Julien Tetrault: It might seem a bit odd; there is no financial requirement from applicants; there's simply none whatsoever. The program has three streams, including the incubator stream that is chosen by about 80% of applicants. There is no financial requirement from anyone as long as the technology is approved and that you have a letter of support from a Canadian incubator. Then it can work, you can submit your application.

Salman Siddiqui: Welcome to the Investment Immigration Podcast by Uglobal, with weekly in-depth interviews with the world's leading investment immigration professionals. Welcome to another episode of the Investment Immigration Podcast, brought to you by Uglobal. I'm your host, Salman Siddiqui, and I'm speaking to you from Berlin. So today we are going to focus on Canada, and specifically we're going to talk about the business, immigration and start up visa side of things there. A lot of people are confused about the differences between the business immigration program and the startup visa program. Is it the same thing or are they different? How does one become a successful applicant under the program's different conditions there? There are a lot of vague answers there out there, especially on the internet. So we're going to clarify all of these points in this episode, and specifically to discuss and help us unpack the details in this program. I have a guest from Montreal. His name is Julien Tetrault. He's associated with the law firm JTA lawyers. Welcome to the show, Julien.

Julien Tetrault: Thank you Salman. Very nice to be here.

Salman Siddiqui: Thank you so, Julien, without further ado, let's talk about the business, immigration and startup visa options in Canada. If you could give an overview to our listeners about what these programs are.

Julien Tetrault: Sure. So a few years back, investors had wanted to get per residence in Canada by investment, would use the Quebec Immigrant Investor Program. That program was hugely popular. It was suspended in 2019. But still, people ask about it all the time. Anyway, we'll be able to talk a little bit more about it. This program has been suspended since 2019 and is still suspended as of today. So now people that want to get residence by investment in Canada don't have many choices. They have one option. It's the Start-up Visa Program, and I'll be happy to demystify more how this program can be used by people who want to get a residence in Canada.

Salman Siddiqui: Right. And, Julien, just for the benefit of our listeners, why was this program ended? Like, was it a problem with the program itself? What was the problem really in 2019?

Julien Tetrault: Historically, Quebec is the only province in Canada that can select its own economic immigrants. So when the federal government of Canada introduced the Immigrant Investor Program in 1986, Quebec copied the program. So you would have side by side the Federal Immigrant Investor Program and the Quebec Investor Program. The federals canceled their own program in 2012 and replaced it by the Start-up Visa program. So this is the sequence; Quebec maintained the Quebec Immigrant Investor program until 2019, but always had the pressure from the federal government to simply close the program. Also, a very few applicants under the Quebec Investor program were actually immigrating to Quebec. They were using this program to get residency, and then they would settle in Toronto or Vancouver and so on. But the retention rate was less than 5%. So was it meeting any objective in terms of immigration? Not at all.

Also, the interest rates were very low. So clients that could make basically a five year loan at 0%, well, not so attractive for the government. Putting this into perspective, and moreover, a very important factor is the very few applicants that were speaking French. A new government has been elected in province of Quebec, based on a program that says that we want to have immigrants that are French speaking, at least a certain level.

All these factors made it completely out of line to continue a Quebec investor program. That's why it's been suspended. And this is why, even if it were to reopen, it would be probably for about ten people a year, because you would need to be very fluent in French. And if you are very fluent in French, probably you have other options that the investor program would not be necessary for you.

Salman Siddiqui: So now, if you could explain the key differences between business immigration program and the startup visa program that you mentioned, which is now there, and it is one of the few options we have in Quebec. So if you could explain that.

Julien Tetrault: Sure. Canada is a country of immigration. We always actively look for new immigrants. Canada is interested to have young people that will come and take jobs, or older people that will come and create jobs. That's at the base. The immigrant investor program at the federal level was cancelled and replaced by a startup visa program, because the idea is that Canada wants to grow its ecosystem of startup companies. So we're talking about technology companies that can be related to anything, whether artificial intelligence, green technologies, robotics, and so on and so on. Of course, the success level of a startup is quite low.

