Whether you are a foreign small business owner or an owner of a large business corporation, there are many possibilities for starting a business in Canada. On this page, we will explain how to start a business in Canada, specifically for foreign entrepreneurs.
How to Start a Business in Canada as a Foreign Entrepreneur?
There are four options that foreign business owners and entrepreneurs can use when starting a business in Canada.
Entrepreneur Work Permits
If you are a foreign entrepreneur and want to establish your business in Canada and relocate, you may be eligible to come to Canada under Canada’s Entrepreneur Work Permit program. This program is designed for foreign entrepreneurs who own at least 50% of the shares in a Canadian business and demonstrate the business will contribute to Canada’s economic development and result in job-creating for Canadians. After successfully establishing their companies in Canada and having managed their companies for at least one year, foreign entrepreneurs may become eligible to apply for permanent residence under various immigration programs in Canada.
Intra Company Transfer (ICT)
Established business owners from foreign countries can expand their business to Canada. Foreign nationals arriving in Canada on the ICT work permits have several pathways to permanent residency in Canada after one year of employment in Canada.
Provincial Nominee Programs (PNP)
Every Canadian province offers an immigration pathway for foreign nationals to invest, work, and live permanently in Canada. It is often that foreign entrepreneurs use the Entrepreneurs streams of Ontario PNP and British Columbia PNP.
Owner-Operator LMIA Program
This program was very popular until its closure in April of 2021. Many foreign business owners now use the regular LMIA pathway. However, you can achieve the same results with the Entrepreneur Work Permit option (above).
Starting a Business in Canada – Common Requirements
If you wish to apply for any of the above programs, you very likely need to satisfy five critical elements in your application:
1. Viable Business Plan
Your business proposal is the most important part of your work permit application, so make sure that your business concept is specific, well-researched, and viable in Canadian market conditions. Include as many details as possible in your business plan. A good business plan should include the following sections, among the others:
- Description of business model
- Value proposition
- Competitive advantage
- Risks and challenges
- Long-term vision
- Short-term execution strategy
- Team & staffing plan
- Key partners/suppliers
- Monetization strategy
- Market research
- Marketing strategy
- P&L analysis
However, keep in mind that your business should NOT be an owner-operator type of business that generates income only for you or your partner. Your business should not be the “passive investment” type of business (like buying a real estate property to rent), but rather should require your active involvement and day-to-day management.
It should have a solid long-term expansion and growth plan, aim to create jobs for Canadians and contribute significantly to the Canadian economy.
2. Relevant Experience
You must also demonstrate that you have relevant experience (either in the same industry or a similar industry) and managerial skills to establish and run your business in Canada. The Immigration Officer assessing your application has to be convinced that you are able to execute your business plan. Therefore, make sure to include in your application the evidence related to your educational background and employment or business ownership experience to demonstrate that you possess all the necessary skills and knowledge to undertake such a venture in Canada.
3. Financial Capacity for Starting a Business in Canada as a Foreigner
Entrepreneurs starting businesses in Canada must have sufficient funds to execute a business plan. They must also demonstrate that Canada will benefit from their investment in the business. They need to secure business financing if needed and create a proper business structure. We are often asked how much entrepreneurs should invest in their businesses in Canada. The answer is always “it depends.” It depends on the type of business you plan to establish in Canada. The investment must be reasonable to cover operational expenses in the next 1-2 years.
In general, we recommend that you should aim to invest at least $100,000 as seed capital to fund your business Startup costs in year 1, provided that your business model is an “asset-light” business (IT, consulting companies etc.). Realistically, you should have access to $300,000 – $500,000+ in liquid funds if the business requires additional funding before generating revenues.
Please keep in mind that you should NOT invest your entire savings into your business in Canada. Every new business venture carries substantial risks, especially when entering foreign markets. Having access to sufficient capital is important for your business success and immigration application.
4. Commitment & Execution
Once you have your business plan ready, you should start taking steps to execute it before submitting your immigration application. You must demonstrate your commitment to your business plan execution as a part of your immigration application. There are many ways to demonstrate your commitment to your business vision. For example, you can undergo federal or provincial incorporation, register a provincial sales tax account with Canada Revenue Agency, order equipment or products, rent premises, hire local staff, etc.
The more steps you take to launch your Canadian business before applying, the better your chances of getting a positive result.
5. Absence of Criminality & Clean Travel History
Lastly, you must have no history of criminality or prior incidents of breaching the immigration laws of Canada or any other country. Having a criminal record from any country will likely reduce your chances of success in an immigration application. Canadian authorities may find you inadmissible to Canada depending on the seriousness of your criminal record. The absence of criminal history is imperative if you wish to succeed in any available options for startup immigration to Canada.
How Sobirovs Can Help You to Obtain Entrepreneur’s Visa
We can assist you with your application to come to Canada as an Entrepreneur to start and operate your business. Whether you own a small business or a large corporation, we can help. Besides, we will ensure that the business plan fits the Canadian realities. Our goal is to help you succeed in making a profit and immigrating. Book a meeting with our lawyers to discuss your business idea.
What Businesses Can I Start in Canada?
Canada is full of opportunities! There isn’t one specific “good” business to start in Canada, as any business can succeed. Foreign investors and entrepreneurs can consider two options:
Creating a Brand New Business
If you start a brand new business, you will have to do all the groundwork for creating an entirely new business. It involves market research, upfront capital investment, and acquiring stable and reliable suppliers. Not to mention, the risks of starting a brand new business can be pretty high.
Starting a Franchise
Some foreign entrepreneurs choose to buy a franchise as their means of business immigration to Canada. A franchise has many benefits over starting a brand new business. A franchise will already have clientele, you can rely on sales and customer data, and advertising is often done for you. Learn more about franchising for foreigners with us.
Read more about this subject below.
IMPORTANT: You can watch a detailed video about “Top 5 Tips to Start a Business in Canada and Immigrate as a Foreign Entrepreneur” below.