Introduction to Start-up Visa Canada
The Start-up Visa (SUV) program is an initiative launched in 2013 by Immigration, Refugees and Citizenship Canada (IRCC). It was designed to attract innovative entrepreneurs from around the world who are keen to establish their businesses in Canada. Originally launched as a pilot program, the SUV program became a permanent fixture amongst Canada’s economic immigration programs in 2018. The program seeks to strengthen Canada’s competitiveness on a global scale, generate economic growth and create employment opportunities for Canadians. Since its inception, it has gained popularity among foreign entrepreneurs seeking to establish their ventures in a business-friendly environment.
In May 2023, the Canadian government made significant policy changes to the program to enhance program integrity and provide clarity to Immigration Officers how to interpret and apply the law governing this program. These changes present new challenges and complexities that are essential considerations when planning your immigration strategy.
In this comprehensive guide, we will explore the latest updates to the Start-up Visa Canada program, the eligibility criteria, the application process, financial requirements and essential tips for success. By understanding these aspects, you will be better equipped to navigate the ever-changing Canadian entrepreneurial landscape and seize the opportunities it offers.
Understanding Start-up Visa Canada Eligibility Criteria
First, it’s important to understand the program requirements. To qualify for the Start-up Visa Canada program, applicants must meet several eligibility criteria, including:
- Business idea and innovation: Applicants must have a unique and innovative business idea that can significantly contribute to the Canadian economy and create employment opportunities for Canadians.
- Designated organization support: Applicants must secure a commitment from a designated organization, such as a venture capital fund, angel investor group, or business incubator, to support their business idea. This support can take the form of funding (required for angels and VCs), mentorship, resources, or other types of assistance.
- Ownership requirements: Applicants must own at least 10% of the voting rights attached to all outstanding shares of the business. There may be up to 5 co-founders, each of whom must own at least 10% of the voting shares. Additionally, the founders and the designated organization (if the organization takes an equity stake in the start-up) must collectively hold more than 50% of the voting rights attached to all outstanding shares.
- Language proficiency: Applicants must demonstrate proficiency in English or French at a minimum Canadian Language Benchmark (CLB) level of 5 in all four language abilities (listening, speaking, reading, and writing).
- Sufficient settlement funds: Applicants must demonstrate that they have adequate financial resources to support themselves and their dependents upon arrival in Canada.
Navigating the application process for the Canada start-up visa
The application process for the Start-up Visa Canada program involves several steps, including:
- Developing your business idea: It is crucial to conduct market research, identify your target audience, know your competitors, find problem-solution fit and, if possible, validate your idea with product-market fit (think, paying customers).
- Securing support from a designated organization: You will need to pitch your business venture and secure support from a designated entity, as mentioned above. It is essential to research and approach designated organizations that align with your business idea and demonstrate how your venture can benefit from their support.
- Preparing your application: Once you have secured support from a designated organization, you will gather all the necessary documents, including proof of language proficiency, proof of your qualifications, and proof of funds. It is crucial to carefully review the application requirements, as they are subject to change, and ensure you’re submitting all required information to prove your eligibility.
- Submitting your application: After preparing your application, you will submit it to Immigration, Refugees, and Citizenship Canada (IRCC) via the Permanent Residence Portal. You will receive an Acknowledgement of Receipt (AoR) from IRCC by email some months after submitting your application. You will then be able to link your application to a MyCIC account (not to be confused with your PR Portal). You will receive updates and correspondence from IRCC in your MyCIC portal.
- Awaiting the decision: After submitting your application, you must wait for IRCC to review your case and make a decision. The processing time for the Start-up Visa Canada program is currently around 35 months, but is expected to decrease as IRCC increases the program quota and devotes more resources to processing these applications.
- Applying for a work permit: Founders who are identified as “essential” on the Commitment Certificate – Letter of Support are eligible to apply for a work permit to enter Canada and work on their venture while the PR application is under review. In most cases, this application must be submitted prior to entering Canada. The work permit only grants authorization for the founder to work on their startup venture.
