Candidates Must Be Active In Start-Up Visa Business Or Have Canada Permanent Residence Application Denied

Candidates Must Be Active In Start-Up Visa Business Or Have Canada Permanent Residence Application Denied
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Start-Up Visa candidates can have their application for Canada permanent residence rejected if the government believes they have not been active enough in their business.

Case law has shown that candidates who do not commit to business development will not be approved for permanent residence.

The obligation becomes much higher if a candidate is an essential applicant who obtained a Canada work permit on behalf of the business.

If the government believes the only intention of an applicant is to secure permanent residence, this is also grounds for the refusal of an application.

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Even candidates who do not choose to come to Canada on a work permit through the Start-Up Visa must still show they have developed their business from overseas.

Candidates who thought they only needed a letter of support from a designated angel investor, venture capital fund or business incubator are mistaken.

They must show that their project is thoroughly planned and have conducted certain groundwork, where it is possible to do so.

This can include securing intellectual property and letters of intent for potential sales, developing prototypes of the business, developing websites and other meaningful undertakings. 

Showing incremental progress of the business during the application process is highly recommended.

Start-Up Visa Numbers Growing

In the first nine months of this year, 465 new permanent residents came to Canada under the SUV, putting the program on track to welcome 620 entrepreneurs to the country by the end of the year based on the current trends.

That would be 235 new permanent residents, or more than 61 per cent, more than the 385 who came to Canada under the SUV in 2021, a record-breaking year for immigration to Canada.

It would also be 105 new permanent residents, or 20.4 per cent, more than the 515 entrepreneurs who set up businesses in Canada through the SUV in 2019, the last full year before the pandemic.

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With its relatively small number of arrivals, the SUV sees big percentage fluctuations from month to month but has been generally growing in popularity over the past eight years.

In 2015, the SUV welcomed only 55 new permanent residents to Canada. This year, it is expected to allow more than 11 times as many to set up business here.

However, this is expected to dramatically increase over the next three years, as IRCC has allocated substantially more planned admissions for permanent residence to start-up visa applicants.  Whereas this number has only been 1,000 per year during the past few years, in 2023, 2024 and 2025, this number will increase dramatically to 3,500, 5,000 and 6,000 respectively.

Canada’s Start-Up Visa: Requirements

Applicants to Canada’s Start-Up Visa program must meet four basic eligibility requirements:

  1. Have a qualifying business;
  2. Obtain a commitment from a designated entity in the form of a Commitment Certificate and Letter of Support;
  3. Have sufficient unencumbered, available and transferable settlement funds, updated each year (the requirements identical to those for skilled workers);
  4. Demonstrate sufficient proficiency in English or French through standardized testing (Canadian Language Benchmark level 5) ;

The required commitment from a designated entity must meet the following criteria:

  • A designated angel investor group must confirm that it is investing at least $75,000 into the qualifying business, or two or more commitments from designated angel investor groups totaling $75,000; OR
  • A designated venture capital fund must confirm that it is investing at least $200,000 into the qualifying business or two or more commitments from designated venture capital funds totaling $200,000; OR
  • A designated business incubator must confirm that it is accepting the applicant into its business incubator Program.

In order to qualify, the intended business must be incorporated and carrying on business in Canada at the time the commitment is made and:

  • The applicant owns a least 10 percent of the voting rights in the corporation; AND
  • No other person holds 50 percent or more of the total amount of voting rights in the corporation.

Up to five applicants may have their application for permanent residence supported by the same business investment. However, certain applicants may be designated essential to the intended business. If any of the essential applicants withdraw their application or are refused for other reasons, all other applicants under the same business investment will see their applications terminated.

Applicants who have secured a Commitment Certificate from a designated entity, and who wish to begin working in the business during the processing of their permanent residence application may be able to apply for a short-term work permit

To receive a work permit, an applicant must provide:

  • A letter of support from the designated entity; and
  • Proof they have sufficient funds to meet the low-income cut-off (LICO) for their family size, for one year.

To receive permanent residence, the following criteria must be met:

  • Applicants must be actively involved in the management of the business within Canada;
  • The operations of the business, or an essential part, must take place in Canada; and
  • The business must be incorporated in Canada.
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