It's very high risk investment. Typically, if you have 15% chance of economic success with a startup, it's good. So to give an incentive for startups to come and relocate in Canada, the federal government in Canada set up this program by saying, well, if you're willing to invest in a startup in Canada, start a new company, new technology that is innovative, that can create jobs for Canadians and that can compete on the international level, then we will give you PR regardless the success of the business. It was a five year pilot program in 2013 until 2018. Very few people applied because it was not made for the immigration industry. It was really made only for tech entrepreneurs, but who would make them aware of the existence of the program?

Julien Tetrault: In 2018, the criteria of the program change, and this is when it started to become an alternative to investors. So basically investors, as long as they take 10% equity in a startup company, they can get their residence. Basically, this program allows investors that do not necessarily want to run their own business to take a back seat in somebody else's startup company.

This program is designed at a maximum of five people can apply together. So typically you would have a founder who somebody who already has a company in his home country outside of Canada, or is a non-Canadian within Canada that has a technology company. And we can use this founder to bring him capital with foreign investors that will take 10% equity finance, the company we can get the interest from an incubator in Canada, a Canadian angel fund or a Canadian venture capital fund that are willing to support the startup.

Once you have those ingredients, then you can submit the application and benefit from straight to PR without any conditional work visa, for example, that you would have with any other program, such as the provincial nominee programs that are made for people that will come and establish their own business with certain criteria. And if they were to meet with those criteria, then it could apply for permanent residence later on. So the Start-up Visa Program basically is your only program that is straight to PR in Canada.

Salman Siddiqui: And the other business immigration programs don't have that?

Julien Tetrault: None of them. If you're talking about the other business programs in Canada, you're mostly talking about provincial nominee programs, also known as NPS. These are work permit based.

Basically you would submit your business plan to the province. If the province is interested, then you submit a complete application, what you want to do. And that will involve hiring Canadian staff. If that is accepted, provided a source of funds, etcetera, then you can come in Canada, do your business, and if you are successful then you can apply for PR.

Provincial nominee programs have lots of steps. It's typically made for people with a net worth of about one half million dollars that are willing to risk what they have and bring everything to Canada and try it. If it doesn't work, then they could be asked to leave the Canadian territory for people that have higher net worth and that do not want to risk it all because they have a pretty good source of income in their home country that they want to keep, then they are willing to make the shift only if they get straight from residence, which is why all our clients that has the financial means would go for a startup visa program, which is an excellent fit for these business people that have the financial means to support the startup industry in Canada and get PR.

Salman Siddiqui:  How can aspiring foreign entrepreneurs determine which immigration pathway is best suited for their goals? You've already explained a little bit there. The Start-up Visa Program is perhaps less riskier than the other path towards permanent residency, but if you could just explain a little bit more about how does one determine what is best?

Julien Tetrault:  The best way to determine what's best for you is to seek personal advice from an immigration advisor. Come see an immigration lawyer and look at the options with your lawyer. If you want to do by yourself, it's possible that mean you could be making wrong choices as well. There's a significant variety of programs to immigrate to any country, and Canada is no exception. It would be very difficult for me to say which one is best, depending on the entrepreneur.

Salman Siddiqui:  And let's talk a little bit more about the Start-up Visa Program and what distinguishes the Start-up Visa program from other permanent residency programs in Canada. Apart from this key difference that you mentioned about risk in capital, you could just elaborate a little bit more on that point.

Julien Tetrault: What is very different with the Start-up Visa Program is that you can apply as a group, and most of the time it's unusual to see a solo applicants. It's possible sometimes we do have founders. They have the technology. They don't want any other partners. They want to write their projects solo because they have the financial means to do it. That's fine. They can apply solo. Most of the time, the age of founders is different from traditional businesses where you have older owners of businesses. So typically younger people means most of the time less financial means.

What is different about our startup visa program is the ability that we have to make groups of investors that they will apply with the same project. Let's say that we have a founder that gets financing from four different investors. So basically you have five immigration files, but the same project in each of those five applications.