One step that you won’t find on official Government of Canada websites is continually updating IRCC with progress on your venture, especially if you applied for a work permit. Entrepreneurs must show IRCC that their primary intent for coming to Canada is to launch and scale an innovative business that can create jobs for Canadians. Failure to demonstrate your commitment to carry out the startup business in Canada may lay to your application being refused.
Recent Start-up Visa Policy Changes
Before diving into details about the recent policy changes, it’s worth considering the motivating factors behind them. The SUV program was introduced in the wake of the coming into force of Bill C-31, which terminated the federal Immigrant Investor Program (IIP). The introduction of the SUV program marked a clear federal policy shift away from passive investment immigration schemes toward a program that would attract businesspeople who would actively operate and manage their businesses in Canada. The Quebec Immigration Investor Program (QIIP) remains the only passive investment program in Canada but has not accepted new applications since November 2019 as it undergoes review.
Despite the intent to attract innovative entrepreneurs who would actively manage their businesses in Canada, disingenuous applicants have been on the rise as the program gained popularity. As you’ll witness with the recent changes, IRCC will be taking a more active role in reviewing entrepreneurs’ genuine intent to launch their start-up in Canada and the viability of the proposed business venture. This assessment will now be executed at the work permit application stage for essential applicants.
Assessing the venture’s viability, as well as the entrepreneur’s genuineness, at the work permit stage will have significant impact on PR application outcomes. The approval rate for initial SUV work permits has historically been very high. With the new assessment criteria implemented in the recent policy change, we anticipate seeing more initial work permits refused. Work permit refusals will inevitably have an impact on the success rate of entrepreneurs’ PR applications. Consequently, it is increasingly important to prepare a strong initial work permit application.
Overview of recent changes to the Start-up Visa Canada program
The Canadian government made several significant updates to the Start-up Visa (SUV) Canada program policies. These changes came into effect on May 18, 2023 and are applicable to all new and pending work permit applications. It is significant to note that Immigration Officers are instructed to request additional information from entrepreneurs with pending applications to prove they meet the updated requirements.
Some of the most significant changes include:
1. Changes to the order of applications
Work permit applicants are now required to apply for permanent residence first. Proof of submission must be included in the work permit application. Furthermore, if there are co-founders listed on the Commitment Certificate, all members deemed essential on the Letter of Support must apply for permanent residency before a work permit can be approved for any members of the team.
Previously, IRCC did not specify an order in which the applications had to be submitted.
2. Emphasis on the Creation of Significant Benefit
Work permit applications made in the SUV program are exempt from the requirement to obtain a Labour Market Impact Assessment (LMIA). From inception, the LMIA-exemption code under which these applications were processed was C10 – Significant Benefit. That code changed to A77 on December 15, 2022 and the new policy instructs Immigration Officers to assess the potential significant benefit expected from the entrepreneur’s entry to Canada to launch their venture. Specifically, the new policy guidance states:
“The administrative code A77 is the code under which the work of certain foreign nationals, entering Canada to create a business prior to the finalization of their permanent resident application in the start-up business class, may create significant economic or social benefits [emphasis added].
When assessing the significant benefit of the foreign national’s work, officers should review the offer of employment… Information in this field should indicate that a commitment certificate was issued to the employer, and outline how the entrepreneur’s business will create or maintain benefits for Canada.
If the officer is not satisfied that the criteria for the work situation described by administrative code A77 are met or that the applicant’s work will create or maintain a significant economic, cultural or social benefit, given that there is no specific refusal ground in the GCMS, they should select the refusal ground “Other” and add a short explanation in the Comments field that they are not satisfied that section R200 or paragraph R205(a) are met.”
