Migration to Canada through Startups
Startup Visa Canada
You may have heard the term “startup” in virtual space and media and wondered what it is and what its purpose is.
Startups refer to businesses and companies that have recently been established based on a new idea and offer new services and products that meet existing needs.
The importance of startups: Besides addressing needs and problems, they also contribute to increased dynamism and economic growth. Therefore, developed countries that have recognized the role and importance of startups provide a suitable environment for their growth by supporting and paying attention to them.
Canada, being one of the advanced countries and among the top eight economies in the world, supports startups and attracts creative individuals with new ideas that have commercial potential from other countries.
In line with this goal, the Canadian government has been implementing immigration programs for several years, specifically targeting individuals with innovative ideas and inventions, along with their families, by granting them residency.
The conditions for obtaining a Canada Startup Visa are as follows:
- The applicant must have an idea with commercial viability.
- The individual should have a minimum language proficiency of CLB 5 in English or French.
- The applicant must demonstrate that they have sufficient funds to support themselves and their family for at least one year in Canada.
It is possible that you have come across the term “startup” in the virtual space and media and may have wondered what a startup is and what its significance is.
Startups refer to businesses and companies that have recently been established based on a new idea and offer new services and products to meet existing needs.
The importance of startups lies not only in addressing needs and problems but also in stimulating economic mobility and growth. Therefore, developed countries that recognize the role and importance of startups provide a suitable environment and support for their growth in their own countries.
Canada, being one of the advanced countries and among the top eight world economies, supports startups and attracts creative individuals with new ideas that have commercial potential from other countries.
In line with this goal, the Canadian government has been implementing immigration programs through startups for several years, granting residence to individuals with innovative ideas, inventions, and their families.
What does an idea with commercialization potential mean?
An idea with commercial viability refers to an idea that can be presented in the form of a business plan and has the potential to attract investors with its technical and economic justification.
CLB5 stands for Canadian
Language Benchmark Level 5, which is equivalent to an IELTS (International English Language Testing System) score of 5. The IELTS exam is scored on a scale of 1 to 9, and achieving a score of IELTS 5 is relatively attainable with some effort and proper language learning classes.
Cost of living in Canada for one year
According to the immigration authorities of the country in 2022, is as follows:
The necessary cost for one year of living in Canada based on the number of family members (in Canadian dollars):
- For one person: $13,310
- For two people: $16,570
- For three people: $20,371
- For four people: $24,733
- For five people: $28,052
- For six people: $31,638
- For seven people: $35,224
- Each additional person: $3,568
Please note that the mentioned amounts are subject to updates from the immigration authorities.
Stages of Startup Immigration to Canada:
Obtaining a startup visa for immigration to Canada involves two main stages:
- Presenting a business idea to a company that is willing to invest and obtaining a Letter of Support (LOS).
- Submitting the application for permanent residency to the Immigration Office of Canada.
How to present a business idea to an investment company?
Initially, the individual needs to present their business idea in the form of a business plan to companies approved by the Canadian immigration authorities. These companies review and approve the business plan, and then send a Commitment Certificate to the Immigration Office of Canada. Subsequently, they provide the individual with a Letter of Support (LOS), based on which the person can request a startup visa and permanent residency from the Immigration Office of Canada.
The three approved investment companies by the Canadian immigration authorities are:
Business Incubators: These companies provide services for the growth of startups. Their services generally fall into three categories: infrastructure, key personnel, and processes. They can modify or rewrite the initial business plan and even provide a business plan. They can also introduce individuals required for the startup process to the applicant and provide facilities such as physical space, access to networks and necessary equipment, laboratories, training courses, etc. Their services are limited, and they charge fees based on the extent of services provided. Incubators, in the startup immigration process to Canada, primarily validate and notify the immigration authorities of the idea and plan. Many Iranian migration companies and immigration lawyers collaborate with these types of companies. Incubators often hold courses before issuing the approval letter to the Immigration Office, and they charge fees for these courses.
