It is common for any business owner or individual to explore ways of expanding or starting a business in other countries. Fortunately, there are a handful of opportunities available for non-Canadians to start business in Canada.
For anyone seriously considering a business in Canada, you should first ensure that you are prepared as much as possible. Establishing your business in the country will depend on a number of factors. However, having the essentials in order will help to expedite the process. Saving enough money for startup capital, having the proper documentation, and learning about your Canadian status should be your first priorities.
Once you have secured those factors, you should start looking into the various ways you can start your business or expand it into Canada.
How to Start a Business when you Have an Existing non-Canadian Business
In some cases, non-Canadians may already have a business in their home country and want to expand it into Canada.
For foreign corporations, extra-provincial incorporation is required. Each province across Canada has its own registration requirements and procedures for extra-provincial incorporation. You need to go through its required procedure.
If you would like to operate your foreign business in more than one province. You will need to register the business with each separate province. This can be costly and time consuming as there are forms and fees that are required.
In Ontario, you need to have an Agent for Service. This is a person who is an Ontario resident and who is of age (18 years or older), or a corporation whose registered office is in Ontario. You will also need an Ontario-based NUANS name search report; an original Certificate of Status issued by the government of the home jurisdiction, and a covering letter.
How to Start a Business in Canada without living in Canada
You can start a business in Canada even if you do not live in Canada. Canada’s individual provinces have their own policies about what types of businesses can be started and by whom.
For instance, you might only be able to set up a partnership or a corporation with a Canadian citizen in a certain province. In another province, though, the government may allow anyone to start a sole proprietorship, partnership or corporation, whether they are a Canadian citizen or not.
This may seem like a disadvantage, but depending on your situation, it can be advantageous in providing you with alternative options if you cannot meet the regulations of one province for one reason or another.
How to Start a Business by Immigrating
Immigration is another way in which non-Canadians can start a business in Canada. By applying to enter Canada as a business immigrant, you can start your business while living in the country.
The Canadian government runs two types of business immigration programs: the Start-up Visa program and a program for Self-Employed Persons.
Start up Visa
Canada’s new Start-Up Visa program connects immigrant entrepreneurs with experienced private sector organizations that have expertise in working with start-ups. To go through this program, you need to ensure that you follow and meet certain eligibility requirements.
You need to have a qualifying business, a letter of support from a designated organization, meet language requirements, and be financially able to live in Canada. Below, we offer some information on each of the above.
Letter of Support
You will need to secure either support or an investment support from a designated organization – a Canadian angel investor group, venture capital fund or business incubator – to back your business idea. There are specific organizations that are approved to support possible Canadian start-ups through the program.
The assessment process and even the types of businesses selected for review varies from organization to organization. There is no standard process or selection guideline. Depending on the organizations’ requirements, you can expect to interact with them in different ways from presenting in person to submitting a business plan.
You will need to have a qualifying business. This is defined as one that has the commitment and support from a designated organization.
Once you have an organization’s support, you must also fulfill other business ownership requirements. Up to 5 people can apply as owners. In addition, each applicant must hold 10% or more of the voting rights of all shares of the corporation outstanding at that time, and must jointly hold more than 50% of the total voting rights with the qualifying business.
At the time you receive your permanent residence, you need to meet business requirements, as well. You must be active in managing the business within Canada, business operations must happen in the country, and the business must be incorporated in Canada.
When starting a business through the Start-up Visa program, you must meet the required level of Canadian Language Benchmark (CLB) for listening, reading, writing and speaking skills. There are government-approved testing agencies from which to take your language proficiency test. The Canadian government will use those test result submissions to ascertain your level. Note that you can use the results from your test for two years.
Being financially prepared is also essential. You must show that you are financially able and ready to live in Canada before your business even starts generating income. This is important because the Canadian government will not provide Start-up Visa program applicants with financial assistance.
You will also need to show proof of funds via official letters from your banks or financial institutions. Your funds must be in “available funds,” not invested in equity or property, and the money cannot be borrowed from loans, family or friends.
The other second option to start a business in Canada is through the Self-employed program. To qualify for this program, you must have experience in cultural activities or athletics, and be able to make a significant contribution to athletics and culture in Canada. You need at least two years of relevant experience in both areas of athletics and culture, either being self-employed or participating in those fields.
As a self-employed person applying to come into Canada, you will be assessed according to other factors. This includes finance, age and education. Your proficiency in English listening, speaking, writing, and reading, for instance, need to be established with mandatory testing. In addition, you and your family must meet medical and security measurements via medical exams and police certificates.
As a non-Canadian wanting to live in and start a business in Canada, you need to immigrate to Canada. Contact one of our Toronto business lawyers to learn more about the process.