Canada StartupVisa Cost &
Types of Startup Visa | CAN Pathways
Are you an entrepreneur looking to start a business in Canada?
Determining the cost of a Canada Startup Visa can be complex and unclear. In this article, we will explore the fees associated with the Canada Startup Visa program, including hidden costs and fees charged by designated agencies, business consultants, and legal services.
What is the Canada Startup Visa Program?
The Canada Startup Visa Program is designed for innovative entrepreneurs who want to establish a business in Canada and create jobs for Canadians. It provides a unique pathway to permanent residency for entrepreneurs who can obtain the support of a designated Canadian organization such as an angel investor, venture capital firm, or business incubator.
Types of Startup Visas in Canada
The Startup Visa Canada program is open to various innovative businesses, provided they meet the program’s requirements. There are two types of startups under this program: real startups and conceptual startups. But what is the difference between the two?
A real startup and a conceptual startup in Canada differ in terms of their development stages and operational status:
1. Canada Real Startup Visa
Established: A real startup is already founded and operational.
Product/Service: It typically provides an actual product or service to customers.
Team: A real startup usually has a team of founders and employees actively working on the business.
Market Validation: It may have validated its business idea or concept in the market.
Revenue Generation: A real startup may have begun generating revenue.
2. Canada Conceptual Startup Visa
These startups attempt to develop a product or service and sometimes invest in marketing, media coverage, product or service development, and research. Occasionally, they appear to have clients or business partners. Here are the key characteristics of a conceptual startup:
Idea Stage: A conceptual startup is in the initial idea or planning phase.
Not Yet Established: It has not been officially founded or registered as a business.
Product/Service Development: It is currently developing its product or service.
Limited or No Team: A conceptual startup generally lacks a complete team, often comprising only one or a few founders.
No Revenue: It has not yet generated any revenue.
In many cases, investors seeking a passive pathway to permanent residency in Canada join groups of conceptual startups under the Canadian startup visa. Their capital is used to invest in the development of a product or service and to cover some costs of the designated organizations involved in the startup project. After the IRCC approves their permanent residence, group members typically do not continue with the startup.
Both real and conceptual startups can benefit from the Startup Visa Canada program. However, the IRCC requirements, application processes, and associated costs differ based on the stage of development and the support in place.
What are the costs associated with the Canada Startup Visa?
The Canada Startup Visa Program aims to attract entrepreneurs with innovative business ideas to Canada. While there isn't a fixed cost for real or conceptual startups, applicants must meet specific fees and financial requirements associated with the program.
Here, we outline the costs involved in the Canada Startup Visa, noting that not all startup groups will incur these expenses. However, we provide a comprehensive description for all groups based on the applicant’s profile, nationality, and type of startup.
- Venture Capital: "Pay-to-play" refers to a situation where existing investors in a company must contribute additional funds in subsequent funding rounds to maintain their ownership interest and voting rights. This strategy is sometimes used to encourage continued investment in the company.
- Accelerators and Incubators: Participating companies may be required to pay a fee or forfeit equity to access the resources, networking opportunities, and mentorship offered by certain accelerators and incubators. This can be considered a form of "pay to play."
- Co-Working Spaces and Shared Services: Providers of shared workspaces or other services for startups may charge an entrance fee for access to their infrastructure, facilities, or business support services. Startups may need to "pay to play" to take advantage of these shared resources.
- Networking and Events: Conferences, industry-specific gatherings, and corporate networking events may charge admission fees or require tickets to provide access to industry insights and networking opportunities. In these cases, paying for admission can be considered "paying to play."
It is crucial for business owners and startups to carefully evaluate the terms and conditions of any “pay to play” agreement. While these agreements can offer valuable resources and opportunities, it is essential to assess whether the costs associated with the Canada Startup Visa outweigh the benefits and to ensure the terms are reasonable and transparent. Startups should also be aware of any potential obligations or risks, particularly concerning equity or investment requirements.
If you do not know the previous founders, such as family or friends, you can expect to pay between CAD 75,000 and CAD 250,000 to join a ready and qualified startup visa group. This amount varies based on your nationality, region of residence, and background as an investor. Payments are typically made in stages rather than upfront. Real startup founders with their own startups do not incur these fees.
