Temporary Work Permits for Entrepreneurs
International entrepreneurs have a range of options to come and work in Canada.
With their innovative ideas and unique business expertise, entrepreneurial foreign workers help the Canadian economy to grow.
Several Canadian permanent resident immigration programs target entrepreneurs, but the process can take longer than it would otherwise be for a temporary stay in Canada. For this reason, many entrepreneurs first enter Canada by obtaining a temporary work permit. Due to the fact that many of Canada’s economic immigration programs value Canadian work experience, entrepreneurs with such experience can leverage this in support of their candidacy or application for Canadian permanent resident status.
Below is an overview of the Canadian LMIA exempt work permit options available to entrepreneurs.
Under the North American Free Trade Agreement (NAFTA), citizens of the United States (U.S.) or Mexico who invest in new or existing businesses in Canada may be eligible to apply for Investor work permits to manage their Canadian business(es). The NAFTA Investor program allows American or Mexican entrepreneurs who have already made a significant investment in a Canadian business, to enter Canada to develop and direct that business. Typically, the investor is the majority shareholder or sole owner of the business in Canada. As part of the application, the investor must prepare a business plan providing details of the total capital required to establish or purchase the business and provide evidence that a significant portion of these funds have already been irrevocably committed to the project. There is an expectation that the business will generate jobs or other benefits to the local economy and will not be purely self-supporting to the investor.
While the NAFTA Investor work permit is only available to citizens of the U.S. and Mexico, other types of entrepreneurial work permits have no such citizenship restrictions.
Entrepreneurs who plan to continue to operate an existing foreign business while also expanding into Canada may qualify for an Intra-Company Transfer work permit. The Intra-Company Transfer program is primarily used by multinational corporations to move management and key staff between branches, but it can also be well suited for entrepreneurs wanting to establish a new business in Canada.
Intra-company transfer is often a preferred option for entrepreneurs who plan to divide their time between managing their current overseas business and starting a new Canadian branch, subsidiary or affiliate. The basic requirements of the program are as follows:
- The new Canadian business must pass a viability test, which can be achieved by providing financial information, evidence that physical premises have been secured, and a business plan that provides for the hire of at least one Canadian citizen or permanent resident during the first year of operations.
- The foreign company and the Canadian businesses must be related in terms of their ownership structure. Specifically, the two companies must have either a parent-branch, parent-subsidiary, or affiliate relationship.
- The person being transferred to manage the new Canadian business must have been employed by the foreign business looking to transfer them for at least one year in a similar full-time senior managerial or executive position.
Other work permit options for business owners
Entrepreneurs investing in a Canadian business that is not related to an existing foreign business may consider a work permit under either the Entrepreneurs/self-employed candidates seeking to operate a business category or a Labour Market Impact Assessment (LMIA)-based work permit for owner operators.
Entrepreneurs/self-employed candidates seeking to operate a business
- An Entrepreneurs/self-employed work permit may be an option for entrepreneurs who are the sole or majority owner of a seasonal Canadian business or in cases where the owner of the Canadian business intends to maintain a primary residence outside Canada. In such cases the work permit could be exempt from the need for a labour market impact assessment.
- Immigration, Refugees and Citizenship Canada (IRCC) is reluctant to issue temporary work permits to business owners who plan to manage a permanent, year-round business in Canada on an indefinite basis. In such a situation, potential applicants may consider either restructuring their business in Canada so that they may become eligible for another type of work permit, or applying for permanent resident status through one of Canada’s business immigration programs.
Owner/Operator LMIA-based work permit.
- Entrepreneurs who are majority owners of a Canadian business and who plan to take an active role in the day-to-day management, may consider an Owner/Operator LMIA-based work permit. A LMIA approval is a document issued by Employment and Social Development Canada (ESDC) confirming that there is a need for a foreign worker to fill the position, and that hiring a foreign worker will have a positive or neutral effect on the local labour market.
- Although the LMIA process typically involves a recruitment period that requires advertising the position extensively in Canada, which can be time consuming, in an owner-operator with majority ownership situation, the advertising requirement is lifted. Instead, the Canadian company must demonstrate that the foreign entrepreneur’s management of the business will actively benefit the local labour market and provide economic stimulus. ESDC officers will consider factors such as job creation, maintaining existing jobs, advancement of the Canadian industry and opportunities for improving the skills of Canadians.
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