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Doing Business in Canada

The Start-Up Visa Programs – Manufacturing Canada’s Gain

Shortly after the November 2016 election of US President Donald Trump a realization spread around the globe that things really were going to change. For nearly two and a half centuries the United States had been the land of opportunity for innovators, inventors, academics and entrepreneurs but suddenly everything was going to be different. That realization, as chilling as it was, didn’t stop those who wanted to be innovators or inventors or academics or entrepreneurs from trying to get to get into the States.  The number of visa applications for foreigners trying to make something of themselves and their ideas in the United States rose in 2016, even as the mood of the electorate swayed dangerously away from common sense and reason. It wasn’t until early March, a few short weeks after he was sworn in that the Trump administration tried to introduce its first immigration ban, the one that was struck down by state courts but recently reinstated in a modified form by the US Supreme Court. The chaos caused at dozens of airports in the United States and around the world aptly demonstrated there were still tens of thousands of people willing to risk virtually everything for the chance to develop their brains or businesses in America.

The rise in US visa applications had been accelerated by two key policies the Obama administration championed; a Start-Up Visa for entrepreneurs who could invest in forming a business in America, and the International Entrepreneur Rule which would give short-term legal status to immigrants who raised $250,000 or more in business funding. These two policies would have helped attract even more of the world’s best and brightest to the world’s most dynamic and generous economy but, because American politics have turned insular and because the Trump administration is overtly keen on barring America’s doors, these two policies have quietly been killed.

America’s behaviours do not go unnoticed in Canada. Even before the ascension of the Trump administration and the oblivious abdication of reason by the American electorate, Canadian officials were examining and copying many of Obama’s most attractive immigration policies.

Canada has built an extremely strong tech sector which, like most parts of our economy, is very much integrated with its American counterparts. Information and services flow freely across a virtually invisible border with American and Canadian tech firms competing as equals under the North American Free Trade Agreement. It is relatively easy for tech companies based in Canada to enter and succeed in the American market. Similarly, it’s relatively easy for Canadian based firms to court American investment capital. Canada is thus a highly desirable place to base a start-up. The moment they heard about Obama era immigration policies favouring start-ups and tech entrepreneurs, Canadian officials started planning our own.

In early 2017, Canada has adopted its own version of a Start-Up Visa program. It is available to, “… immigrant entrepreneurs with the skills and potential to build businesses in Canada that are innovative, can create jobs for Canadians, and can compete on a global scale.” (source: https://www.cic.gc.ca/english/immigrate/business/start-up/index.asp)

To apply for a start-up visa, you need to meet a series of eligibility requirements.

First, you need to get support from a “designated organization”. This might come in the form of an investment of $200,000 or more from 1 of 22 venture capital funds listed on the Immigration and Citizenship website. It might also come in the form or a $75,000 angel investment from a person associated with 1 of 7 listed funders or from acceptance into 1 of 26 business incubators listed on the site.  (source: https://www.cic.gc.ca/english/immigrate/business/start-up/eligibility/entities.asp)

Next, applicants must show that their business meets two basic ownership and decision making requirements. Up to five persons can apply for a Start-Up Visa as owners of a business. Each person applying must have at least 10% voting rights in the business. A minimum of 50% voting rights must be shared between the owners of the business and the Designated Organization supporting their application. In other words, the owners and supporters must have control of the organization.

A language test in either English or French must be taken to ensure the business owners can communicate through speaking, listening, reading, and writing in one of Canada’s two official languages. Applicants will be refused if they do not meet basic levels of proficiency.

Lastly, applicants need to be able to prove they can support themselves and their family members when they arrive in Canada. On its own, the Start-Up Visa program does not provide any material or financial support. Applicants are expected to have a minimum of $12,300 in cash (or savings) to provide shelter and sustenance for themselves. This figure rises by $3,314 for each additional family member. Travelers are advised that they must make a declaration to a Canadian customs official upon arrival if they bring more than $10,000 into Canada. This rule would apply to an applicant for a Start-Up Visa when they enter the country.

Best of all, the Canadian government recognizes that not all business succeed so, if successful applicants give it an honest effort but their start-up fails anyway, the failure will not affect their permanent resident status.

Canada is open for immigrants to bring their talents and ideas here. When they do, establishing themselves in a business centre like Telsec is often beneficial as the business centre takes care of the support work and allows new Canadian businesses to get on with their jobs of innovation, invention, development, and entrepreneurship, just as they dreamed of doing before coming here.

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