Canada's Start-up Visa Program: Considerations for Foreign Start-ups

Canada’s Start-up Visa (SUV) program, launched in 2013, is aimed at creating job opportunities and stimulating the Canadian economy by bringing in talented immigrant entrepreneurs whose start-ups are identified as promising and have the potential to embody the talent that Canada is trying to attract. From 2015 to mid-2023, 3,141 SUV permanent residence applications were approved by the Canadian government.

A start-up is, by nature, a high-risk venture as the business concept must be innovative, disruptive, and scalable, which can compete on a global scale. Managing risk is a key consideration before embarking on the SUV program journey.

Any foreign start-up interested in pursuing Canada’s SUV program should first consider the following six elements:

1. Business

To participate in the SUV program, the Canadian government requires that a start-up’s business plan proves the business is innovative, and focused on scalable, transformative and pioneering ideas at the early stage of development.

The potential promise of a business idea should be backed up by a well-developed and well-drafted business plan with actionable points, the worst- and best-case scenarios, and realistic projections of hiring locally.

2. Designated entity

Designated entities play a crucial role in the immigration process of the SUV program. The Canadian government requires that a start-up obtain a Letter of Support (LOS) to ensure that entrepreneurs are not “flying solo” in their new country without any adequate support. A LOS, although another requirement for start-ups applying through the SUV program, can be seen as a benefit for entrepreneurs.

The LOS requirement often results in the successful implementation and expansion of start-ups in the Canadian market, which will, in turn, create new job opportunities for Canadians. This also assures the immigration officials that the start-up is financially viable, and, to an extent, mitigates the risk of fraud.

3. Market analysis

Market analysis plays a pivotal role in creating a sustainable and feasible business, and a well-developed business plan will help.

Entrepreneurs need to conduct the necessary market research to determine whether there is a strong target market for the business in the Canadian economy.

Conducting a thorough market analysis before embarking on a start-up journey will help to determine competitors and assist in understanding the necessary tools to thrive in a particular industry.

Finally, a market analysis will make entrepreneurs aware of any regulatory requirements, which may be required once the business is set up in Canada.

4. Time

Entrepreneurs are encouraged to begin this endeavor once they have an innovative business idea, as there is no “perfect condition” to embark on this journey.

It takes some time to make the right connections, to craft and establish your business plan and to obtain the LOS from one of the recognized, designated organizations.

It may take up to six months to obtain a work permit and up to three years to obtain permanent residence. Both processes can start concurrently, but the work permit application can only be filed after the permanent residence file is submitted with the Canadian government.

5. Cost

On the surface, the SUV program can appear quite straightforward.

One of the key elements that render the Canadian SUV program attractive cost-wise is that there is no set net worth or minimum investment requirement.

The only funding requirement is for the entrepreneur to possess sufficient settlement funds. The required settlement funds do vary depending on the family size and are typically not as significant compared to those of other entrepreneurial programs in Canada.

6. Attractiveness of the Canadian market

Canada offers support and resources to entrepreneurs looking to launch and scale their innovative businesses.

Additionally, Canada offers preferential market access through its 15 free trade agreements with more than 40 countries, along with tax credits to start-ups.

Dependent family members can also accompany the main applicant to Canada through the temporary and permanent residence processes.

Looking ahead

The Canadian government announced several measures in June 2023 to improve the SUV process, including the issuance of an open work permit for three years (as opposed to the current one-year employer-specific permit) and expedited processing for select applications, to name a few. However, these measures have not yet been instituted.

These changes are expected to take effect in the spring of 2024, and Fragomen professionals are closely monitoring the situation for further updates.

Need to know more?

The SUV process can be lengthy. However, it comes with the option of applying for a temporary work permit. Fragomen has extensive experience in all aspects of these applications.

For queries on the SUV program, please contact Partner Cosmina Morariu at [email protected] and Senior Associate Merve Bilgic at [email protected].

This blog was published on January 4, 2024, and due to the circumstances, there are frequent changes. To keep up to date with all the latest updates on global immigration, please subscribe to our alerts and follow us on LinkedIn, X, Facebook and Instagram.