Previously, it was widely accepted that an entrepreneur coming to Canada to launch an innovative business was significant benefit by definition. However, the updated policy instructions refer specifically to the types of significant benefits that exist within the Canadian immigration system under LMIA-exemption code C10.
All pending and future work permit applications must now clearly identify how the new venture will generate significant economic, social and cultural benefit. The benefits will differ for each business and may include:
- advancing Canadian industry through market expansion, job creation, and product or service innovation
- using their considerable work experience in negotiating and concluding business transactions that would benefit the Canadian economy
- creating employment or training opportunities
- developing products that will assist in improving environmental considerations
- make scientific or scholarly contributions
- create significant artistic or culture contributions
Work permit applications will be refused if Immigration Officers are not convinced the entrepreneur’s work will create significant economic, cultural or social benefit. As part of this assessment, the Immigration Officers must be convinced that the venture is viable and the entrepreneur will be able to perform the work sought. This brings us to the next major change: evaluation of investment funds.
3. Providing Proof of Investment in the Venture
The SUV program became a very popular business immigration program, in part because there was no minimum investment or net worth requirements like many provincial counterparts. Prior to May 18, 2023, entrepreneurs only had to demonstrate they had sufficient funds to support themselves and their immediate family members for a minimum of 12 months.
Now, entrepreneurs must include proof of sufficient funds to commence the indicated business activities, in addition to the funds required for settlement. This ties in directly with the requirement to demonstrate that the proposed venture will generate significant benefit for Canada. Entrepreneurs must explicitly outline the business activities they’re coming to Canada to engage in, the economic, social and cultural benefits this will create for Canada, and the budget required to execute these activities.
Next, the entrepreneur must prove these funds required to carry out the activities are available and transferable. The source of these funds also needs to be provided, including who is investing the funds, where are the funds held and what is the provenance of the funds.
The amount of investment funds required will vary business-by-business. It will be essential for entrepreneurs to clearly outline the business activities they plan to engage in to launch the business and the budget associated with those activities. They will then need to show that there is sufficient investment to capitalize the start-up and execute the proposed business activities. Exactly what IRCC expects as proof of provenance of funds is yet to be known, but we can draw from experience in other business immigration programs and reasonably assume that documents like proof of the sale of a property, dividends paid out by a company, salary and savings, performance of investments, etc. may be accepted.
To summarize, although the designated organizatoins must assess the business opportunity’s potential for success, it is the processing officer who must complete the assessment under paragraph R205(a) and determine that the entrepreneur’s presence in Canada will create social, cultural and economic benefit. The entrepreneur must be able to prove they can actually do the work sought, which necessitates providing proof of investment to capitalize the venture to carry out the activities in the start-up business plan.
4. Genuineness: Essential and Non-essential Founders
The new policy provides greater detail about the assessment of an entrepreneur’s ability to perform the work sought in Canada. In addition to sufficient proof of their education, language ability and work experience, the applicant must demonstrate available, transferable, and unencumbered investment funds to show they can afford to carry out the activities and execute their duties and responsibilities.
The new policy goes on to state that:
“If the officer has reasonable grounds to believe that the foreign national will not be able to perform their duties, they are prohibited from issuing a work permit as per paragraph R200(3)(a). The officer must assess whether the foreign national meets the job requirements (including experience, education, language, training and any other elements specified in the offer of employment) and whether there are any other factors that may prevent the foreign national from being able to perform the duties of the position.”
Our discussions about qualifications often lead to questions about essential v.s. non-essential founders. From an immigration legal perspective, essential founders are those who need to come to Canada to engage in business activities required to take advantage of opportunities to launch the innovative business before the permanent residence is granted.
From the start-up point of view, choosing the minimally viable team (MVT) is critical to the start-up’s success. All members of the MVT generally have the skills, expertise, experience and network immediately needed to undertake activities essential to the venture’s ultimate success. Arguably, all founders are essential form this perspective.