That's really a main difference, which leads professionals like us to make sure that we have much more stringent due diligence process to be able to make such groups, because one person can have an impact on the other co-investors and founders. So that's something to be mindful of. We try to make it as easy as possible for applicants by doing a lot of work that they don't see, but it's a program that is more complex than how it could be presented to applicants.

Salman Siddiqui: Say, for example, somebody wants to acquire a tech business which is already there on the ground. Can they do that under the Start-up Visa Program, or do they have to come up with a brand new project?

Julien Tetrault:  It has to be brand new. So typically what can be done is to have spin offs of something that already exists somewhere else. Let's say that you have a company in your home country outside of Canada. You want to come under the Start-up Visa Program. Then we would have to create a new Canadian entity, develop a business plan for the North American market, and then go that way. That's perfectly acceptable.

Salman Siddiqui: I want you to elaborate a little bit more on how the government in Canada sees innovation. So, I mean, it's such a broad and vague term, but how does it assess that this project is innovative enough? Not all are tech. Any program with a tech component can be considered as innovation, right? Like say for example, if somebody pitches a social media marketing project, would that be acceptable?

Julien Tetrault: [00:12:02] The program was designed in collaboration between the federal government of Canada and the regulatory bodies of angel funds and VCs in Canada. When you submit an application under this program, you are subject as an applicant. You're subject to have, we call it peer review. Obviously, when you submit the application, it's because you already have a letter of support from an incubator, an angel fund, or a Canadian VC. One of the three supports your project. If the reviewing officer thinks that it might not be innovative enough, they can ask the applicants for more information, more details, and they can also call for a peer review.

The Canadian government has provided a certain budget for a certain number of peer reviews per year. If the startup project that you submitted is it innovative enough, it could go to the peer review and then it could have your project stall there for a certain number of years before you can be assessed by a panel of industry leaders. Basically, what would happen is that the applicants and the organization would be called to defend their project and its innovative side.

And then on the same call, there would be other people from the industry challenging basically competitors of the organization that supported the project that will say, I don't think it's innovative because this, that, etcetera. And at the end of the day, if the project is not innovative enough, according to the assessment that was made that day, then the application would be refused and nobody would get the residence.

If you go as far as needing to go under a peer review, then it could mean that your application could be stalling for several years before you get a decision. It's relatively easy to be able to submit an application under the Start-up Visa program. It's not that easy to get your visas, and this is one of the main problems. We do see some people basically buying a shelf project that is not a real startup, and being able to submit the application.

The problem is it might take them five to six years before they get a refusal on their application. I always suggest my clients, especially that now there is a fast track program for people that are willing to make more significant investment. They can have their final decision within a year and a half. Something like this, by investing in a real startup, and it's much easier for them to secure their family's future.

Salman Siddiqui: And Julien, if you could also give us examples of some unsuccessful applicants, you mentioned where they were assessed that the project was not innovative enough. What are the examples of these kind of clients?

Julien Tetrault:  When you submit an application to Immigration Canada, it's confidential. If you are even refused, it's confidential. However, if you want to challenge this decision, you have to go to court and then it becomes public. So it's possible to have access to these public files that were refused and where it was maintained in court.

I would say that there are various reasons why people are refused. You would have the Start-up Visa Program which allows people to come on a work permit and wait for their PR from within Canada. So there's been some people that applied and misused their work permit. They got refused. They lost in federal court. You know, they lost everything. They wasted their time. And now they have a record in Canada for their actions.

But at the end of the day, what's most important is that people make general investments in genuine startups. They are just too many options of trying to cheat the system, which may work, but it's high risk and strongly advised against. It's a little bit like in the beginning of Eb-5, where you had these projects that were very lame and where clients lost a fortune. I'm afraid we might be seeing something similar in the startup program. We had some founders also that cheated their investors. A big part of our job as a migration professional is making sure we invest in legitimate people in legitimate startups.

Salman Siddiqui:  Let's also talk a little bit more about the Start-up Visa Program, specifically about the investment requirements under the program, and how do they compare to other business immigration programs. If you could talk about the investment requirements.

