Immigrate to Canada under Startup – An easy way to receive a PR card for entrepreneurs

You will receive complete instructions on immigrating to Canada under the latest Startup category if you read the following article by ImmiPath.

The Startup Stream (SUV) allows foreign entrepreneurs to obtain permanent residency in Canada through business immigration.

Owners of innovative startups or established foreign companies can use this program to move to Canada permanently with other founding partners (up to 5 partners), provided they meet other program requirements.

If you are a foreign entrepreneur considering applying for the Canadian Startup immigration program, ImmiPath’s following guide is for you.

Reading the following article, you will find complete information about the program, including details not often found elsewhere on the Internet. ImmiPath has also included some helpful tips for succeeding in this program. So let’s see now!

1. What is the Startup Canada Immigration program?

The Canadian Startup Immigration Program helps immigrant entrepreneurs establish businesses in the land of Maple Leaves by allowing foreign business owners and their families to apply for permanent resident status.

While waiting for permanent residence, foreign entrepreneurs who have applied for the Startup Visa Program will be eligible for a temporary work permit, allowing them to come to Canada to launch their businesses.

Since launching as a pilot program in 2013, the Startup Visa Program has admitted hundreds of business owners to Canada, with intake numbers increasing every year. In 2017, the program became a permanent option for immigrant entrepreneurs looking to move to Canada.

As the Canadian economy continues to experience a period of sustained economic growth, the Start-up Visa Program is one of many immigration initiatives designed to help talented foreign workers find accommodation in the Canadian workforce.

The Canadian SUV immigration program offers entrepreneurs the opportunity to immigrate to Canada to establish a new business. Immigrant entrepreneurs must demonstrate that their business is original, will create new jobs for Canadians, and can compete on a global scale.

2. How to Qualify to Immigrate to Canada under the Start-up category?

Below is a list of requirements set by Canadian immigration authorities for entrepreneurs wishing to apply for permanent residence in Canada under the SUV program:

• Foreign nationals must receive a Letter of Support or Investment Commitment from one of the Designated Institutions in Canada
• Each foreign citizen must own at least 10% of the shares in the startup. The foreign national and their Designated Entity must together have more than 50% of the total shares (voting rights) in the startup venture
• Each candidate must meet minimum English or French language skills at CLB 5 level
• Each applicant must have enough finances to settle in Canada (minimum from $12,960 – $34,299, depending on the applicant’s family size)

In addition to the above, to be successful in this program, entrepreneurs also need to prepare to meet the following basic criteria:

• Ownership of an innovative or successful business that is generating scalable and sustainable revenue or has strong market validation
• Access funding for your startup, typically a minimum of around $200,000 per applicant
• Have highly specialized knowledge or unique experience in your field or have solid management experience
• Have English or French language skills at an intermediate level or higher

Read more: Should I immigrate to Canada?

3. Who Should Not Apply for a Canadian Startup visa?

Startup immigration to Canada is not a suitable program for foreign entrepreneurs with limited capital to invest in their startup venture in Canada.

One of the main requirements for the Start-Up Visa program is to obtain a letter of support or investment commitment from one of the Designated Organizations in Canada. The chances of receiving support from a Designated Organization are almost zero if you (or your company) do not have enough capital to invest in your venture.

Although the SUV program is advertised as having “no minimum investment”, in reality, your business needs to be well-funded to receive support from the Designated Institutions.

It is naive to believe that if you have a great idea, VCs or Angel Investors in Canada will invest in your venture and provide you with seed capital.

Venture capitalists and Angel Investors are always looking for great companies that have a history of growth and generating millions in revenue before they invest any money.

Therefore, if you are an entrepreneur with a great product or service and limited capital to grow your business (less than $200,000), the Startup Visa program may not be the right path for you.

4. Which organizations are designated for the Startup Canada immigration visa?

As part of the eligibility requirements, you will need to provide evidence (Certificate of Commitment and Letter of Support) that your business is supported by a designated organization.

These documents will contain details relating to your agreement with one or more nominated organizations and are paramount to your start-up visa application. Unlike federal and provincial investment programs, where applicants must invest their own capital.

Instead, those who meet the eligibility requirements must secure a minimum of $75,000 from a Canadian angel investor or a minimum of $200,000 from a Canadian venture capital fund recognized by the Canadian government. 

If the candidate is accepted into a recognized Canadian business incubator, no capital investment is required.

