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Jain Immigration Law is online! We can assist you and communicate with you at your convenience via Zoom, Microsoft Teams, or by telephone. Contact us to book a consultation.
In this article, I’ll discuss two main options for immigration to Canada by investment: the federal Start-up Visa Program and the Ontario Entrepreneur Program.
First, why consider Canada? There are many reasons. Canada embraces diversity. More than tolerance, the nation celebrates multiculturalism. Also, major Canadian cities are regularly ranked as some of the most livable cities in the world (so there is a very high standard of living). We have universal (free) health care and excellent educational institutions. Canada also has a stable political climate and all major political parties are pro-immigration. Our country also has a strong banking system with sound regulations (which helped protect Canada from the last recession). In terms of real estate, residential homes have dramatically increased in value – tax free – over time and should continue to do so given high immigration.
Permanent Residence and Business Immigration
Let me next talk about what status these to programs lead to. Both programs result in Permanent Residence. A Permanent Resident (“PR”) is like a Canadian citizen but cannot vote. A PR can work anywhere in Canada without sponsorship and can open any business. A PR gets free healthcare and the kids get free education up to grade 12. Also, a PR can live anywhere in Canada.
There are some PR “residency obligations” of which you should be aware. For instance, a PR must live in Canada 2 years (cumulative, not consecutive) within 5 years to maintain their PR residency obligations. Interestingly, every day spent with a Canadian citizen spouse abroad counts as a day in Canada.
Also, either spouse can be the main applicant and the whole family immigrates, including adult children under 22 years old (options exist for those over 22, for instance as international students). A major advantage is the savings on university/college tuition fees. At the University of Toronto, domestic fees for the Faculty of Arts & Science, for example, currently cost just over $6,000 whereas international students are charged 10x more at closer to $60,000. Over 4 years, the savings is therefore $216,000 per child which is comparable to the overall cost of immigrating under some business immigration programs. Finally, as a PR, visas are no longer needed to come to Canada.
In terms of citizenship (a Canadian Passport), living in Canada as a PR for 3 years cumulatively leads to Canadian Citizenship. If you lived here in temporary status before becoming a PR, it’s possible to apply for citizenship after living in Canada as a PR for as little as 2 years.
The Start-up Visa Program
The Immigration Department’s website describes the Start-Up Visa (“SUV”) Program as one which targets immigrant entrepreneurs with the skills and potential to build businesses in Canada that are innovative, create jobs for Canadians, and compete on a global scale.
A major benefit of the SUV Program is unconditional Permanent Residence. Previous federal entrepreneur programs and many Provincial Nominee Programs are conditional, meaning that full permanent residence is only granted after 2 years and after the creation of one or two jobs.
Why Immigrate to Canada with Your Startup?
Why Canada for startups? Canada is attractive for having a well-established startup ecosystem and a strong capital market to support entrepreneurial immigrants. There is no need for a Canadian ‘sponsoring company’ or ‘local business partner.’
We are aware that there are many “agents” and “consultants” who do not partner with proper Canadian lawyers. Unlike the United States, Germany and many other countries, Canada allows non-lawyers to practice immigration law “immigration consultants.” But there are also “ghost” non-registered consultants who attempt to illegally practice law. Proper immigration lawyers usually complete a university degree and then must pass rigorous admission criteria to attend a 3 year law school in-person degree and then must pass exams to be ‘called to the bar.’ The requirements for even registered immigration consultants are not as rigorous. Furthermore, lawyers learn about corporate law, administrative law and many other areas of law which sometimes intersect with immigration law (family, criminal law), etc. Lawyers have a lot to lose given the investment in their education. Professional ethics are instilled throughout their education. Put simply, be wary of those who sell business plans and promise PR with low investments which cannot realistically cover the costs of the various professionals involved.
