The federal government’s Start-up Visa Program, launched two years ago to lure immigrant entrepreneurs to grow their companies in Canada, is finally picking up steam.
Citizenship and Immigration Canada said Friday that 16 applicants have been approved for permanent residency. They’re behind a total of eight companies, two of which have already been snapped up by larger technology companies.
The government says there are 60 applications currently being processed for permanent residency. These are for entrepreneurs behind 34 projects. An additional 25 projects have secured financial support from dedicated investment groups under the program. The next step is for the entrepreneurs behind those projects to apply for permanent residency. While that’s still a very small number compared to the 2,750 visas set aside each year for start-up entrepreneurs and their families, it wasn’t until last summer that the first applicant was approved.
The process is taking longer than some expected, in part because of the high volume of applicants that potential investors must wade through, as well as the due diligence required, which is even more time consuming when dealing with international companies.
“It’s happening, it’s just happening slowly because there are some challenges,” says Yuri Navarro, executive director of the National Angel Capital Organization (NACO.)
NACO is working on a process, with the support of consultancy KPMG, to help fill in the information gaps and streamline the process of connecting foreign entrepreneurs with angel investors.
The Start-up Visa Program was launched in April 2013 as a five-year pilot, replacing the Federal Entrepreneur Program that started in the 1970s. That program was suspended in 2011, after being considered no longer effective.
To qualify for the Start-up Visa Program, a foreign entrepreneur must first secure a minimum investment of $200,000 from a designated venture-capital funds, or a minimum investment of $75,000 from a designated angel-investor group. There is no set amount of investment required for the incubator stream, but investors can provide funding.
The program links applicants with experienced start-up investors who help support their business expansion. The model is said to be more suited to angels and incubators that invest in earlier-stage funding. Some Canadians investors have shied away from the program, finding it easier and more comfortable putting their money in homegrown companies.