Angel Investor Groups: These groups consist of individuals who invest their personal wealth in startups. They are often entrepreneurs or retired individuals with experience in starting businesses, and they may even include lawyers or specialized doctors. Angel investor groups expect a good and high return on investment, and they support ideas and creativity more straightforwardly compared to venture capital funds. In the startup immigration process to Canada, Angel Investor Groups must invest a minimum of CAD 75,000 in an approved idea.
Venture Capital Funds: They invest other people’s money in various businesses and essentially manage the funds. Generally, venture capital funds invest more than angel investor groups. If a business idea has potential for growth or higher profitability, individuals should approach venture capital funds. To convince venture capital funds for investment, having experience in starting a similar business, a reliable management team, and an idea for business expansion are necessary. In the startup immigration process through the Startup Visa, venture capital funds must invest a minimum of CAD 200,000 in an approved idea. Palina Immigration Institute has a partnership agreement with venture capital and angel investor companies for implementing the startup visa process to Canada. These companies handle all the tasks in the immigration process through startup visas, but applicants must meet the initial requirements. The Canadian immigration authorities have a list of approved companies, and only business plans that receive their endorsement can proceed with the immigration process through startups.
Submitting Permanent Residency Application to the Canadian Immigration Office: After the approval of the mentioned companies and reporting it to the Canadian Immigration Office, a document called Letter of Support (LOS) is issued to the applicant, which allows them to apply for permanent residency (PR) from the Canadian federal government. The Letter of Support (LOS) must be issued by one of the mentioned investment companies. The reputation and strength of these companies will have an impact on the decisions made by the reviewing officers. The residency application includes forms and documents that demonstrate the individual’s minimum language proficiency level of CLB 5, the ability to cover living expenses for oneself (and accompanying family members) for one year, and relevant employment records related to the designated startup.
Please note that the translation provided is a general interpretation and may require further verification or adjustment depending on the specific context.
Obtaining Canadian residency through a startup:
The forms and documents of the applicant are reviewed by the Canadian immigration authorities, and if there are no specific issues, the applicant is granted a startup visa (startup visa Canada) and can enter Canada to receive their permanent residency card (PR card).
It should be noted that the Canadian immigration authorities do not send the permanent residency card to Iran or any other country. The individual must enter Canada with the startup visa and then receive the PR card, which is issued in less than 45 days.
An immigration lawyer (immigration consultant) is a person who has undergone specific courses under the supervision of the Canadian immigration authorities and has an official license from this government agency. The immigration lawyer provides consultation and services related to immigration, based on the approval of the immigration authorities. Applicants can check the lawyer’s license status by entering their name on the CICC website.
A startup visa lawyer in Canada is an immigration lawyer specialized in the field of immigration to Canada through startups and has a successful experience in this area. This lawyer has more experience in obtaining residency through startups compared to other immigration lawyers and consultants.
Key Individuals in a Canadian Startup Application:
In a Canadian startup application, in addition to the spouse and children under 22 years old, up to five key individuals can request permanent residency (PR) as part of the startup file. Each startup team can have one or more individuals designated as essential persons and introduce them to the Immigration Office of Canada.
The key individuals are determined by the company that issues the Letter of Support (LOS) for the applicant. The details of the key individuals are mentioned in the Letter of Support (LOS) and the documents submitted by the endorsing company to the immigration authorities (Commitment Certificate). A key individual in each startup is a person who is essential for the continued growth and progress of that startup.
What benefits can a key individual have in a startup?
Key individuals in a startup can enjoy several advantages. Firstly, right after receiving the Letter of Support from the investing company, they can apply for a work visa. They can also request a work permit for their spouse and bring their children under the age of 22 to Canada. Since the process for work permits is shorter than the process for permanent residency (PR), being a key individual in a startup allows the person and their family to enter Canada before the complete evaluation of the PR application.
What are the specific requirements for key individuals in a startup?
