Candidates applying for a visa to start a business in Canada may be rejected if the government considers that they have not been active enough in their business.
Jurisprudence shows that applicants who do not demonstrate a commitment to business development will not be approved for permanent residency.
The obligation becomes much greater if the candidate is an essential applicant who has obtained a work permit in Canada on behalf of the company.
If the government believes that the sole intention of the applicant is to secure permanent residency, this is also grounds for rejecting the application.
Canada will dramatically increase admissions of entrepreneurs under the Startup Entrepreneur Visa Program
Canadian start-up visa for newcomers almost triples this year compared to 2021
Record number of new immigrants arriving in Canada on entry visa
Even applicants who choose not to come to Canada on a work permit on a Starter Visa must still demonstrate that they have developed their business abroad.
Candidates who thought they only needed a letter of support from a designated business angel, venture capital fund or business incubator are wrong.
They must demonstrate that their project is carefully planned and have done some preparatory work where possible.
This may include securing intellectual property and letters of intent for potential sale, developing business prototypes, web development, and other significant endeavors.
It is highly recommended to show the company’s incremental progress during the application process.
Growing number of visas for start-ups
In the first nine months of this year, 465 new permanent residents arrived in Canada on an SUV, making the program poised to welcome 620 entrepreneurs into the country by the end of the year based on current trends.
That would mean 235 new permanent residents, more than 61 percent more than the 385 who came to Canada by SUV in 2021, a record year for Canadian immigration.
That would also be 105 new permanent residents, up 20.4 percent from the 515 entrepreneurs who set up businesses in Canada via an SUV in 2019, the last full year before the pandemic.
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With relatively few arrivals, the SUV has seen large percentage fluctuations from month to month, but has been gaining ground overall over the last eight years.
In 2015, the SUV welcomed only 55 new permanent residents to Canada. This year, it is to allow over 11 times more people to set up a business here.
However, this number is expected to increase dramatically over the next three years as the IRCC has allocated significantly more planned permanent residency admissions to start-up visa applicants. While in the last few years this number has been only 1,000 per year, in 2023, 2024 and 2025 this number will increase dramatically to 3,500, 5,000 and 6,000 respectively.
Canada Business Start Visa: Requirements
Applicants for a Canada entry visa must meet four basic eligibility requirements:
- Have a qualifying company;
- Obtain a commitment from the designated entity in the form of a Certificate of Commitment and Letter of Support;
- Have sufficient, unencumbered, available and transferable clearing funds, updated annually (requirements same as for skilled workers);
- Demonstrate sufficient proficiency in English or French through standardized tests (Canadian Language Benchmark Level 5);
The required commitment from the indicated entity must meet the following criteria:
- Designated Angel Investor Group must confirm that they are investing at least $75,000 in qualifying business or two or more of the Designated Angel Investor Group’s commitments totaling $75,000; OR
- The nominated venture capital fund must confirm that it invests at least $200,000 in qualifying business or two or more commitments from the nominated venture capital funds totaling $200,000; OR
- The designated business incubator must confirm that it is accepting the applicant into its Business Incubator Program.
To qualify, the intended company must be incorporated and operating in Canada at the time of the commitment, and:
- The applicant owns at least 10 percent of the voting rights of the corporation; AND
- No other person holds 50 percent or more of the total voting rights in the corporation.
Up to five applicants can receive a permanent residence permit application supported by the same business investment. However, some candidates may be designated as necessary for the intended activity. If key applicants withdraw their applications or are rejected for other reasons, all other applicants under the same business investment will be closed.
Applicants who have obtained a Certificate of Commitments from a designated entity and who wish to start working for the company while their application for permanent residence is being processed may apply for a short-term work permit
To obtain a work permit, the applicant must provide:
- Letter of support from the designated entity; and
- Proof that you have enough resources to meet the Low Income Threshold (LICO) for your family for one year.
To obtain permanent residence, the following criteria must be met:
- Candidates must be actively involved in managing a company in Canada;
- The company’s operations or a substantial part of it must be located in Canada; and
- The company must be registered in Canada.