David Crawford: Individuals can plan their lives, can go into business and aim to do what they want to do in business, knowing that in the background, a process is underway for them to obtain permanent resident status. As I said, three years is beyond what anybody would want, including officials.

Salman Siddiqui: Welcome to the Investment Immigration Podcast by Uglobal.com, 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 U. Global. I'm your host, Salman Siddiqui. Today we are going to focus on Canada. When we talk about Canada, there's a lot of talk about the startup visa and how it's one of the only ways, supposedly for entrepreneurs and investors to get into Canada through this route. But it's not the only way, and we are going to talk about this in our episode today. We're also going to focus about there's a lot of discussion about the delays in the processing times. I see a lot of complaints these days, especially about the startup visa, that there are a lot of problems there, but we're going to find out whether it's for all those three streams that come under the startup visa. We all know that Canada offers a startup visa, which has the incubator stream, it has the Angel stream, it has a venture capital stream. But are the delays happening in all those streams? And what can people do to expedite their process? So to help us explain and understand what's going in Canada's investment immigration scene, I have a very special guest. His name is David Crawford. He's a partner at Fragomen Worldwide. Welcome to the show, David.

David Crawford: Salman, it's great to be with you, and it's great to be presenting to all those people interested in this area of work.

Salman Siddiqui: Thank you so much, David. So let's immediately talk about first about the startup visa program and the current processing times there. So I recently saw this report where it was said that sometimes it can take up to 36 months. So could you explain what's going on there in terms of processing times for startup visa to begin with?

David Crawford: Sure. And it's a very legitimate concern. If I were a candidate, I'd be concerned about it. I think there are a couple of reasons for the delay, because after all, when the startup visa was introduced, the processing times were more on the six-month mark, which is what you would hope for.

And then the combination of Covid and other pressures on government as they responded to emergencies around the world meant that the resources were stretched beyond what they could cope with, not only for the startup visa, but for other categories. And over time, the processing times have generally improved. That's not been the case in the recent past with startup visa, but I'm I remain optimistic that the processing times will come down a great way, much closer to what we would want to see six month mark and so on. But I would add that in the case of the startup visa, it is possible to get a work permit permitting entry to the country within 1 or 2 months of application. And that means that individuals can plan their lives, can go into business, and aim to do what they want to do in business, knowing that in the background, a process is underway for them to obtain permanent resident status.

As I said, three years roughly is beyond what anybody would want, including officials. I know that, and I'm optimistic that the times will improve.

Salman Siddiqui: And this is what I'm seeing online, is that a lot of people are saying that why there is a three year long wait, for example. And then the question that comes next after that is that is it worth the wait? Should one wait three years for that processing time to complete? And what would you say to that?

David Crawford: There's no one answer, because I tend to approach every case and every situation because it's unique to itself. A conversation with a person thinking about Canada as an option is well as its starting point is, what do you want to do with your life? What do you want to do in business? And then we talk about categories, and it might be the start of visa is the best for the individuals, or it might be the intercompany transfer set up, or it might be an entrepreneurial program through one of the provinces. And the situation will depend very much upon the individual's own circumstance. Just in the last few days, I've been talking to two individuals, and it's unclear yet which pathway they'll take. The Start-up visa may be preferable for one person picked start up arrangement might be better for another, and that will be influenced by a number of things. In the case of the Start-up, it's processing time, of course, is a relevant consideration.

In addition to that, though, there is the support and guidance provided by one of those three types of collaborators, whether it's an incubator, angel investor or a venture capitalist who can help people adjust and succeed in this different economy for them, and allow them to have an infrastructure that will support them, knowing that they and members of their family will become permanent residents. It's a long way of saying that the delays are unfortunate, but it's not the only opportunity and taken in the whole, what's best for the individuals. And that might be the one or it might be another way to get to Canada.

Salman Siddiqui: I also would like to know from you is what kind of advice you give to your clients. You already mentioned that they can still enter the country on a temporary permit, but what is an applicant supposed to do during that long processing period? Can they visit for a longer period of time during that three year wait? What do you advise your client to do in that particular time that's relevant?

David Crawford: Of course they'll have a work permit, so they and members of their family can enter and commence their lives. They can start going into business, make sure that they're in the right location. They'll have support to develop the business. So everything pretty much would proceed as they would want to. As I said earlier, the starting point is what do you want to do in life? And they can establish their lives without delay. Kids can enter school, spouses and partners can work wherever they'd like to on an open work permit. There's a concession for the work permit holders not only to work in the startup, but to do other things as well. So there's enormous flexibility.

Salman Siddiqui: Now, I want to also know from you that many foreign investors are eyeing Canada for its Start-up Visa program. Can you explain the key features that make this particular program attractive for international entrepreneurs and innovators, despite the processing times that we hear about?