Key individuals in a startup are required to provide more funds or financial proof compared to other members of the startup. The amounts specified by the Immigration Office of Canada (as of 2022) are as follows:
Required funds for key individuals based on the number of family members (Canadian dollars):
For one person: $26,620
For two persons: $33,140
For three persons: $40,742
For four persons: $49,466
For five persons: $56,104
For six persons: $63,276
For seven persons: $70,447
For each additional person: $7,172
Please note that these amounts are subject to updates from the immigration authorities.
In addition to the mentioned requirements, it is advisable for key individuals in a startup to meet the following criteria:
Having a higher language proficiency (English or French) compared to other members.
Having educational and employment backgrounds relevant to the presented business plan.
It is important to note that the selection of key individuals in a startup is determined by the investing company.
If the PR application of a key individual is rejected, it affects the other members as well. However, the rejection of a non-key member does not have an impact on the other members’ applications. Therefore, the selection of key individuals in a startup is crucial.
Is it possible to designate all members of a startup as key individuals?
Yes, it is possible. However, it should be noted that with more individuals designated as key persons, the likelihood of rejection for the entire team increases. On the other hand, it is also possible for a startup team to have no designated key individuals. Nonetheless, evidence suggests that having at least one key individual in a startup team plays a significant role in the decision-making process of the permanent residency officer.
Is it possible to purchase a startup in Canada?
The answer to whether it is possible to buy a startup in Canada can be both yes and no. If the intention is to invest in a startup, then yes, it is possible to acquire a startup similar to other Canadian companies and businesses. However, if individuals intend to use the startup immigration pathway to obtain permanent residency, the answer is no. Buying a startup alone cannot be used as a means of immigration through the startup program. The purpose of Canada’s startup immigration program is to attract skilled and innovative individuals.
How long does it take to obtain a startup visa for Canada?
According to the official reports from the Immigration Office of Canada, the processing time for startup applications is approximately 33 months. However, if the translation and submission of documents to the immigration office are done within less than four months and the process is properly organized and planned, it can take about 36 months for a startup immigration application to reach a decision and for the individual to obtain permanent residency in Canada.
What expenses are involved in a Canadian startup?
In general, a Canadian startup does not have any specific expenses except for government fees (e.g., application fees). However, there may be costs associated with different stages of the application process, including:
Costs related to registering a brand or company in Canada
Costs associated with preparing a business plan
Costs for attending training courses related to the business plan, often provided by business incubators
Costs for immigration lawyer services or company services
Other costs may include medical fees, document translation expenses, passport pickup fees, biometric fees (fingerprinting), including the cost of the biometrics appointment fee and travel expenses to the country where the biometrics appointment will take place (usually Turkey). Immigration consulting firms generally consider items 1 to 4 in the final contract amount, which is included in the contract agreement.
What are the advantages of the Canadian Startup Visa?
Low language proficiency requirement (CLB5)
One of the significant challenges for Iranians in starting immigration and non-immigration methods is their language proficiency level. In most immigration methods like Express Entry (Skilled Worker), the primary applicant needs to have a high language proficiency level, such as CLB 7 (IELTS 6), and in this method, it is better to have a higher language proficiency level, preferably IELTS 8, due to intense competition. In most other methods, such as the Skilled Worker category, a language proficiency level of IELTS 6 or higher is required. If someone wants to immigrate to Canada through the educational pathway, they need to provide an IELTS score of 6 to 7. Therefore, compared to other methods, the Canadian Startup Visa does not require a high language proficiency level.
Canadian Startup Visa does not require points or competition
Most immigration methods in Canada, including federal and provincial programs, are either points-based or competitive, meaning the applicant needs to compete with other applicants and win based on the points system to proceed to the execution phase of the immigration process.
The investment and entrepreneurship programs of provinces also follow the same pattern. Although the applicant may invest a significant amount of money to start or purchase a business in Canada, they still need to be accepted or rejected based on their points and competition with other applicants.
However, with the Startup Visa program, the applicant receives a letter of support and can directly apply for permanent residency to the Immigration Office of Canada if they meet the initial requirements, without the need for a points-based system.
