What are the options for entrepreneurs to start a business in Canada?
Posted on March 9, 2021
Recently Canada has made some changes in the policies that will affect the immigration pathways for entrepreneurs. It has decided to remove the Owner/Operator category which was placed under the Temporary Foreign Worker Program (TFWP) will be removed on April 1, 2021. Under this category applicants could earlier apply for a work permit without having to do the advertising requirement for the Labour Market Impact Assessment (LMIA).
So, what are the other options for entrepreneurs to start a business in Canada?
1. Intra-Company Transfer
Under this program an Intra-Company Transfer work permitis given to entrepreneurs who wish to expand an existing foreign business in Canada.
This program is mostly used by multinational companies to transfer management and key personnel between foreign divisions, but it can also be used by entrepreneurs looking to start a business in Canada.
Business owners may use this work permit to split their time between maintaining their current overseas business and establishing a Canadian branch, subsidiary, or affiliate.
- A viability test must be passed by the new Canadian company, which can be done by presenting financial reports, proof of security of the physical premises, and a business plan that includes the hiring of at least one Canadian within the first year of service.
- In terms of ownership structure, the foreign corporation and the Canadian companies must be associated, which means they must have a parent-branch, parent-subsidiary, or affiliate relationship.
- The person being transferred to run the new Canadian business must have worked for at least one year in a similar full-time senior managerial or executive role for the international company that is transferring him.
Under the Canada-United-States-Mexico Agreement (CUSMA) Investor scheme, citizens of the United States or Mexico who invest in new or existing companies in Canada may be eligible for a work permit. This program allows majority shareholders, eligible investors, or sole owners to establish and direct their businesses from within Canada.
To apply, the investor must write a business plan outlining the total amount of money needed to start or buy a business. They must also demonstrate that a substantial portion of these funds has already been allocated to the project. The company is also expected to create employment and support the local economy in other ways.
European investors who qualify for the CETA Investor program are allowed to remain in Canada for a year without the need for an LMIA.
Investors may be eligible if they work for a company in a supervisory or executive capacity that would invest a significant amount of money in a Canadian company.
CUSMA-like clauses are included. A business strategy, large funds should be already invested, and a business that benefits the Canadian economy are all requirements for investors.
Entrepreneurs and self-employed workers who own at least 50% of a seasonal Canadian company are eligible for the Entrepreneurs/Self-employed Work Permit. It may also apply if the owner of a Canadian company wishes to live outside of the country. In such cases, an LMIA may not be needed for the work permit.
These people may be looking for a temporary residency and eventually permanent residency. Applicants must show that their company would support Canadians in a significant economic, social, or cultural way.
These are some of the options open to entrepreneurs who wish to set up a business in Canada.