents, signatures, language test results, and proof of payment of the processing fees. If any are missing, your application will be incomplete and, as a result, rejected.
- Submit the application and wait for approval: Your application must be sent only by mail or courier. If your application is approved, you will be issued a permanent resident visa. This visa includes your Confirmation of Permanent Residence (COPR) and your entry visa.
Please note that while your application for permanent residence is being processed, you can apply for a special Temporary Work Permit to get to Canada and start building your business even faster.
Many Canadian provinces and territories offer permanent residence immigration programs for entrepreneurs. The entrepreneur must want to settle and launch a business in their province through a set of Provincial Nominee Programs (PNP). Some provinces have more than one PNP stream for business people.
In general, most provinces or territories require that an applicant has a net worth of at least CAN $500,000 and is willing and able to establish, invest in, or acquire a business in Canada that will create or maintain employment in Canada. Other requirements can vary by province. For example, sometimes three years of business experience is also required. Some provinces admit entrepreneurs only in a particular field, such as agriculture.
Please note that, typically, if you apply for PR in a particular province or territory, you must live there for a certain period. Below is a brief overview of PNP programs for entrepreneurs in some select provinces:
Immigration to French-speaking Québec is a shared jurisdiction between the government of Québec and the government of Canada. Thus, the immigration process for entrepreneurs in Québec differs from that of other provinces and territories. Immigration to Québec is a two-stage process:
- First, you must apply to the government of Québec for the Québec Selection Certificate (QSL);
- After receiving your QSL, you apply to IRCC for permanent residence.
There is a special immigration program for persons interested in coming to Québec to establish or acquire a business. It is called the Quebec Immigrant Entrepreneur Program. There are two streams under this program:
- Stream 1: This stream is for candidates who have already received an offer from a business accelerator or incubator or a university entrepreneurship center. Candidates can carry on the business alone or with up to a maximum of three other foreign nationals who have submitted applications for permanent selection as entrepreneurs for the same business.
- Stream 2: To qualify for this stream, the applicant must control at least 25% of the shares of a new business, or at least 51% of an acquired business, which must have a value equivalent to or higher than the funds needed to start the business project. Candidates also must prove that they have legally acquired a net worth of CAN $900,000, alone or with their spouse, if applicable.
After a candidate submits an application for the QSL, the application is assessed on factors such as:
- Applicant’s age;
- Level of education;
- Language skills;
- Financial self-sufficiency;
- Adaptability.
If the result of the application assessment is positive, a candidate will receive the Québec Selection Certificate by mail. After receiving the QSL, a candidate must submit an application for permanent residence to IRCC, the federal department responsible for immigration affairs.
You may run across information describing a Business Visitor Visa for entrepreneurs who want to come to Canada to conduct international business affairs. This is not a correct usage of such a term, as there is no special visa for business visitors to Canada. Business visitors have to follow the standard application procedure for a Visitor visa or eTA, and will need to indicate that they are entering Canada for international business activities. This type of visa is for those who need short-term stays in Canada for business activities such as industry conferences, site visits, or training.
However, if you need to work in Canada, you must apply for a Work Permit. There are two types of Work Permit for entrepreneurs:
- Temporary Work Permit for entrepreneurs who have applied under the Start-Up Visa Program: This type of Work Permit allows applicants for PR under the SUVP to get to Canada and start building their business before their PR application will be approved.
- Temporary Work Permit: All other entrepreneurs who want to work in Canada must apply for a standard Work Permit.
Special Temporary Work Permit
Foreigners who have received a Letter of Support issued by a designated organization and apply for a PR under the SUVP may be considered for a short-term work permit. The designated entity must also support the request for a Work Permit.
This Work Permit allows applicants to work as an entrepreneur only in the development of their own business, as indicated in the Letter of Support. It is not an Open Work Permit.
Such a Work Permit will be valid for only one year, to allow applicants to begin working in Canada while their application for permanent residence under the SUVP is being processed.
If you are interested in exploring an entrepreneur immigration route, we can help you with the process from start to finish. We will explain how the process works and calculate your points and assess your eligibility. We will ensure that your applications are filled accurately and completely, to improve the likelihood of success. Contact us; our team of experts will be glad to assist you in your quest.
If you are unsure about your likelihood for success, contact us for a free evaluation. We will give you a realistic assessment of your chances of success and assist you in developing a strategy for a successful outcome. We can guide you on how to avoid pitfalls and improve your chances of obtaining permanent residence in Canada as an entrepreneur.