Immigration Minister Sean Fraser spoke about the SUV Program at the Collision Conference in Toronto on June 21, 2022. He made these comments: “The SUV program if properly deployed has tremendous potential to bring in leading foreign skills that can create future jobs in Canada and promote innovation.” However, he also said that it’s unacceptable to use the SUV Program as a way to buy a passport and that going forward, the government will identify those cases which lacked merit. He also said that participating companies should expect an increase in capitalization requirements. What is clear is that there will be a higher level of scrutiny going forward. Trying to buy a Letter of Support for a relatively small amount of money will no longer work. While an active business isn’t strictly required as the rules currently stand, successful cases will have some active capital in place.
Section 89 of the Immigration and Refugee Protection Act Regulations states that “an applicant in the start-up business class is not considered to have met the applicable requirements… if… one or more transactions… were entered primarily for the purpose of acquiring a status or privilege under the Act rather than (b)… for the purpose of engaging in the business activity for which a commitment… was intended.” This means that while the officer processes the application, applicants must show genuine intent and active engagement. Having said that, participants need not be in Canada and they can remotely go through workshops focusing on quantitative and qualitative analysis, ‘go-to’ market strategies, applying for government grants, etc. If work permits are desired, counsel must provide advice. Support is provided relating to doing business in Canada which can involve office space networking with potential partners and investors.
The levels plan groups the SUV Program with the Self-employed Program. The combined group was allocated a target of 750 spots for each year in the 2020-2022 Levels Plan. The 2021-2023 Levels Plan increased the target to 1,000 spots for each of the three years. The 2022-2024 Levels Plan left the target flat at 1,000 spots for the first two years only increasing the target to 1,500 in 2024. Without a dramatic change, processing times would have ballooned. I also wrote a featured article for the Canadian Immigration Lawyers Association: Canada’s Start-up Visa Program: A simple fix before it’s too late, August 2, 2022.
I also wrote an article on July 22, 2022 saying: “The government should more than double the target for these applicants in the next Levels Plan.” I wrote that there is urgency with respect to start-ups and co-applicants need to start working together in Canada, alongside one another, to make the business successful. On November 1, 2022, the most recent 2023-2025 Levels Plan did just that, more than doubling the numbers and increasing the target to 3,500 in 2023, 5,000 in 2024 and 6,000 in 2025. The recent change should help ensure that the 2 year processing standard remains.
The Ontario Entrepreneur Program
This Program is for those who wish to start a new business or buy an existing business. Interestingly, you may add one foreign partner.
There are two steps. First, an applicant must submit an Expression of Interest then online application and then attend an interview and sign a performance agreement. Secondly, based on the government Letter of Support, the applicant may apply for a Work Permit then establish a business within 20 months of arriving and submit a final report to get nominated for Permanent Residence.
Requirements of the Ontario Entrepreneur Program
The requiremets of the Program are as follows:
*$200,000 if in information & communications technology / digital communications
If buying a business, the same owner must have operated for at least 5 years. Also, ownership must be wholly transferred and 10% of your investment must be toward improving/expanding the business. Moreover, all current employees must be retained.
Ineligible Businesses for Ontario Entrepreneur Program
Ineligible business are as follows:
If your proposed business will be located in the Greater Toronto Area, the following types are also ineligible:
The language requirement is a Canadian Language Benchmarks of 4 (so quite basic listening, reading, writing and speaking).
Pros and Cons of the SUV versus the Ontario Entrepreneur Program
Some applicants are better suited to the SUV and some are better suited to the Ontario Entrepreneur Program. If your English is not strong, it could be that only the Ontario Entrerpeneur Program can work because the English requirement isn’t a CLB of 5 but rather CLB of 4.
If you need to come to Canada quickly as you have older kids who will start university soon, the Ontario Entrepreneur Program works well because a work visa for you is issued more quickly and your kids can get dependent study permits with tuition fees at local rates. You would still have some flexibility to be in both places as you only have to be here working in your business 75% of the time. For the SUV, you don’t have to come here until you actually become a PR.
The investment requirement is greater for the Ontario Entrepreneur Program but then again, you retain $200,000 equity in a valid, viable business. Finally, the major disadvantage of the SUV is that PR is conditional so you must create or buy a business and maintain employment for one or two employees (depending on where the business is located).