Canada Lays Out Welcome Mat for Entrepreneurs
With a new plan to fast track visas and provide venture capital support, the Canadian government is hoping to attract individuals with the potential to positively impact Canada’s economy.
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The Startup Visa Program is designed to not only assist international business professionals with a more streamlined, faster immigration process, but to partner them with Canadian private-sector organizations right off the mark. These sector partners have experience in working with startups, can offer an array of resources to support immigrant entrepreneurs, and are directly networked in with CIC to fast track visa applications.
“Our new Startup Visa will help make Canada the destination of choice for the world’s best and brightest to launch their companies,” says Citizenship, Immigration and Multiculturalism Minister Jason Kenney. “Recruiting dynamic entrepreneurs from around the world will help Canada remain competitive in the global economy.”
The Startup Visa Program adds a powerful incentive to attract individuals with national and global potential to positively impact Canada’s economy and employment. By seeking immigrant entrepreneurs, assisting them with permanent residency (not conditional temporary residency), and giving them immediate access to established Canadian business partners, Canada is positioning itself as the ideal destination for startups.
Venture Capital Support
While a faster, more flexible immigration path is important to those considering setting-up shop in Canada, supporting international entrepreneurs via private-sector organizations is vital to insuring the long-term success of both investor and entrepreneur.
The Startup Visa will require the support of a Canadian angel investor group of venture capital funds before an individual can apply to the Program. Initially, CIC will collaborate with two umbrella groups: Canada’s Venture Capital & Private Equity Association (CVCA) and the National Angel Capital Organization (NACO). These groups will identify which members of their associations will be eligible to participate in the Program. CIC is also working with the Canadian Association of Business Incubation (CABI) to include business incubators in the list of eligible organizations.
“CVCA is honored to partner with the government of Canada in the launch of the Startup Visa Program,” says Peter van der Velden, president of the CVCA and managing general partner of Lumira Capital. “Through this program, we want to attract high-quality entrepreneurs from around the globe and help build best-in-class companies in Canada.”
NACO Board Chair Michelle Scarborough says, “We’re excited to be a part of the Startup Visa Program. Working with CIC and angel groups across the country, this initiative will create Canadian jobs and position Canada as a leader in innovation.”
How It Works
Foreign entrepreneurs will require the support of a Canadian angel investor group, venture capital fund, or a business incubator before they can apply to the Startup Visa Program. This relationship will help these workers fulfill their potential and maximize their impact on Canada’s labor market. They will also have to meet certain criteria regarding language proficiency and educational qualifications.
Project umbrella organizations — through agreements with CIC — will then recommend which of their members should be designated as eligible to participate in the Startup Visa Program, establish expert peer review panels to assist CIC officers in case determinations, and provide assurance that industry standards of due diligence are followed.
There are basic criteria in place for selecting these newcomers. Applicants will have to have an intermediate language benchmark of five, which means they can basically function in the Canadian economy. While this is not perfect fluency, it does ensure that they can communicate in French or English. Also, applicants will need to have completed at least one year of postsecondary education.
For those sponsored by a member or company in the Canadian Venture Capital Association, applicants will have to have been a full member in good standing as of October 2012. If applicants are managing $40 million or more and were a member last October, they will automatically be in a position to recommend participants in the program. If managing less than $40 million in assets, they will go through a process in front of a peer review panel to ensure that they are a credible company. For the NACO organization, there will be a panel of NACO members who will review applications and recommend applicants for permanent residency based on certain criteria that we’re agreed on with NACO.
If the Canadian Association of Business Incubation agreement is finalized, the scenario here is a bit different. If a company wants to sponsor someone from abroad to begin a startup in Canada as a permanent resident, that company has to have been accepted into a designated incubator program or received a funding commitment of at least $75,000 from a designated angel investor network.
The specific criteria set up by Citizenship and Immigration Canada has been established to insure the high quality of applicants and to protect the program from potential abuse. Initially, the Startup Visa Program will operate under a five-year pilot plan. If, as expected, it proves successful, CIC may formally introduce it as a new economic class in the Immigration and Refugee Protection Regulations.
Immigration continues to be recognized as an important force in the Canadian economy, vital to both creating and supporting employment.
According to Minister Kenney, Canada already has an immigration program accommodating a quarter of a million new permanent residents a year. The new Startup Visa Program will facilitate an influx of legitimate startup entrepreneurs.
“Jobs, growth, and long-term prosperity remain priorities for the government of Canada, and this new Startup Visa Program underscores our commitment to supporting innovation and entrepreneurship in the Canadian labor market,” says Minister Kenney. With this program, Canada will encourage international entrepreneurs to make Canada their new home and to contribute in the long term to Canada’s growth and economic success.
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