Last Updated on December 1, 2020

Israel has one of the most active start-up ecosystems in the world, meaning it has thousands of established innovative companies featuring AI that could thrive with access to the Canadian and U.S. markets through Canada’s Start-Up Visa program.

Israel has an established start-up track record dating back 30 years, from when the government successfully began attracting investment into the public sector. The Israeli Ministry of Economy ranks the country number one for the availability of scientists and engineers, for the numbers of start-ups per capita and venture capital investment per capita.

Data from 2019 puts Israel significantly ahead of the U.S. in terms of venture capital investment per capita, at $414 compared to $282. Israel has one of the world’s leading start-up ecosystems, with over 6,000 start-ups in a country with a population approaching 9 million.

Canada’s Start-Up Visa grants Canadian permanent residence to qualified immigrant entrepreneurs. It aims to recruit innovative entrepreneurs to Canada and introduce them to Canadian investors so these budding entrepreneurs can start their businesses in Canada.

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Under the Canada Start-Up Visa program, three types of private-sector investors are considered: angel investors, venture capital funds, and business incubators. A designated venture capital fund must confirm that it is investing at least $200,000 into the qualifying business.

Candidates can also qualify with two or more commitments from designated venture capital funds totalling $200,000. A designated angel investor group must invest at least $75,000 into the qualifying business.

Candidates can also qualify with two or more investments from angel investor groups totalling $75,000. A designated business incubator must accept the applicant into its business incubator program. It is up to the immigrant investor to develop a viable business plan that will meet the due diligence requirements of these government-approved designated entities.

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That’s usually done with the help of business consultants in Canada’s start-up ecosystem with oversight from experienced corporate business immigration lawyers who can ensure a start-up’s business concept meets all industry-required terms and conditions.

Candidates applying under the Start-Up Visa program can initially come to Canada on a work permit supported by their designated Canadian investor before their application for permanent residence is finalized. 

The basic government-imposed candidate eligibility requirements for the Start-Up Visa program are:

• a qualifying business; 
• a commitment certificate and letter of support from a designated entity; 
• sufficient unencumbered, available and transferable settlement funds to meet settlement funding, and; 
• proficiency in English or French at the minimum Canadian Language Benchmark level 5.  However, it frequently occurs that higher levels of English are needed to meet due diligence requirements imposed by designated entities.

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Ottawa does not give financial support to new Start-Up Visa immigrants. When candidates apply, they need to show evidence they have the finances to support themselves and their dependents in Canada. This money cannot be borrowed. 

Additionally, it often occurs that candidates will need to show additional, sufficient funding to meet start up costs of their business project, as a condition of investment by a designated entity (VC or Angel). 

This is an area where experienced legal consulting will prove invaluable. The amount of settlement funding needed depends on the size of the candidate’s family. 

Settlement Funds Needed Under Start-Up Visa Program

Certainly, the Start-Up Visa program is growing in popularity. In 2019, the total number of new permanent resident approved admissions reached 510, more than double the 250 welcomed in 2018. The figures have been increasing steadily over the last five years.

The Start-Up Visa program also represents an important option for international students, many of whom do not qualify for permanent residence through the skilled worker immigration streams. While Ottawa has taken steps to gear up the Express Entry system to favour international students, they are by no means guaranteed to qualify for a coveted Invitation to Apply under the Comprehensive Ranking System (CRS).

The minimum score needed to qualify has often been over 470, leaving many students unable to qualify even with the support of a job offer from a Canadian employer. These candidates can either sit in the Express Entry pool and hope the minimum score under the CRS falls or they can make the transition from temporary to permanent residence. This is where the Start-Up Visa program becomes an option.

Unlike almost every other federal and provincial-level entrepreneur program which requires a minimum of one or two years of previous experience either owning a business or in top-level management, the Start-Up Visa program does not require previous management experience. 

The support of a government-designated entity is enough. And that support can be either financial or in the form of accepting the candidate into a business incubator program. Immigrants who avail themselves of the Start-Up Visa program consistently report that it is quick, both for the initial work permit and permit residence application.

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With a viable start-up business project, an immigrant entrepreneur can expect it to take about four to six months to secure a commitment certificate or letter of support from a designated entity. Once that letter of support is received, the application for permanent residence can be submitted.

It will then take approximately 18-months to finalize the application through to the issuance of a permanent residence visa.  For the candidate to qualify for permanent residence: 

• The intended business must be incorporated and carrying on business in Canada;
• The candidate must own at least 10 per cent of the voting rights in the corporation, and;
• No other person can hold 50 per cent or more of the voting rights in the corporation.

As many as five candidates can have their permanent residence application supported by the same business investment.  But that can come with a risk. Certain candidates may be designated as essential to the business. If any of the essential candidates withdraw their applications or are refused, all other candidates under the same business investment will see their applications terminated.

Surveys suggest Start-Up Visa candidates usually go on to succeed in Canada, in terms of growing their business, attracting further investment, networking or selling their business for a profit.

Through its Toronto based facilities, Immigration.ca works extensively with industry-acclaimed designated entities in the Canadian start-up ecosystem. The firm provides a range of hands-on business advisory services to help to intend entrepreneur immigrants and their start-up business concept meet all industry requirements. To find out if you qualify for the Start-Up Visa program, click here.