The next step involves paying the cost of obtaining a letter of support. To apply for a startup visa, you need a letter of support from a designated organization, such as venture capital funds, angel investor groups, or business incubators. These organizations play a crucial role and have specific requirements.
You must convince them that your business idea is worth the investment, whether financial or educational, which may include providing a detailed business plan. Once they approve your plan, they will issue a letter of support and a commitment certificate to IRCC, both required for obtaining permanent residence in Canada.
The minimum investment commitment from these organizations is $200,000 for venture capital funds, $75,000 for angel investor groups, or no investment commitment for business incubators.
The costs associated with these designated organizations helping and evaluating the startup group to obtain a letter of support vary. There are 76 designated organizations listed on the official Immigration Canada website, but it is crucial to know which ones to collaborate with and which to avoid.
No startup group can avoid the fees charged by designated organizations (angel investors, business incubators, or venture capital firms). Whether you seek a letter of support from any of them, these organizations usually charge a fee to cover their costs for implementing this startup program.
For real startups, the fee for obtaining a letter of support typically ranges from $10,000 to $20,000, while for conceptual startups, it can range from $30,000 to $100,000. These costs are usually divided among the founders or shareholders of the group and apply per person if you are the sole founder of the startup.
A few designated organizations offer a fee-free letter of support for their accelerator programs if you have sufficient business revenue (at least $100,000) and a strong, innovative business idea that can be part of their portfolio. In return, they receive a share in your startup business, accept you into their accelerator program, and issue a letter of support.
In some cases, the "Pay-To-Play" fee to join a startup group covers the costs of a designated organization or business consultant to obtain a letter of support. Real startups sometimes pay these fees if their business concept needs to be more innovative. To succeed, they may need external help (from a business consultant) to get letters of support from designated organizations. In some instances, real startups pay business consultants to gain entry into a low-cost designated organization. This can be a win-win situation, even considering the consultant's fee, which can range from $15,000 to $35,000.
The next significant expense is the investment in the startup business itself. Whether you are part of a real startup or a conceptual startup group, you must actively launch and operate your startup business to strengthen your case in the immigration process for obtaining Canadian permanent residence.
Real startups typically fund their business out of pocket unless they have a group of investors backing them. Conceptual startups, on the other hand, rely on investor funds. At the higher end, if an individual has invested between $200,000 and $250,000, this often includes a co-founder's investment in the business.
This is a significant cost associated with the Canada Startup Visa that should not be underestimated. It is essential to plan for this expense. IRCC does not favor startup groups that are inactive or merely waiting to obtain permanent residence without engaging in business activities. Such inactivity can result in prolonged processing times, as IRCC does not grant permanent residence to all startup visa applicants.
Canada’s startup visa approval rate is approximately 25%. Most successful applicants are chosen based on the human capital factor, which includes the founders' profiles in terms of university degrees, professional work experience, and entrepreneurial background.
The costs associated with the IRCC typically include processing fees for you and everyone listed on your application, the Right of Permanent Residence Fee (RPRF), biometric fees, and fees from third parties (such as translation services or travel expenses for taking the biometric test).
The specific fees are as follows:
- Principal Applicant:
Processing fee: CAD 1,625
Right of Permanent Residence Fee (RPRF): CAD 515
Right of Permanent Residence Fee (RPRF): CAD 515
- Spouse or Partner of the Principal Applicant:
Processing fee: CAD 850
Right of Permanent Residence Fee (RPRF): CAD 515
- Dependent Children:
Processing fee and RPRF: CAD 230 per child
- Biometric Fee:
CAD 85 for the principal applicant
CAD 170 for the entire family, if applied at the same time and place
These fees cover various administrative costs associated with processing your application and granting permanent residence status.
CAN Pathways Support for the Canada Startup Visa Program
At CAN Pathways, we offer expert immigration consultancy services to guide entrepreneurs through the Canada Startup Visa process. Our services include:
Eligibility Assessment
Determining if you qualify for the Startup Visa program based on your business idea and background.
Business Plan Development
Assisting in the creation of a detailed business plan that aligns with Canadian market needs.
Connecting with Designated Organizations
Helping you connect with business incubators, angel investors, or venture capital funds.
Application Preparation
Ensuring your visa application is complete with all necessary documentation.
Service Fees: CAN Pathways’ professional fees depend on the complexity of your case and the services you require. Please contact us for a personalized quote.
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