Canada is becoming a global leader in high-tech innovation and entrepreneurship. Report after report has ranked Toronto, Waterloo, and Vancouver among the world’s most up-and-coming tech hubs. Canada and its leading cities have seen a substantial rise in their venture capital investments. Overall, Canada ranks fifth among countries in the number of venture capital deals and sixth in venture capital investment, trailing only the United States, India, China, Britain, and Germany.
A dozen or so of Canada’s cities make the list of the world’s 300-plus startup hubs. The largest three – Toronto, Montreal, and Vancouver – rank among the world’s 62 leading global startup hubs. In light of this, the Canadian government has a Start-up Visa Program which is aimed at providing an initiative to entrepreneurs and innovators to choose Canada as their home.
Based on growth, performance, funding, and exit values, Canada is ranked the 25th best startup ecosystem in the world. In fact, outside of Silicon Valley, Waterloo has the highest startup density of any area in the world. And with a combination of economic freedom, low startup costs, government funding, accessible business tools, and plenty of talent, Canada is one of the best places to launch your new venture.
Here are some of the conditions that allow these businesses to grow and achieve success:
- Economic Freedom: Canada falls in the top 10 of the world’s freest economies, beating out both the United Kingdom and the United States. The Index of Economic Freedom takes cultural aspects such as property rights, freedom from corruption, government spending, fiscal freedom, business freedom, labor freedom, monetary freedom, trade freedom, investment freedom, and investment freedom into account when establishing a country’s ranking. This kind of economic environment makes a big impact on business culture and is one reason why Canada bodes well on the startup front.
- Business Start-up Costs & Funding: One factor that drastically contributes to the functioning and performance of startups is the ability to have reasonable start-up costs as well as funding support in the form of grants and loans. Canadian businesses often have the opportunity to apply for government (and other) grants, loans, and financing as a start-up. With different financing options available to startups, Canada offers fantastic support for business and commerce. Some of the grants are regional or industry-specific, while others offer general business support.
- Canadian Economic System: The top 20 Canadian accelerators and incubators have helped attract more than $1.7 billion in follow-on investment and helped facilitate the creation of more than 10,000 new jobs. As such, the Canadian economic system has allowed for many successful startups, and this success will hopefully continue to grow.
- Start-up Business Tools: Startup business tools, such as BizPaL and Salesforce, are another factor that lead to startup success in Canada. BizPaL is a platform that allows startups to search for permits and licenses when they first begin their business journey. It also provides 24/7 support for any questions or concerns business owners may have on regional or federal issues. With Salesforce, people can build highly scalable apps, grow their company with sales, customer service, and marketing solutions, and build a strong company culture all from one powerful platform.
- Talent: Canadian startups would not perform nearly as well without the many university programs offered and the country’s high rate of university completion—Canada ranks first in the proportion of 25 to 64-year-olds with a college education and is tied for seventh place for the proportion of adults with a university education among all 35 OECD countries. These programs produce tech-savvy individuals who enter the job force with big business ideas and marketable skills. Educational and community programs in Canada play a significant role in the success of new and existing startups.
Canada’s Startup Visa program is designed to attract dynamic entrepreneurs around the world, get them into Canada, and give them the support they need (including funding) to build businesses that can compete on a global scale and provide jobs for Canadians.
Entrepreneurs who qualify for the Startup Visa program will be fast-tracked; the goal is to clear successful applicants for entry into Canada within weeks. And the Canadian Entrepreneur Visa grants permanent resident status which can then lead to citizenship.
Step 1: Convincing one of the designated Canadian venture capital fund, angel investor group or business incubator that your business idea is worth investing in:
It’s a good idea to spend some time researching the different groups on the list as different venture capital funds, business incubators and angel investor groups have different objectives and often prefer to invest in specific types of businesses. If the investor, business incubator or angel investor group decides to support your business idea, they will provide you with a letter of support and send a completed Commitment Certificate directly to Immigration, Refugees and Citizenship Canada (IRCC). The Commitment Certificate provides the relevant details of the commitment between you and the investment organization. Once you have your letter of support, you will be ready to apply for a Startup Visa.
You must secure a minimum investment of $200,000 if the investment comes from a designated Canadian venture capital fund and/or a minimum investment of $75,000 if the investment comes from a designated Canadian angel investor group. If you are accepted into a Canadian business incubator program, you don’t need to secure an investment in your new business.
Step 2: Meet the language requirements:
You must be able to communicate and work in English, French or both. Note that you must provide Immigration, Refugees and Citizenship Canada proof of your language proficiency. This means that you must take a language test from an agency approved by Immigration Refugees and Citizenship Canada (IRCC) and meet the minimum level of the Canadian Language Benchmark.
Step 3: Prove that your business meets the ownership requirements:
While up to five people can be the owners of a single business when you apply for a Canadian entrepreneur visa:
- Each applicant must hold at least 10 percent of the voting rights in the business, and
- The designated organization and the applicants must jointly hold more than 50 percent of the voting rights in the business.
Step 4: Have sufficient settlement funds:
This means that you have to be able to prove that you have enough money to support yourself and your family after you come to Canada, as the Canadian government does not provide any financial support to Start-up Visa immigrants. The amount of money you have to have set aside to support your family depends on the size of your family.
Be aware that when you come to Canada you must tell a Canadian official when you arrive if you are carrying more than CAN $10,000. If you are and you don’t tell an official, you can be fined and your funds seized.
The Canadian government understands the risks of starting a new business, thus, if the business fails, the permanent resident status would not be revoked. To learn about the process of applying for this visa, please visit the CIC website or contact us for a FREE consultation.