Julien Tetrault:  It might seem a bit odd. There is no financial requirement from applicants. There's simply none whatsoever. The program has three streams, including he incubator stream that is chosen by about 80% of applicants. There is no financial requirement from anyone as long as the technology is approved and that you have a letter of support from a Canadian incubator, then it can work. You can submit your application if you get the support from a Canadian Angel fund.

The Canadian Angel funds themselves have to invest 75,000 CAD. There is no requirement from any of the investors, only from the Angel fund. Obviously, if the Angel fund is going to put 75,000 CAD, rest assured that they will ask investors also to contribute capital for VC. We're talking about the Canadian VC will have to commit to 200,000 CAD. So obviously it will be also a higher investment required from investors.

Coming back to your question, there's no specific requirements in terms of investment, but there is a fast track for people that get the support from Angel fund and VCs. For people that are willing to commit more capital, they will benefit from the fast track and be able to get there probably in about a year and a half, as opposed to people that go with the incubator stream that may have to wait. At the moment, it's already more than three years, but since the fast track was announced this summer, probably means that the people going with the incubator stream may have to wait for five years to get their decision.

Salman Siddiqui: But then who usually goes for the incubator? Programs mean I'm imagining fresh graduates from universities would find this option very appealing, you know, because it gives them a path and maybe to fulfill their dream of owning their own company and running a successful business.

Julien Tetrault:  Young entrepreneurs, they like the idea of getting financing. So they would rather go with one of the fast track programs, typically with the incubator chosen by 80% of applicants. It's just because it's cheaper. So people that only think, okay, what's the cheapest price I can pay to do the startup visa program, go with the incubator stream. It's going to be cheap, it's going to be long, and it's going to be what it's going to be at the end. So that's one of the key thing to keep in mind when opting for the stream.

And again, the biggest challenge we face when we speak to clients, if they compare price, they often compare apples and oranges because they compare the incubator with the other streams. Simply, there is no comparison to be done there.

Salman Siddiqui: If you could give us some examples of successful clients, how they were successful, if you could just share some examples that you have.

Julien Tetrault: Let's keep in mind that I'm an immigration professional. I am not a financial advisor. I do not make recommendations on what is a good investment or not. My recommendation is, is it an investment that will lead you to PR? For me, that's the most important part.

So typically when we have investors coming up to us and say, okay, I want to get a residence, I'm willing to make investment. So I'll be working and collaboration with, for example, a Canadian angel fund that will be selecting a qualified project, assessing that they meet with the conditions that will have my investors choose within certain number of startups that are looking for capital. And we will do matchmaking. We would introduce directly our investor clients to the founders. They would speak directly, see if there's a good match. That's how we make groups. Basically, we come up with clients that are involved to a certain level at the very beginning stage of this new Canadian startup that we're creating. They keep running their business in their home country; not a problem. A lot of it is done on zoom like we're doing today, and it doesn't take too much of their time. And at the end of the day, it's just a question of dedicating a little bit of time into a project that can be beneficial for Canadians and beneficial to the client, himself and his family.

Salman Siddiqui: And speaking of the language requirements, so could you explain the role of language proficiency specifically, you know, English, French in the selection of this immigration pathway, how much you're supposed to know?

Julien Tetrault: Technically speaking, it's CLB 5. What does CLB 5means? It's basic communication skills in English or French. For those who are familiar with the IELTS system. Basically, it's five in every category except reading where four is enough, it's quite low. And it's the lowest in terms of Canadian immigration. Other categories would have higher standards.

Salman Siddiqui: What kind of requirements do they have to meet over the years to make sure that the permanent residency status will be maintained?

Julien Tetrault:  This program leads straight to PR, and after the PR is obtained, then the money of the startup is released. So the capital is released after getting the PR. Regardless of the success of that startup, the client and his family will keep the PR.

Worst case, let's take an extreme case; you do a startup visa, you invest in a real startup, you get your PR. After that, the company goes belly up. The client can keep the PR for himself and his family and have access to citizenship after three years.

