3 options to start a business in Canada
Posted on March 24, 2020
If you are from outside Canada and want to start a business in the country, what are the options that you have? If you already have an established business in your country, you can look at expanding your business in Canada. The other option is to start a new business after moving into the country. The third option is to start a business in Canada but from outside the country. Let us look at each of these options in more detail.
Expanding an established business in Canada:
The process of expanding an established foreign business in Canada is straightforward with every province having its own registration procedure and fees. If you are a non-Canadian and wish to open your business in the province of Alberta, then you must register your business as an extra provincial corporation in the province. For this you will need an Agent for Service who can either be an individual above 18 years who is living in the province or a corporation with a registered office in the province.
If you wish to do business in different provinces, then you must follow the required procedure for each province.
Starting a new business in Canada:
If you are a non-Canadian and want to start a new business or company in Canada, then you can use the country’s startup visa program.
This program encourages immigrant entrepreneurs to develop their startups in Canada. Successful applicants can tie up with private companies in Canada and receive help on funding and guidance on running their business.
However, this visa program has specific guidelines on the ownership and shareholding requirements for a startup.
Eligibility requirements for visa applicants are:
- Have proof that the business has the required support
- Must fulfil the ownership requirements
- Must have the required proficiency in English or French
- Must have completed at least one year of post-secondary education
- Must have enough funds to settle in Canada and support dependent family members
- Must clear the medical tests and security requirements
Applicants for this visa must have the support or sponsorship of a specified Canadian venture capital fund, angel investor or business incubator to qualify for the visa.
The IRCC has designated specific venture capital funds, investor groups and business incubators to be part of this visa program.
Startups that succeed in getting through this program must be able to get the minimum required investment. If it is from a venture capital fund, minimum investment should be USD 200,000. If the investment is from an angel investor group, the investment should be at least USD 75,000. Applicants must also be a member of a Canadian business incubator program.
Applicants need not invest their own money in the business. Individuals who are granted PR visas through this program will retain their PR visa even if their startup is unsuccessful.
Starting a business from outside Canada:
Even if you are not a Canadian citizen or a permanent resident, and not living in Canada, you can still start a business in Canada. But you will have to be clear about the rules about who can and cannot start certain types of business in Canada. These rules are specific to each province. Some provinces like British Columbia have flexible rules regarding businesses by non-residents which can be started on a sole proprietorship basis.
To start a business in any province where a non-Canadian is not allowed, you can start the business by getting into a partnership or corporation agreement with one or more citizens or landed immigrants in Canada. You will first have to register your partnership or corporation in the province.
Canada has many programs to encourage foreign businesses and entrepreneurs to establish their business in the country. There are various schemes to encourage non-Canadians to make use of the strong and stable business environment and set up their business venture.