Canadaโs Start-Up Visa (SUV) allows foreign entrepreneurs to obtain permanent residence in Canada through business immigration. Owners of innovative start-ups or established foreign companies may be able to use this program to permanently relocate to Canada along with other founding partners (up to 5 partners), provided that they meet other requirements for the program.
If you are a foreign entrepreneur who is considering applying for a Start-Up Visa program, this 2024 guide is for you. Here you will find full information about the program, including details not commonly found elsewhere on the Internet. We have also included some helpful tips so you can be successful in this program. So, let us start.
Start-Up Visa Canada: Eligibility Requirements 2024
Below is the list of requirements as set by the Canadian immigration authorities for entrepreneurs who wish to apply for permanent residence in Canada under the SUV program:
- Foreign nationals must get a Letter of Support or investment commitment from one of the Designated Organizations in Canada;
- Each foreign national must own at least 10% of the shares in the startup. Foreign nationals and their Designated Organization must jointly have more than 50% of the total shares (voting rights) in the start-up venture;
- Each applicant must meet the minimum English or French language skill at CLB level 5; and
- Each applicant must have sufficient funds to settle in Canada (at a minimum, between $12,960 โ $34,299, depending on the size of the applicantโs family).
In addition to the above, to be successful in this program, entrepreneurs should be prepared to also meet the following basic criteria:
- Ownership of an innovative or successful business that is generating scalable and sustainable revenue or has strong market validation;
- Access to capital fund your start-up venture, usually around $200,000 at a minimum per applicant;
- Have highly specialized knowledge or unique experience in your field or have solid managerial experience; and
- Have an upper-intermediate level of English and/or French language skill(s).
Who Should NOT Apply for Canadaโs Startup Visa
The Start-Up visa program is NOT the right program for foreign entrepreneurs who have limited capital to invest in their start-up venture in Canada. One of the key requirements for the Start-Up Visa program is to obtain a letter of support or investment commitment from one of the Designated Organizations in Canada. The chances of getting support from a Designated Organization are close to zero if you (or your company) do not have sufficient capital to invest into your venture.
Although the SUV program is advertised as โno minimum investment is requiredโ, in reality, your venture should be well-capitalized in order to receive support from the Designated Organizations. It is naive to believe that if you have a great idea, VCs or Angel Investors in Canada will invest in your venture and provide you with the seed capital. This is usually not the case. VCs and Angel Investors always look for great companies with a history of traction and generating millions in revenue before they invest any funds.
Thus, if you are an entrepreneur with a great product or service and limited capital to grow your venture (less than $200,000), the Start-Up Visa program might not be the right pathway for you. Donโt be discouraged, we will discuss alternative pathways below.
Start-Up Visa vs Other Business Immigration Programs
There are various business immigration programs in Canada that entrepreneurs can use to relocate to Canada, in addition to the Start-Up Visa program. Specifically, you can explore the C11 Entrepreneur Work Permit, Intra-Company Transfer Program, Self-Employed Category, or even the LMIA Pathway (formerly Owner-Operator LMIA). See our table below to compare these programs and understand the pros and cons of each program.
Criteria | Start-Up Visa | C11 Work Permit for Entrepreneur | Intra-Company Transfer Program | Self-Employed Category | LMIA Pathway |
---|---|---|---|---|---|
Business Idea/Concept | Innovative, highly scalable and high revenue generating business | Unique business that will create jobs stimulate economy or transfer knowledge or skills to Canadians | Entrepreneurs who have successful companies in home country can set-up similar operations in Canada | Self-employed business in certain creative professions related to art, culture & sport | Small or medium business in canada (can be convenience stores, cafes, restaurants, nail salons etc.) |
Ownership Structure | At least 10% | At least 50% | Company in Canada must be owned by a foreign company or by the same group of individuals with similar voting rights | 100% | At least 50% |
Minimum Investment | Between $10K-50K to pay to Designated Organizations (admin fees for the Letter of Support).
| Depends on business, but entrepreneurs should have access to at least $100K+ | Depends on business, but entrepreneurs should have access to at least $100K+ | Applicants should have access to at least $50K+ | Cost of business purchase (usually $100K+) |
Language Skills | CLB 5 | Not required for a work permit | Not required for a work permit | Not required, but strongly recommended CLB 5 | Not required for a work permit |
Timeframes for Relocation (Work permit) | Country specific, usually 3-6 months | Country specific, usually 3-6 months | Country specific, usually 3-6 months | Timeframes for relocation (Work permit) | Stage 1: LMIA: 3+ months
|
Timeframe for Permanent Residence | Current processing time: 3+ years
| Using Express Entry pathway after 1 year: 8 months -1 year (2+ years in total) | Using Express Entry pathway after 1 year: 8 months -1 year (2+ years in total) | 2- 4 years | Using Express Entry pathway: 8 months -1 year |
Risk of Rejection | 25% (as per official statistics) | Depends on business. In our experience between 12%-20% | Depends on business. In our experience between 12%-20% | Varies greatly depending on the applicant | Depends on business. In our experience 5%-10% |
Advantages and Disadvantages of Start-Up Visa
It would be best to consider the benefits and drawbacks of this program before taking any further steps. It is crucial to fully understand what this program offers and whether this is the right program for you.
Advantages of the Program
Below are some of the pros of the SUV program:
- A direct pathway for permanent residence in Canada.
- Open to all nationalities.
- No limitations on business activities in Canada.
- No net worth requirement or verification.
- Allows for a partnership of 5 individuals in the same start-up (min. 10% of ownership for each partner is required); and
- Opportunity to relocate to Canada by obtaining a work permit while the permanent residence application is processed.
