Start-Up Visa: How Immigrant-Founded Businesses Are More Likely To Expand And Create More Jobs

By
Colin Singer
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Start-Up Visa: How Immigrant-Founded Businesses Are More Likely To Expand And Create More Jobs
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Canada immigration news: Businesses started by immigrants or their children account for more than a third of Canada’s entrepreneurship – and those immigrant-owned businesses tend to grow faster and create more jobs, reports the Innovation Economy Council.

In Relocation Nation: How Immigrant Tech Founders Boost Canadian Innovation, the organization reports these immigrants and their children create 34.7 per cent of all start-ups in Canada.

Read More Canada Immigration News

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That’s a bigger chunk of Canada’s start-up ecosystem fueled by immigrants than in most economies in the European Union, G7 or G20 countries.

“Immigrant-owned firms in Canada are younger on average than those owned by Canadian-born entrepreneurs, which means they tend to grow faster and have higher rates of job creation,” notes the Innovation Economy Council in that report.

Start-Up and Entrepreneur Programs Welcome 455 New Permanent Residents

“Also, research has shown that immigrant-owned businesses are more likely to enter global markets, and that immigrant entrepreneurs ‘can mobilize their diverse socio-cultural networks in helping to overcome market-size limitation and commercialize innovations in the world market, either through export or transnational new ventures.’”

Immigration, Refugees and Citizenship Canada (IRCC) figures show 455 new permanent residents settled in Canada through Entrepreneur or Start-Up Visa (SUV) programs last year. 

The Innovation Economy Council thinks Canada should be doing more to attract entrepreneurs from around the world.

“Given their disproportionate economic potential, we need to work to attract and retain the most promising immigrant entrepreneurs and their ventures,” states the organization’s report. “With Canadian help and resources, they can scale up, attract capital and create jobs here for the benefit of all.”

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Canadian immigration officials agree.

Then-Immigration Minister Marco Mendicino demonstrated his enthusiasm for immigrant entrepreneurs last June in a tweet.

“Coming out of the pandemic, the clear message we are sending with the Start-up Visa Program is that Canada is open for business,” he tweeted.

Through the SUV program, Ottawa offers both the flexibility to start a wide variety of businesses and the opportunity to gain permanent residency in Canada for foreign nationals.

Start-Up Visa Criteria

To receive permanent residence in Canada, the following criteria must be met under the Start-Up Visa Program:

  • 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.

Canada’s Start-Up Visa program does not apply to applicants who intend to reside in the province of Quebec.

Successful candidates to the Canadian Start-Up Visa Program receive a letter of support from a government-designated entity (angel investor group, venture capital fund or business incubator). 

The government-designated entity is primarily responsible to determine the viability of the applicant’s intended business and present an approved project along with a Commitment Certificate to immigration authorities. Applications are assessed on a pass-fail basis. See the list of designated entities.

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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 are identical to those for skilled workers);
  4. Demonstrate sufficient proficiency in English or French through standardized testing (Canadian Language Benchmark level 5);

Designated Entities Must Invest In Or Welcome New Business Into Incubator Program

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 CAD into the qualifying business, or two or more commitments from designated angel investor groups totaling $75,000 CAD, or;
  • A designated venture capital fund must confirm that it is investing at least $200,000 CAD into the qualifying business or two or more commitments from designated venture capital funds totaling $200,000 CAD, 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 per cent of the voting rights in the corporation, and;
  • No other person holds 50 per cent 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 apply for a short-term work permit on the basis of their Commitment Certificate if the designated entity supports such a request.

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.

Applicants Must Manage The Business To Get Permanent Residence

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.

Canada’s Start-Up Visa program does not apply to applicants who intend to reside in the province of Quebec.

Designated entities that may support an application under the Start-Up Visa program are:

Designated venture capital funds

Designated angel investor groups

Designated business incubators

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