The Canadian Startup Visa leads directly to permanent residency (PR) in Canada
Most investment programs in Canada, such as starting a new business (entrepreneurship) or purchasing a business and other provincial investment programs, do not directly lead to permanent residency in Canada. Initially, the applicant is granted a temporary work permit, and after arriving in Canada, they must fulfill certain conditions, which are usually not straightforward. If these conditions are met, it can eventually lead to permanent residency.
However, with the Canadian Startup Visa program, the applicant and their family members obtain Canadian residency directly, and after arriving in Canada, they do not need to fulfill any additional conditions.
The Canadian Startup Visa does not require a high financial guarantee
In most investment programs in Canada, the applicant is required to demonstrate a high capital for business purchase or startup. The required financial guarantee varies among different provinces and different programs, ranging from around $200,000 to $1.6 million Canadian dollars. Additionally, in these programs, the applicant needs to provide detailed information on how they acquired the capital.
In the Startup Visa program, the applicant only needs to demonstrate the ability to cover their and their family’s expenses for the first year of living, which is significantly less compared to other investment programs. Also, since this amount is not used for investment, there is no need to provide the source and location of acquiring it.
With the Startup Visa program, living and working anywhere in Canada is possible
The Startup Visa is a federal program, not a provincial one, which means that after obtaining permanent residency, the applicant and their family can live, work, and study in any city and province of Canada.
Currently, most investment programs in Canada are provincial, so applicants are required to live in the same province where their business is conducted, and they have limitations in terms of living in other provinces. However, the Startup Visa program does not have these limitations.
However, it is important to note that each immigration method has its own advantages and disadvantages, and it heavily depends on the applicant’s circumstances.
Disadvantages of immigrating to Canada through the Startup Visa program
Despite the numerous advantages of immigrating through the startup method, there may be some disadvantages, including:
Higher costs compared to other immigration methods in Canada (excluding investment programs).
Immigration officers pay more attention to these types of cases and have stricter requirements. They also focus extensively on the business plan, where the endorsing entity (investor) and the business plan play a more significant role than the applicant and their conditions in the application.
Due to the sensitivity of these cases, the assessment process may take longer compared to some other immigration methods in Canada.
As mentioned, if key individuals in the startup group are introduced, the fate of the entire group’s application depends on their qualifications. If one of them is rejected, the entire application will be rejected.
In this method, an immigration lawyer plays a crucial role in increasing success and reducing risks. Experienced lawyers and institutions can significantly increase the individual’s chances of success.
Frequently Asked Questions and Answers:
No, for immigration to Canada through the startup method, investment is not required.
No specific educational degree or level has been specified for this method.
Yes, the spouse and children under the age of 22 of the primary applicant can accompany them.
No, you only need to demonstrate that you have the ability to cover the minimum living expenses in Canada for one year.
No, once permanent residency is obtained through the Startup Visa program, there is no further connection or dependency on the specific startup. Therefore, any issues or failures related to the startup will not impact the permanent residency status.
The language proficiency certificate should be provided after receiving the Letter of Support and commencing the residency application process. However, recently, many investor companies are requesting language proficiency certificates from applicants to prevent any issues at the beginning of the process.
At first glance, these companies do not have significant differences in terms of immigration management. It is important that the submitted documents and business plans do not conflict with each other. However, internally, due to the requirement for investments from companies like Angel Investment Company and Venture Capital, the examination by immigration officers may have a more positive outlook on their startup projects.
Yes, you can apply for a work visa after receiving the Letter of Support and before completing the entire startup process.
No, immigration to Canada through the startup pathway is part of the federal programs. This means that the applicant can have residence and settlement anywhere in Canada without any restrictions.
No, it is not mandatory to use the services of a Startup Visa lawyer (immigration lawyer) for the Canadian Startup process. However, most of the mentioned investment companies have contracts with immigration lawyers for this process and are not directly in contact with individuals.