Disadvantages of the Program
Below are some of the cons of the SUV program:
- High competition to obtain support from designated organizations in Canada; thus, it can be challenging to get such support.
- Lengthy processing times (3+ years) to obtain permanent residence.
- High capital investments by the founding partners are often required to secure support from a designated organization.
- An extremely well-developed, viable and scalable business model is needed with a proven track of success; and
- Moderate risk of refusals at the permanent residence stage and/or delays due to peer reviews.
How to Get a Letter of Support for Canadaโs Startup Visa Program
Getting a letter of support from a Canadian Designated Organization is very hard because your start-up needs to show that it has strong market validation or recurring scalable revenue. If you have an innovative idea, relevant skills and capital to execute it, you may want to work with specialized business consultants to develop, test and validate idea first before you seek an endorsement from a designated organization.
To obtain a letter of support for a from a Designated Organization, you can follow the key steps below:
Step 1: Prepare your Pitch Deck (business concept) or a Business Plan.
Step 2: Submit your application to a designated organization for review and evaluation.
Step 3: Undergo an interview with a designated organization.
Step 4: Sign an agreement with the designated organization.
Step 5: Pay the fees for the designated organization.
Step 6: Obtain a Letter of Support from the designated organization(s).
Step 7: Submit your application for permanent residency and work permit.
If you need support with any of the steps above, please reach out to us for help and guidance. We might be able to connect you to the right people and resources who can help you in your immigration journey.
List of Designated Organizations
Depending on the type of designated organization you partner with, you will need to either complete a startup development program or receive funding from them in exchange for equity in your company to receive your letter of support. It is one of the most critical requirements of the SUV. You must obtain a Commitment Certificate and Letter of Support from one or more Venture Capital Funds, Angel Investor Groups, or/and Business Incubators. Here is a completeย list of the designated organizations.
Processing Time for Start-Up Visa Program
SUVย processing timesย can vary depending on the workload of the IRCC. The general guidelines state that the waiting period for the final decision on an application can be between 3 years and 5 years.
Start-Up Visa Canada Costs: Full Review
The costs of the Start-Up Visa program in Canada range between CAD $165,730 to $300,000+, depending on various factors. As mentioned above, the Start-Up Visa program is not the right fit for entrepreneurs who do not have access to capital to invest in their business venture in Canada. Please refer to the sample cost structure below to understand how much money you would need to set aside to fund your Start-Up Visa program application. All fees below are approximate estimates in USD dollars, including the fees that are charged by service providers and various companies providing the SUV Program support:
Pitch Deck Preparation
- $3,000 – $5,000 (if you have your own start-up that is innovative, scalable and generating $500K+ in revenues per year)
- $100,000+ if your start-up does not meet the requirements above (this fee usually includes market research and validating your assumptions in the Canadian market, plus generating initial traction with customers to achieve the market-product fit that Designated Organizations would require)
Fees Charged by Designated Organizations
- Incubators: $40,000+ per company. Learn more about business incubators in our interview with Spark Centre and in our interview with Synergy Labs.
- Angel Investors: $35,000+ per company.
- Venture Capital Funds: $50,000+ per company.ย Find out more about VC companies in our interview with WhiteHaven Securities.
Legal Costs
- Professional Fees (lawyers): approx. $20,000+ per applicant
Government Fees
The SUV application fees are as follows:
- PR: Main Applicant โ $1,540
- PR: Spouse โ $1,040
- PR: Dependent Child โ $150
Business Execution Costs
- These costs will depend on the nature of the business and industry. However, be prepared to set aside at least $100,000+ per applicant to fund the operational costs of your start-up venture while waiting for your permanent residence.
Canada Start-Up Visa Success Rate
If your SUV application is in the right hands, all of the requirements are satisfied, and the necessary documentation is provided, you will be allowed to grow your business in Canada. IRCC states that the SUV program has a generalย success rate of above 75%. However, our team achieved an SUV success rate of 100% in 2023
The rate of approval varies depending on the type of designated organization:
- 78% โ for startups that are supported by business incubators;
- 80% โ for startups that are supported by angel investor networks;
- 43% โ for startups that are supported by venture capital funds.
Delay and Rejection Reasons for Your Start-Up Visa Applicationย
Sometimes, the Immigration Officer may initiate a peer review if the Officer doubts the genuineness or feasibility of the enterprise. The peer review panel will verify if the designated entity has conducted the proper checks and investigations according to industry standards.
Below are some red flags that may result in peer review or even aย refusal of the SUVย application:
- the investing entity has a disproportionately high or low percentage of shares or has little to no role in the legal control of the business;
- the applicant has little to no control or equity in the business;
- most of the applicants are all related to each other or lack experience or education;
- there is no intellectual property brought to the project, and the business plan appears to be very โcookie-cutterโ;
- the designated organization has charged unusually high fees;
- a management team has limited to no startup experience;
- the applicants fail to provide evidence confirming their essential role in the company; and
- the applicant fails to make significant progress on startup during the period when the applicant was lawfully authorized to work in Canada.
In general, make sure that your due diligence process is well-documented and that there is significant evidence available to demonstrate the genuineness and viability of your undertaking. Most importantly, make sure to follow ourย top tipsย to ensure the success of your application.
Get Experienced Advice Before You Apply for Canadaโs Start-Up Visa Program
Sobirovs Law Firm team can help you bring your startup business to Canada with your family and business partners. You can focus on your startup idea, and we focus on your permanent residence in Canada.