On this page you will find
- How IRCC treats job offers from home-based businesses
- What makes an employer actively engaged in a business
- Why a physical workplace is no longer the key issue
- How IRCC assesses small and newly established businesses
- What evidence employers may need to provide
- Why shell companies cannot support genuine work permit applications
Canada has clarified that home-based businesses can make genuine job offers to foreign workers under the country’s employer-specific work permit system.
Immigration, Refugees and Citizenship Canada updated its instructions on September 17, 2026, setting out how officers should assess whether an employer is genuinely operating a business and whether a job offer is legitimate.
The new guidance makes clear that operating from a residential address does not, by itself, make an employer or job offer questionable.
IRCC says offers from businesses operating from home can be genuine and officers should consider the residential address alongside the nature of the business and the wider evidence showing that the company is actively operating.
The instructions also tell officers to take a broader approach when assessing businesses, while drawing a clear distinction between genuine small or home-based companies and businesses that exist only on paper to facilitate the entry of foreign workers.
Home-Based Businesses Can Support Work Permit Applications
IRCC’s updated instructions explicitly address businesses operating from residential addresses.
The department gives the example of a small meal-delivery company operating from the owner’s home and seeking to hire a cook.
In that example, IRCC says the fact that the company operates from home is not itself a problem.
Instead, the concern arises because the employer cannot provide enough evidence showing regular business activity, including consistent employee payments, ongoing purchases of goods and a stable place where the temporary foreign worker would work.
IRCC says offers from businesses operating from residential addresses may be genuine.
Officers must consider the type of business involved.
For example, IRCC says it may be reasonable for a business selling handmade products or providing digital services to operate from home. By contrast, restaurants and other larger commercial operations would normally require more space.
IRCC Takes A Wider Approach To Business Locations
The updated instructions also change the emphasis placed on an employer’s physical location.
IRCC now lists having a physical Canadian business address as one possible indication that a company is actively engaged in business.
However, the instructions specifically note that the business address may be different from the location where the employee actually works.
The previous version of the instructions required an employer to have a physical Canadian location where the foreign worker would work.
That requirement no longer appears in the revised guidance.
The change could be important for businesses whose employees work remotely, at client sites, from multiple locations or from premises other than the company’s registered address.
However, employers must still show that they genuinely operate a business and actively provide goods or services.
What Does IRCC Mean By An ‘Actively Engaged’ Employer?
Employer-specific work permit applications must meet four job offer genuineness tests.
One of those tests requires the employer to be actively engaged in the business connected to the job offer.
IRCC says officers must determine whether the organization does more than simply exist legally.
The employer must also show that it genuinely provides goods or services.
Examples of factors indicating active engagement can include:
- Operating an active business
- Providing goods or services
- Having a physical address in Canada
- Employing workers
- Generating business income
- Holding required licences and permits
- Having contracts or other evidence of ongoing commercial activity
No single factor will necessarily decide the case.
Officers Told To Take A Holistic Approach
IRCC now explicitly tells immigration officers not to rely too heavily on any one piece of evidence.
The department says a single factor may not definitively show whether an employer is actively engaged in business.
Instead, officers should consider all relevant evidence together before reaching a decision.
This could be particularly important for newer or smaller businesses.
A recently established company may not yet have years of tax records, a large workforce or extensive financial documentation.
Similarly, a home-based company may not have a commercial lease.
Those factors do not automatically mean the employer is not genuine.
However, the employer may need to provide other evidence showing that it genuinely conducts business.
What Evidence Can IRCC Request From Employers?
Officers can conduct a more detailed assessment where they have concerns about whether an employer is actively operating.
IRCC says closer scrutiny may occur where:
- A business is less than one year old
- Public information raises concerns about the company
- An internet search suggests that the business has closed
- Previous IRCC records contain negative information
- Earlier temporary foreign worker checks produced negative findings
- The employer appears on Canada’s list of non-compliant employers
Officers can request additional evidence directly from employers and can also review information from government departments and publicly available sources.
IRCC says supporting documents can include a Canada Revenue Agency business number, business licences, tax and income documents, contracts and other records showing that the organization actively carries out business.
New Businesses Can Face Greater Scrutiny
A new business can still support an employer-specific work permit application, but it may have less historical evidence available to demonstrate that it is operating.
IRCC’s own example involves a five-month-old meal-delivery company with two employees.
The company operates from the owner’s home, has little online presence and cannot provide T4 slips because it is too new.
The employer also cannot provide a commercial lease.
IRCC stresses that those factors do not automatically make the company illegitimate.