List of designated organizations:

4.1 Venture capital funds 

• 7 Gate Ventures
• BCF Ventures
• BDC Venture Capital
• Celtic House Venture Partners
• Extreme Venture Partners LLP
• Golden Venture Partners Fund, LP
• Impression Ventures
• Innovation Platform Capital International LP
• iNovia Capital Inc.
• Lumira Ventures
• Nova Scotia Innovation Corporation (o/a Innovacorp)
• Pangaea Ventures Ltd.
• PRIVEQ Capital Funds
• Real Ventures
• Relay Ventures
• ScaleUp Venture Partners, Inc.
• Top Renergy Inc.
• Vanedge Capital Limited Partnership
• Version One Ventures
• Westcap Management Ltd.
• Yaletown Venture Partners Inc.
• York Entrepreneurship Development Institute (YEDI) VC Fund

4.2 Angel Investment Group

• Canadian International Angel Investors
• Ekagrata Inc.
• Golden Triangle Angel Network
• Keiretsu Forum Canada
• Oak Mason Investments Inc.
• Southeastern Ontario Angel Network
• TenX Angel Investors Inc.
• VANTEC Angel Network Inc.
• York Angel Investors Inc.

4.3 Business Incubator

• Alacrity Foundation
• Alberta Agriculture and Forestry
• Agrivalue Processing Business Incubator
• Food Processing Development Centre
• Biomedical Commercialization Canada Inc. (operating as Manitoba Technology Accelerator)
• Creative Destruction Lab
• Empowered Startups Ltd.
• Extreme Innovations
• Genesis Centre
• Highline BETA Inc.
• Innovacorp
• Interactive Niagara Media Cluster o/a Innovate Niagara
• Invest Ottawa
• Knowledge Park o/a Planet Hatch
• LatAm Startups
• Launch Academy – Vancouver
• LaunchPad PEI Inc.
• Millworks Centre for Entrepreneurship
• NEXT Canada
• North Forge Technology Exchange
• Platform Calgary
• Real Investment Fund III L.P. o/a FounderFuel
• Ryerson Futures Inc.
• Spark Commercialization and Innovation Centre
• Spring Activator
• The DMZ at Ryerson University
• Toronto Business Development Centre (TBDC)
• TSRV Canada Inc. (operating as Techstars Canada)
• VIATEC
• Waterloo Accelerator Centre
• York Entrepreneurship Development Institute

5. How to Apply for a Canadian Startup Visa

Getting a letter of support from a designated Canadian organization is difficult because your startup needs to demonstrate that it has strong market validation or scalable recurring revenue.

If you have a creative idea and the right skills and capital to execute it, you may want to work with specialized business consultants to develop, test, and validate the idea before seeking endorsement from a designated organization.

To receive a letter of support from the Designated Organization, you can follow the key steps below to successfully apply for a Canadian startup visa.

• Step 1: Prepare a Pitch Deck (business concept) or Business Plan
• Step 2: Submit your application to a designated organization for review and evaluation
• Step 3: Undergo an interview with a designated organization
• Step 4: Sign an agreement with the designated organization
• Step 5: Pay the fee to the designated organization
• Step 6: Receive a Letter of Support from the designated organization(s)
• Step 7: Submit application for permanent residence and work permit

If you need assistance with any of the steps above, please contact ImmiPath for help and guidance. We can connect you with the right people and resources that can help you on your Canadian immigration journey.

6. How Long is the Canadian Startup Visa processing time?

Getting a letter of support from a designated Canadian organization is difficult because your startup needs to demonstrate that it has strong market validation or scalable recurring revenue.

Canadian SUV immigration processing times may vary depending on IRCC‘s workload. The general guidelines clearly state that the waiting period for a final decision on an application can range from 3 to 5 years.

7. Advantages and Disadvantages of immigrating to Canada as a Startup

It is best to consider the benefits and drawbacks of this program before taking any next steps. It is important to fully understand what this program offers and whether it is the right program for you. 

7.1 Advantages of the Canadian Startup Immigration Program

Below are some advantages of the Canadian SUV immigration program:

• A direct path to permanent residence in Canada
• Open to all nationalities
• There are no restrictions on doing business in Canada
• No net worth is required or verified
• Allows partnerships of 5 individuals in the same startup (minimum 10% ownership required for each partner)
• Opportunity to move to Canada by applying for a work permit while the permanent residence application is processed

7.2 Disadvantages of the Canadian Startup Immigration Program

Here are some disadvantages of the SUV program:

• Highly competitive for support from designated organizations in Canada; therefore, it can be challenging to obtain such support
• Long processing time (more than 3 years) to obtain permanent residency
• High capital investment by founding partners is often required to secure support from a designated institution
• An extremely mature, viable, and scalable business model is needed with a proven track record of success
• Moderate risk of rejection at the residency stage or delays due to peer review

8. How Much Does it Cost to Settle down for a Canadian Startup Visa?

The cost of the Start-Up Visa program in Canada ranges from CAD $165,730 to $300,000+, depending on various factors. As mentioned above, the Start-Up Visa program is not suitable for entrepreneurs who do not have access to capital to invest in their business venture in Canada.

