d) Settlement Funds
The applicant must demonstrate that they have sufficient funds to support themselves and their family in Canada. Funds for settlement must be held by the applicant personally and are separate from any investment capital which the applicant has secured for their business from a designated organization. The amount of funds required is based on the low-income cut-off and varies by family size. Funds must be readily available and unencumbered by dept or other obligations.
Application Process
Once the applicant or applicants have received the letter of support form a designated organization, they can apply to Immigration, Refugees and Citizenship Canada for permanent residence. If multiple business partners are applying together, they must all meet the program criteria. If the application for one essential business partner is refused, all applicants linked to the same business proposal will also be refused. For this reason, it is important that applicants are careful about with whom they partner and ensure that all partners meet the program requirements and are admissible to Canada.
Immigration, Refugees and Citizenship Canada (IRCC) will evaluate the business ownership structure, business plan and commitment from the designated organization, as well as the applicant’s individual qualifications and admissibility to Canada. During processing of the application, the IRCC Officer has the option to request a peer review of the applicant’s business and commitment certificate from the designated organization. Peer review involves an independent assessment of the commitment from the designated organization, conducted by a panel of industry association experts. Peer review can be requested either because the IRCC Officer has specific concerns about the genuineness of the proposed business, or as a general quality control measure.
While overall processing times for assessment of Start Up Visa program applications can be long, the applicant can also apply for a temporary work permit in order to travel to Canada and work on establishing their business prior to approval of the permanent residence application.
Advantages and Disadvantages of The Start Up Visa Program
The Start Up Visa program has several advantages. It provides a direct pathway to permanent resident status in Canada for applicants who meet the program requirements. It also allows for up to five (5) essential business partners, as well as their accompanying spouses and dependent children to apply for permanent residence on the basis of one proposed business. Canada’s federal Express Entry immigration pathway for skilled workers prioritizes young applicants who have a high level of formal post-secondary education and high proficiency in English or French. Additionally, applicants under the Express Entry immigration program do not receive points for self-employed work experience in Canada. The Start Up Visa program provides an alternative pathway to permanent residence for applicants who may not score high enough to be selected under the Express Entry points system, and who intend to be self-employed in Canada.
As of this date, the most significant disadvantage of the Start Up Visa program are the relatively long processing times in comparison to alternative immigration pathways. However, long processing times are mitigated by the fact that Immigration, Refugees and Citizenship Canada recently announced the introduction of a three (3) year temporary open work permit for Start Up Visa Program applicants. The work permit allows the applicant or applicants to come to Canada and start working on the business on the ground prior to the approval of their permanent residence application. Additionally, the government of Canada has recently committed to reducing processing times under this program, as outlined below.
Canada’s Tech Talent Strategy and The Future of the Start Up Visa Program:
In June 2023, Immigration, Refugees and Citizenship Canada announced Canada’s Tech Talent Strategy. The Tech Talent Strategy is a policy plan intended to attract skilled tech workers and new businesses to Canada. As part of the Tech Talent Strategy, IRCC announced a number of measures to improve the Start up visa program.
a) Allocation of Additional Space in the Immigration Levels Plan
With the aim of reducing processing times under the Start Up Visa program, IRCC allocated more spaces to start up visa applicants under the 2023-2025 multi-year immigration levels plan. IRCC indicates that processing and accepting more applications will help to reduce the current backlog.
b) Three-Year Open Work Permit
Previously, applicants who submitted a Start Up Visa Program application could apply for a one (1) year employer-specific work permit. As part of the Tech Talent strategy, applicants can now apply for a three (3) year open work permit.
Allowing applicants to apply for an open, rather than employer-specific work permit, is intended to permit more flexibility in salary. On an employer-specific work permit, the business is required to pay the work permit holder a specific salary as outlined in the offer of employment filed in support of the work permit. This can be problematic for start up company founders, who often do not take a full salary in the first several years of the business. This decision reflects the fact that temporary workers who are Start Up Visa applicants are necessarily the owners and operators of their own company, and as such government concerns regarding exploitation of temporary workers are less applicable in these cases.
Additionally, the open work permit has the benefit of allowing Start Up Visa applicants to work for other employers outside of their own company if desired. This can allow the applicant to, for example, take on additional part-time or freelance work in order to support themselves while they work toward establishing their company.
Any of the up to five (5) co-applicants who are deemed essential and urgently needed in Canada by the designated organization can apply for a temporary work permit. IRCC will assess the work permit applications on a case-by-case basis. The applicant will need to provide an explanation as to why they are essential and urgently needed in Canada, along with supporting evidence outlining their qualifications and their proposed role in Canada.
c) Commitment to Priority Processing for Start Ups with Committed Capital Investment
Finally, as part of the tech talent strategy, IRCC has committed to prioritizing applications supported by committed capital investment or endorsed by a business incubator that is also a member of Canada’s Tech Network. This prioritization will apply to both applications currently in the backlog and newly submitted applications. IRCC has indicated that additional strategies for improving program effectiveness will be announced in future, and as of this time remain forthcoming.
Conclusion
The Start Up Visa program provides a pathway for permanent residence for entrepreneurs who have an innovate business idea and intend to create a new business in Canada. Long processing times have been a disincentive for some applicants to apply to the Start Up Visa program. However, the government of Canada is taking positive steps to address this issue under the Tech Talent Strategy, particularly the introduction of a three-year open work permit and a commitment to reduction of processing times. These new measures will make the Start Up Visa a more attractive option to foreign entrepreneurs.