The problem in the example is the wider lack of evidence showing reliable employee payments, regular purchases and stable commercial activity.
This illustrates IRCC’s broader approach – officers should examine the full circumstances rather than refusing an application because of one feature such as a residential address.
Shell Companies Cannot Support Genuine Job Offers
While IRCC has clarified that home-based and small businesses can make genuine job offers, it has also strengthened its guidance on companies that exist primarily for immigration purposes.
The updated instructions say a company with no employees that exists only in name and was created specifically to facilitate the entry of foreign nationals does not qualify as an operating business.
This distinction is important.
A small business, start-up or home-based company is not automatically problematic because of its size or location.
However, employers must be able to demonstrate genuine commercial activity.
Creating a company on paper solely to support a foreign worker’s entry into Canada will not satisfy IRCC’s active business requirement.
IRCC Uses Four Tests To Assess Job Offers
The active business requirement is only one part of IRCC’s job offer assessment.
For every employer-specific work permit, officers assess four factors:
- Whether the employer is actively engaged in the business.
- Whether the job offer reflects a reasonable employment need.
- Whether the employer can fulfil the terms of the employment offer.
- Whether the employer or recruiter has complied with applicable federal and provincial or territorial employment and recruitment laws.
If an offer fails any one of these tests, IRCC can refuse the work permit application.
The rules apply to employer-specific permits under both the Temporary Foreign Worker Program and the International Mobility Program.
Open work permits are not subject to the same job offer genuineness assessment because they are not tied to a specific employer.
Employers Must Show The Job Makes Business Sense
Even where IRCC accepts that a company genuinely operates, the department must also be satisfied that the proposed job fits the employer’s business.
IRCC says the position should make sense considering the type and size of the company.
For example, its guidance identifies potential concerns where a catering company seeks to hire a roofer, a small company employs an unusually large number of supervisors or a franchise restaurant seeks to hire a full-time business analyst.
Employers may therefore need to explain why they require the foreign worker and how that position fits into their operations.
Employers Must Also Be Able To Pay Foreign Workers
IRCC officers must also determine whether the employer can fulfil the terms offered to the foreign worker.
That includes being able to provide the promised wages, hours, benefits and working conditions for the duration of the work permit.
Officers can request financial documents including tax records and payroll information where they have doubts about the employer’s ability to pay.
IRCC gives the example of a new meal-delivery company that earned only $10,000 in profit but proposes to pay a foreign worker $45,000 per year.
Unless the employer can provide additional evidence showing that it has the financial resources to meet that commitment, the officer may conclude that the company cannot fulfil the job offer.
What The Change Means For Employers And Foreign Workers
The revised instructions give officers more detailed guidance for distinguishing legitimate small and home-based businesses from employers that cannot demonstrate genuine commercial activity.
The changes are particularly relevant as remote work and home-based businesses become more common.
A residential business address does not automatically prevent an employer from supporting a foreign worker.
Nor does the absence of a traditional workplace necessarily mean a job offer is not genuine.
However, employers must still be able to show that they genuinely conduct business, need the employee they want to hire and have the resources to meet the terms of the employment offer.
The central question for IRCC is therefore not simply where the business operates, but whether the evidence shows that it is a genuine, active business with a genuine need for the foreign worker.
Frequently Asked Questions
Can a home-based business hire a foreign worker in Canada?
Yes. IRCC says a job offer from a business operating from a residential address can be genuine. Officers must consider the type of business and the wider evidence showing that it actively operates rather than treating a home address alone as a reason to question the offer.
Does an employer need a commercial office to support a work permit?
Not necessarily. IRCC now says a physical Canadian business address is one possible sign of active business activity, and the business address may differ from where the employee works. Employers must still provide enough evidence to show that they genuinely operate and provide goods or services.
What evidence can a home-based business provide to IRCC?
Evidence can include a CRA business number, licences or permits, tax and income documents, customer or supplier contracts and other records showing ongoing commercial activity. The documents required will depend on the nature, age and size of the business and the concerns raised by the officer.
Can a new business hire a temporary foreign worker?
Potentially. A new business does not automatically fail IRCC’s genuineness test. However, because newer businesses may have limited financial or employment history, officers may seek additional evidence showing genuine operations, a reasonable need for the worker and sufficient resources to meet the terms of the job offer.
Can a company created only to bring a foreign worker to Canada support a work permit?
No. IRCC says a company with no employees that exists only in name and was created specifically to facilitate the entry of foreign nationals does not qualify as an operating business. Employers must demonstrate real commercial activity and satisfy all four of IRCC’s job offer genuineness factors.