Cost of immigrating in Canada under Start Up.

Please refer to the sample cost structure below to understand how much money you need to set aside to fund your Startup Canada immigration program application.

All fees below are approximate estimates in U.S. dollars, including fees charged by service providers and various companies providing SUV Program support:

8.1 Prepare Pitch Deck

• $3,000 – $5,000 (if you have an innovative, scalable startup that generates $500K+ in revenue per year)
• $100,000 or more if your startup does not meet the above requirements (this fee typically includes market research and validation of your assumptions in the Canadian market, plus generating initial traction Engage with customers to achieve product-market fit that the Designated Organization will require).

8.2 Fees charged by designated organizations

• Incubator: $40,000+ per company
• Angel investors: $35,000+ per company
• Venture Capital Fund: $50,000+ per company

8.3 Legal fees

Professional (attorney) fees: approximately $20,000+ per applicant

8.4 Government fees

The SUV application fee is as follows:

• PR: Main applicant – $1,540
• PR: Spouse – $1,040
• PR: Dependent child – $150
• Cost of doing business

These costs will depend on the nature of the business and industry. However, be prepared to set aside at least $100,000 or more per applicant to fund the operating costs of your startup venture while waiting for your permanent residence.

8.5 Costs of starting a Canadian immigration business as a start-up

These costs will depend on the nature of the business and industry. However, be prepared to set aside at least $100,000 or more per applicant to fund the operating costs of your startup venture while waiting for your permanent residence.

8.6 Canadian Startup Visa Success Rate

If your Canada SUV startup visa application is in the right hands, all requirements are met and the necessary documents are provided, you will be allowed to grow your business in Canada. IRCC claims that the SUV program has an overall success rate of over 75%.

Approval rates vary depending on the type of organization designated: 

• 78% – for startups supported by business incubators
• 80% – for startups backed by a network of angel investors
• 43% – for startups backed by venture capital funds

9. Some Reasons for Delay & Canadian Startup Visa Application

Occasionally, the Immigration Officer may initiate a peer review if the Officer doubts the authenticity or viability of the business. The peer review panel will verify whether the designated entity conducts appropriate audits and investigations according to industry standards.

Here are some red flags that could lead to colleagues evaluating or even rejecting your Canadian startup visa application:

• An investment entity with a disproportionately high or low shareholding ratio or with little or no legal control role over the enterprise
• The applicant has little or no control or equity in the business
• Most candidates are related or lack experience or education
• No intellectual property is included in the project and business plan
• The designated organization charged unusually high fees
• A management team that is limited to the point of having no startup experience
• The applicant did not provide evidence confirming their essential role within the company and the applicant did not make significant progress toward startup during the period when the applicant was legally authorized to work in Canada
• In general, ensure that your due diligence process is well documented and that substantial evidence is available to demonstrate the authenticity and feasibility of your commitment. Most importantly, make sure to follow our top tips to ensure your application’s success

10. Should We Immigrate to Canada as a Startup?

After setting a new record last year, the Start-up Visa (SUV) program is off to a strong start again this year with almost as many new permanent residents settling in Canada in January 2023 is almost the same number last year. 

The latest data from Immigration, Refugees and Citizenship Canada (IRCC) shows that 50 immigrant entrepreneurs used SUVs to gain permanent residence in Canada in January this year, nearly equal to 55 of the equivalent month in 2022.

In January this year, Ontario attracted 20 business immigrants via SUV, Manitoba welcomed five, Alberta welcomed 10, and British Columbia 15.

The SUV’s performance this January was double what it was two years ago, in 2021, when just 20 immigrant entrepreneurs, 150% fewer, settled in Canada through the program in the comparable month.

If you are a businessman and feel you are qualified and financially able, you can immigrate to Canada under the Startup category. ImmiPath’s team of experienced consultants can help you bring your startup to Canada with your family and business partners. You can focus on your startup idea and we at ImmiPath focus on your permanent residence in Canada.

If you have any questions related to immigrating to Canada with a Startup Visa, please comment below the article. ImmiPath’s team of consultants will enthusiastically support and advise you to help your dream of immigrating to Canada come true.