Assessing the application (start-up business class)

These instructions show how officers should appropriately assess an application for the start-up business class.

On this page

• Criteria for a qualifying business
• Commitment certificate or letter of support
• Settlement funds
• Official language proficiency

Criteria for a qualifying business

In order to apply, applicants are required by paragraph 98.01(2)(d) and subsection 98.06(1) of the Immigration and Refugee Protection Regulations to have started a qualifying business. This means the applicant must have formed an entity for business/commercial purposes that has an ownership structure that complies with the percentages established by the Minister.

In addition, in order to have a qualifying business, the applicant must meet the following criteria or intend to meet them upon receiving permanent residence:

• the applicant provides active and ongoing management of the business from within Canada^{Footnote 1} 
• an essential part of the business’s operations are conducted in Canada^{Footnote 1} . Such operations include, but are not limited to:
  • physical location
  • facilities
  • equipment
  • inventory
  • warehousing
  • management information systems
  • staff
• the business is incorporated in Canada

A qualifying business meets the required ownership structure if, at the time the commitment is made, both of the following are true:

• each applicant holds 10% or more of the voting rights attached to all shares of the corporation outstanding at that time
• applicants and the designated entity jointly hold more than 50% of the total voting rights attached to all shares of the corporation outstanding at that time

The start-up business must have received a commitment from 1 of the following:

• a designated angel investor group confirming that it is investing at least $75,000 in a qualifying business or 2 or more designated angel investor groups confirming that they are together 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 2 or more designated venture capital funds confirming that they are together investing a total of at least $200,000 in such a business
• a designated business incubator confirming that it is accepting the applicant into its business incubator program.

Officers must also be satisfied that only qualified participants own more than 50% of the voting rights.

Commitment certificate and letter of support

An applicant must demonstrate that they have the support of a designated entity in the form of a commitment certificate and a letter of support. The designated entity will send the commitment certificate, including a term sheet or client agreement, directly to Immigration, Refugees and Citizenship Canada (IRCC). The designated entity will also provide the applicant with a letter of support which must be submitted along with the application.

The commitment certificate must follow all of the following conditions:

• be issued by 1 or more designated entities
• be less than 6 months old on the date of application
• be issued without the designated entity charging a fee to review and assess the business proposal or to assess the business^{Footnote 1} 
• include a term sheet/client agreement
• include details of the amount of the investment and who is investing
• include details of the services to be provided by the designated entity to the applicant
• include details of any fees to be charged to the applicant by the designated entity (or other costs/exchange of funds) and when these fees will be collected
• include information on each applicant (no more than 5 persons may be identified in a commitment to a single business proposal)
• describe the relationship between the applicant and the investment team
• describe the business and the applicant’s role in the business, including the applicant’s title and any tasks the applicant is expected to perform for the company
• identify those considered essential to the business

Officers should ensure that the information in the letter of support is consistent with the information on the commitment certificate and follow up on any discrepancies by requesting clarification from the applicant, the designated entity and/or by initiating a peer review.

While there is no limit to the number of designated entities that can support a commitment, when there are multiple designated entities acting in syndication, only 1 commitment certificate will be issued containing all the details and requirements of all participating designated entities. The lead designated entity is responsible for submitting the commitment certificate to IRCC.

If 1 of the syndicated entities is a designated venture capital fund, then the venture capital fund must act as the lead and the minimum total investment of $200,000 applies. If there are no venture capital funds in the syndication, but there is at least 1 angel investor group, then they must be the lead and the minimum total investment of $75,000 applies.

Spouses and common-law partners

If a spouse/common-law partner is part of the team, they need to be on the commitment certificate and will be processed as a business applicant under a Start-up Visa (SUV) (includes both essential and non-essential). However, if the spouse/common-law partner owns shares in the business, but are not part of the entrepreneurial team, their shares cannot be counted towards those required for the percentage of ownership in the enterprise (requirement is greater than 50%).

If a spouse/common-law partner is not on the team, they may immigrate as a family member of the principal applicant given they meet all requirements.

Essential information required for business incubators

Designated business incubators must ensure that the combined information included on the term sheet or client agreement and the commitment certificate meets all of the following criteria:

• identifies the applicant
• confirms that the applicant’s qualifying business has been accepted into its business incubator program
• specifies the period of time for which the applicant will be in the business incubator program if such a period has been established
• describes the nature of the business operations to be carried out by the applicant
• describes the applicant’s role in the business
• specifies whether the applicant has control over the intellectual property, patents or other assets that the applicant is bringing to the business
• describes the legal and financial structure of the business
• identifies the role of any other person who holds or is expected to hold an interest in the business and describes their role in the business
• confirms that it has performed a due diligence assessment of the applicant and the business, including provenance of funds
• specifies any terms and conditions applicable to its business incubator program or to the commitment
• confirms that the business it has accepted into its business incubator program is a qualifying business
• includes details of the services to be provided by the designated entity to the applicant
• includes details of any fees to be charged to the applicant by the designated entity (or other costs/exchange of funds) and when these fees will be collected

Essential information required for angel investor groups/venture capital funds

Designated angel investor groups and venture capital funds must ensure that the combined information included in the term sheet/client agreement and the commitment certificate meets all of the following criteria:

• identifies the applicant
• describes the nature of the business operations to be carried out by the applicant
• describes the applicant’s role in the business
• specifies whether the applicant has control over the intellectual property, patents or other assets that the applicant is bringing to the business
• describes the legal and financial structure of the business
• identifies the role of any other person who holds or is expected to hold an interest in the business and describe their role in the business
• confirms that the designated angel investor group or the designated venture capital fund has performed a due diligence assessment of the applicant (including provenance of funds), the business and the investment
• confirms that the designated angel investor group or the designated venture capital fund is investing in a business that is a qualifying business
• specifies the amount of the investment and any terms and conditions applicable to the investment or to the commitment
• includes details of the services to be provided by the designated entity to the applicant
• includes details of any fees to be charged to the applicant by the designated entity (or other costs/exchange of funds) and when these fees will be collected

Settlement funds

The applicant must demonstrate they have sufficient funds, excluding any investment made by a designated entity into their business, available for settlement in Canada at the time of application and when the application is finalized. The funds must meet all of the following criteria:

• be available and transferable
• be unencumbered by debts or other obligations
• be sufficient to support the initial establishment in Canada
• must exclude any investment made by a designated entity into the business

For proof of funds, the applicant must obtain official letters from any banks or financial institutions where they are keeping money.

Letter(s) must conform to the following:

• be printed on the financial institution’s letterhead
• include their contact information (address, telephone number and email address)
• include the applicant’s name
• list outstanding debts such as credit card debts and loans
• include, for each current bank and investment account:
  • account numbers
  • the date each account was opened
  • the current balance of each account
  • the average balance for the past 6 months

Sufficient funds are determined according to the applicant’s family size, including both accompanying and non-accompanying family members, using 50% of the current low income cut-off for urban areas with a population of 500,000 or more.

Official language proficiency

The applicant must provide both of the following:

• a copy of the language test approved by IRCC that shows the applicant meets the minimum language level of 5 in the Canadian Language Benchmark in English or the Niveaux de compétence linguistique canadiens in French for each of the 4 language skill areas
• the test results must be less than 2 years old on the date of application

See the language requirements section for evidence of language proficiency.