Immigration Manuals

Assessing Canada Start-Up Business Class Application

Colin R. Singer
May 16, 2021

In the Start-Up Business Class, the authorities typically provide membership based on a pass or fail system. In this system, the applicants would need to meet all the minimum qualifying requirements prescribed by the authorities for all criteria. On accomplishing this, they would receive the relevant approvals based on the information and documents they have submitted along with the application. The officers would complete assessing the applications. Thereafter, they would need to determine whether the applicant is a member of the class. If, in their assessment, they find that the applicant is a member of the class, they would need to continue processing the application. Alternatively, they would need to refuse the application.

Applicants would need to show the officers that they (the applicants):

Have a qualifying business
Have the support from a designated Canadian business entity in the form of a Commitment Certificate (or a Letter of Support) that confirms the eligibility of the business relationship
Have sufficient settlement funds that enable them to establish themselves economically in Canada
- These funds must be:
  - Transferrable
  - Available easily and,
  - Unencumbered by debts or other obligations
Meet or exceed the minimum language proficiency requirements of at least Benchmark Level 5 in all the four language skill areas i.e. reading, writing, speaking and listening in either of Canada’s official languages
- For this, the applicants would need to provide evidence by showing original test results from a designated testing agency
Intend to reside in a province or territory other than Quebec

The Criteria Prescribed for a Qualifying Business

A start-up business would need to be a new business that the applicants intends to operate in Canada. In addition, it would need to meet all the applicable criteria of a qualifying business.

For a start-up business to be a qualifying business, a business would need to be:

An incorporated entity and,
Operating in Canada at the time the business owner makes a commitment, as specified in the provisions of MI 7 (1) (refer to Appendix A)

The officers would consider a corporation as a qualifying business is it is:

Incorporated and,
Transacting business in Canada and,
If, at the time of making the commitment:
- The applicant holds 10 percent or more of the voting rights attached to all the outstanding shares of the corporation at that time and,
- No person or entity other than qualified participants possess 50 percent or more of the total voting rights attached to all the outstanding shares of the corporation at that time

In some situations, it is possible that the designated entity might not want to incorporate the company. This is so especially if the individuals identified in the business proposal do not possess the relevant authorisations for coming to Canada. In this scenario, the Ministerial Instructions (MIs) permit the consideration of a qualifying business whose incorporation remains conditional upon the attainment of permanent residence by the applicants. This is in accordance with the provisions specified in MI 7 (2).

In addition, sections 2 (2) (a) and 2 (3) of the Ministerial Instructions (MIs) prescribe additional requirements. They require that the new start-up business must have received a commitment from one of the following:

A designated angel investor group confirming that it is investing at least $75,000 in a qualifying business or two or more angel investor groups confirming that they are jointly investing a total of at least $75,000 in such a business
A designated venture capital fund confirming that it is investing at least $200,000 in a qualifying business or two or more designated venture capital funds confirming that they are jointly investing a sum total of at least $200,000 in such a business or,
A designated business incubator confirming that it is accepting the applicant into its business incubator program

The authorities also require that officers ensure that they are satisfied that only qualified participants own 50 percent or more of the voting rights. The authorities have specified this in the provisions mentioned in MI 7 (1) (b).