An MVT will typically include founders with business development, finance and accounting, product/operations, and technical expertise. This team can make or break the venture and with the odds stacked against start-up success (9/10 startups fail), choosing the right team, is essential to success. The entrepreneur journey is not for the faint of heart; previous start up experience and domain specific knowledge and skills are a key predictor of success. Intangible attributes, like shared entrepreneurial passion and shared strategic vision are just as important as technical skills and abilities for a successful startup.
We can expect that IRCC will certainly be scrutinizing the genuineness of the start-up team more closely. Applicants must be prepared to demonstrate they have the experience, skills and know-how to fulfill their role in the start-up, that their role makes sense for the proposed business venture, and that the attributes of the team, as a whole, make sense.
As a result, it’s more important than ever that founders identified as “essential” on the commitment certificate are activating their work permit and coming to Canada to work on their ventures. Although there isn’t a minimum residency requirement, some time spent in Canada will be essential, even though entrepreneurs were previously approved in the SUV program without ever having set foot in Canada.
Further, ventures with non-essential founders will need to be especially prudent. PR processing times are currently 34 months and IRCC will certainly question the genuineness of a non-essential founder who is unable to provide proof of their contributions to the start-up while the essential founders have been operating the business in Canada for nearly 3 years.
Tips for a Successful Start-up Visa Application
In this section, we’ve included suggestions for documents you may include in your application that will increase your odds of success. We’ve also provided resources to help you prepare these documents.
Evidence to consider including in your application to prove the viability of your venture, your ability to perform the work sought in Canada and your commitment to launching your business are:
Start-up Business Plan: Many start-up methodologies argue that a start-up business plan is outdated before the ink dries and there’s truth to this! However, we must balance start-up norms and immigration legal requirements. Creating a simple business plan helps demonstrate you and your start-up venture meet the SUV Canada program requirements.
Strategy Roadmap and Operational Plan: What is the current state of the industry you’re entering and what will it look like when your product or service enters the market? How are you going to bring your ideas and concepts to life? What steps are you going to take to bring your vision to reality? Get specific and break down your plan into tangible steps with clear timeframes.
Financial modelling: After you’ve defined the problem you’re solving in your business plan, identified your customers, the value you’re going to create for them, how you’re going to do this better than anyone else and the steps you need to take to get there, you need to develop a budget and financial forecasts. These documents are critical to demonstrating your business venture’s viability.
Progress report: The enhanced burden of proof also applies to work permit renewals. If you’re applying to extend your SUV work permit, make sure you provide sufficient detail about the actions you’ve taken to gain traction in your start-up, and the accomplishments you’ve achieved to date. Be sure to include proof to substantiate your claims. Focus on the 4 key areas of your business: finances, operations, HR and sales/marketing.
Recent policy changes to Canada’s Start-up Visa program reinforced what any true entrepreneur already knew:
Entrepreneurship is not a passive endeavour.
IRCC will be reviewing work permit applications submitted under this program with greater scrutiny, specifically on the viability of the business, proof the business will be able to create significant benefit in Canada and concrete evidence the founder(s) genuinely intend and are able to launch an innovative business in Canada that can scale internationally.
About the Author
Hi, I’m Brooke!
I am an innovator, change maker and disruptive entrepreneur. I’m also a Canadian immigration expert, empowering individuals and organizations to seize opportunities that will enable them to pursue their fullest potential.
Over the past decade, I have been dedicated to changing lives and building Canada’s social, cultural and economic fabric by navigating immigration legal systems. My experience operating a bespoke consulting firm and completing a Master’s in Management, Innovation and Entrepreneurship has fueled my desire and ability to meaningfully contribute to building solutions addressing some of the world’s most pressing problems.
I am committed to nurturing my entrepreneurial and innovative spirit through purposeful work to create positive impact in the world.
Outside of work, you’ll find me in nature, on my mountain bike/skis, traveling or herding cats (aka wrangling twin toddlers).
© Brooke Finlay, 2023