Have you ever considered starting a business? It might interest you to know that Canada has immigration options for foreign entrepreneurs. The Start-Up Visa Program connects promising business owners with Canadian private sector investors. If you are successful, you can receive your Permanent Residency within a couple years of arrival. This program is relatively new. It began testing around the same time as Express Entry was created but became official in 2018. So how does it work?
The process is relatively simple. First you find the right investors that will commit to fund your business. Then you apply for a work permit which lets you set up your business as you apply for Permanent Residency. Sounds easy enough, but there is more to it than that. Here are the details of the process.
Starting a business is expensive, so let’s talk about money first. As you can imagine, you will need to have saved some of it to begin your journey. This money is referred to as Settlement Funds. It is mainly for self-support and the costs of setting up the foundation for your business. In 2020, the minimum amount required was $12,960 CAD.
If you are bringing family members with you then the costs can rise. You can expect to need around $3,400 CAD per additional family member. Luckily, there is no minimum net worth requirement. There is also no need for self-investment since the program relies on interaction with Canadian investors. Keep in mind that you will also need some English or French skills. The minimum is a CLB (Canadian Language Benchmark) level 5.
FIRST STEPS – INVESTORS AND YOUR WORK PERMIT
The major requirement for your work permit is a Commitment Certificate from a designated entity. This simply means that you need an investor to fund your project. These investors are referred to as designated entities. There are different kinds of designated entities, but you only need commitment from one of them. Here is a breakdown of what counts as a designated entity and how much they need to contribute:
Angel Investor: This refers to an individual with a high total net worth who will invest in promising small businesses. Angel Investors will often provide initial support but demand equity at the same time. This means they would get a say in how the company runs as well as a large share of future profits. If you find an Angel Investor, they need to invest a minimum of $75,000 CAD. You can also find multiple investors and split up the total amount between them.
Venture Capital Fund: This is essentially a tool used by high-level investors. Think of it as a middleman between investors and potentially successful start-ups. It is different from an angel investor because funds come from multiple individuals instead of just one person. You will need a total of $200,000 CAD in commitments if you go through this method. Keep in mind that you can get commitments from multiple funds. All that matters is that the minimum amount of funds is met.
Business Incubator: This refers to an organization that supports new businesses until they can manage on their own. These can be either for or non-profit. They help in a variety of ways, from financial support to providing equipment and work locations. There is no required amount of funds if you choose this route. All that is required is for your project to be accepted into one of these programs.
Each of these methods has its own advantages and disadvantages. You can find a list of designated organizations here. Keep in mind that the government will not provide any financial aid as you go through this process. Once you have received commitment from a suitable investor you can apply for your work permit.
RUNNING YOUR BUSINESS AND PERMANENT RESIDENCY
Once you have your work permit, there are a few things to keep in mind as you set up your business. These are crucial to remember if you want to get your Permanent Residency (PR). First, the obvious: Your business needs to be incorporated in Canada. It also needs to operate mainly in Canada of course. There are also some important points to be made about company ownership:
You can have up to 5 candidates for PR within same start-up. That said, each candidate must own at least 10% of the corporation’s voting rights. On top of this, no other candidate can hold 50% or more of the voting rights. Every candidate needs to be actively involved in the project’s management while living in Canada as well. If these requirements are met, you can apply for PR. In fact, you can do so as soon as you receive a Letter of Support from your designated investors.
IS THIS THE RIGHT PATH FOR ME?
It is safe to say that immigrating to Canada through entrepreneurship might not be for everyone. That said, it is a relatively fast way to obtain Permanent Residency. It can take as little as 2 years to get the Residency through the Start-Up Visa Program. If you are not sure whether this is a good idea, you can book an appointment with Gentium Immigration. Our Registered Consultants can show you all the options available. You can always migrate through other methods, such as studying or through one of the paths offered by Express Entry. Your money matters, specially as an entrepreneur. We can help you spend it in the right place.