I'll go even further if the company does anything illegal, since the client has only 10% share, and as long as the client is not involved himself, since he does not have effective control of the company, it's protected by the fact that his investment is an incorporated company, so he will not be subject to lawsuits, et-cetera. So his involvement is really limited to his financial commitment.

Salman Siddiqui: Is there any support for genuine startup founders who want to make a big mark there?

Julien Tetrault: Absolutely, we're not talking about the government itself, but you have different non-profit organizations or for profit organization that are held to support startups. We have great startups that came out of Canada. The ecosystem is already there, and typically under the Start-up Visa program, the founder should be benefiting from a hot desk once he comes to Canada to be in an ecosystem with other founders that can challenge him and help him grow the business.

There has been success already with a company that is almost an almost qualify as a unicorn and somebody who came under the startup visa program. So it is possible. It's unlikely that there will be so many unicorns. But you know, it's already a program that meets all the objectives of the federal government. There's strong government backing for this program. In November last year, the target for the number of visas for this category has been multiplied by three. That was in November. This summer, the immigration minister announced a fast track and also have longer work permits for those who have the option of because it's optional for everyone to have a work permit and wait from within Canada to get the PR. So there's a lot of investment from the government side to grow this program because they love it so much.

Salman Siddiqui: We're coming close to the end of our episode. But before I let you go, I want to touch on another tricky topic. There's a lot of fear online about, especially from the Indian applicant side, about what's going to happen with the visa status now. And for our listeners, I just want to mention this is in the background of the tensions that recently flared up between the two countries, Canada and India, following the recent political killing of a Sikh separatist there in Canada.

So for Indian applicants, there's a fear that they might face a lot of delays and difficulties in obtaining visas to Canada. I want to ask you, is that true, or have you observed something? Are there clients calling up and saying, hey, you know what will happen to my startup visa application? Or is that just like nothing there in the moment and there's nothing to worry about?

Julien Tetrault: This issue has nothing to do with the Start-up Visa or business immigration to Canada, but it does have issues on temporary stays. Yes, there is an impact at the moment. My experience when there is an issue between Canada and any other country is that usually it doesn't last for years. It's temporary, it's there. There is zero impact on any application. If they want to come sooner on a work visa, they could also do that. I don't think there should be any delay in their application because of the things. Delays are experienced mostly for tourist visas at the moment and student visas from what we hear.

Salman Siddiqui:  We are coming right to the end of our show. But before I let you go, I'll also give you an opportunity to make your pitch for your Start-up Visa Program. You have 30 seconds, Julien. So if you want to just talk more and maybe cover some things that you know you felt was a bit missed or you want to reinforce, so go ahead .

Julien Tetrault: High net worth individuals that want to get a residence in Canada by investment; there's only one way is the startup visa program that would lead straight to PR. I feel that the attention to the price should not be the focus. The focus should be who my service provider is and what kind of due diligence has been done, and what's the likelihood of me obtaining PR? The idea is not to submit an application. Again, the idea is to get PR.

It's never too late to start, but it's always a good time. Typically these programs tend to be longer and more expensive. Don't delay. If you have any questions, meet with a professional, whether me or another one, but it is important to not postpone it. People typically take care of their family matters and immediate business matters and leave immigration to another day. And every single time when they start this process. And all along this process, they keep telling me, I wish I had done this sooner.

Salman Siddiqui: Right? And on that note, thank you so much, Julien, for being a part of the show. It was so informative to hear from you about exactly what's happening in Canada right now, in terms of processing times, in terms of the different options that are there to cut the delays in the processing times. Also, the different business immigration options that are there and of course, the startup visa program. So really happy that you are part of this conversation.

Julien Tetrault: Thank you Salman, it was a pleasure.

Salman Siddiqui: Thank you. And in the end, I'm just going to do a shout out to our listeners that please stay tuned. We're going to have more guests from more professionals from around the world. We're going to talk about more programs, so please stay tuned to our show. Thank you so much. You've been listening to the Investment Immigration Podcast by Uglobal. Join us again soon for more in depth conversations exploring investment immigration opportunities from around the world.

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