David Crawford: Yeah, yeah, the program is enormously flexible, and I think that there are the roles of these three entities that we, you and I have referenced. The angel investors, venture capitalists and incubators means that there are collaborators with the entrepreneur to succeed, and that will include a commercial relationship with these entities so that they've got skin in the game, if you like. And it means that and there are no particular thresholds for the investor to think about in most other programs around the world, there's a minimum amount of investment, there's a minimum amount set aside. None of that exists. Part of the reason for that is, in effect, the government is saying to these bodies, if you endorse the entrepreneur and their business plan, you take responsibility and we will accept for the most part, we will accept your advice and approve the applications.

So it becomes very much a business arrangement, and people are focused as much on their business as meeting the criteria for a particular visa. So that flexibility, I think, is very attractive for those people who have a genuine commitment to do something in business that will benefit this economy and by benefit. Just for those who might be wondering, will the business be recruiting individuals? Will it be exporting goods or services?

Again, there are no particular rules about how many people to employ or what thresholds to of exports. None of those exist. Again, enormous flexibility compared to some of the similar programs elsewhere in the world.

Salman Siddiqui: But in terms of funding, let's talk about that. What are the challenges in Canada's ecosystem, particularly in terms of funding? What do you think are the main obstacles that prevent startups in Canada from accessing the necessary funding? And how might this affect the attractiveness of the startup visa program for foreign entrepreneurs?

David Crawford: It's a bigger question than just the startup visa. Of course, it's the question is how much capital is made available to encourage entrepreneurs, whether they're homegrown or not. And you're right, there are countries that have much stronger track record when it comes to funds available. There has been the resuscitation of a federal program for making funds available to entrepreneurs, which the Start-up program can benefit from.

That program was reintroduced after Covid, and early indications are that it's getting considerable support. In addition to there are some tax breaks I understand that employers can benefit from. But I would say a couple of things. First of all, if I can go back to the role of the angel investors and venture capitalists and incubators, they know the ropes. And one, one of the things I would worry about if I was an immigrant entrepreneur going into any country, is how do I get used to the employment rules and the tax rules and the way to do business and the business culture and all of those sorts of things. And here you start from the very beginning with colleagues and collaborators, and to my mind, that would give a great deal of comfort and peace of mind that I can focus on what I do know to create the opportunity.

And I've got ready access to the guidance and advice. In addition to that, I should add that while we do think about programs in terms of central government support, we've been working with municipalities in Canada who have their own localized programs, also aimed to attract and support entrepreneurs as they move into their areas. And of course, it won't just be the startup visa people who will be supported any entrepreneurs, but it means that there is an, if you like, a localized ecosystem, a local infrastructure, if you like to make things work. Ultimately, everybody wants this to succeed. And so, contrary to a view one might have about, well, will I get the visa or not get the visa? Everybody's pulling for the people going into this program. Everybody wants it to work. And that's a healthy thing.

Salman Siddiqui: Right. And you've already mentioned that there is a system in place to help entrepreneurs. But speaking from your experience with talking to your clients, how do they actually go about this in terms of attracting funding? You could share a little bit more on that.

David Crawford: I think it goes down to a practice that any business would aim to do anywhere in the world, and that's the due diligence we think about an immigration program is I think I want to go and live in Canada. I think I'll put my therefore, I'll put my application in and I'll see what happens. This is different. This is about going into business. And I don't care whether you're wanting to cross a border, to go into business or doing your very own home.

If you don't do the due diligence, if you don't have a business plan that's serious, probably not going to succeed. It would be a mistake, I think, to think wholly differently about the process we're talking about with a startup visa, there are resources available to help. Yes, there are some different issues, but there are resources available to facilitate the due diligence needed to get a plan in place. And if you've got the right people around you and you're confident in the plan and your questions have been probing and they've been answered, you've got an opportunity to make a decision about the rest of your life and your family's future. One of the things about this category that's important in my mind to understand is in a way you self-select.

David Crawford: Why would you go forward with something that looks like it's a bit risky or dubious? Now, that may not be the case if in another circumstance, but in this situation, why would you go to all of that effort if the immigration part looked like it was risky business? That makes no sense. More importantly, why would you go forward if you thought the business was risky or not viable? So as a consequence, just conceptually, the chances of getting the visa is very high. If all of the T's have been crossed and the i's have been dotted, it's not the outcome, the visa that's in doubt and that gives peace of mind because even though you've got a longer processing time, unlike just about every other category, you just have to do what you're doing in business. Your status will not be withdrawn because you haven't employed three people, or because you haven't got a revenue number within 2 or 3 years. None of those considerations are relevant, none of them. By being accepted into the program, the door has been opened. You can commence a life in Canada, which will include in two course the granting of permanent resident status and if you want to continue on that path, become a Canadian citizen.

Salman Siddiqui: And are there any proposed solutions or changes to make the startup visa program of Canada more competitive and supportive? Do you think there is a need for that?

David Crawford: I'm an immigration lawyer. It would be hard pressed for me to say that there can't be policy improvements. I mean, that's taken as read. I have to say, though, that the government, any government, wants to develop a program that they consider meets their objectives and that is chugging along. And the standards of. Itself. These are pretty high. They want successful entrepreneurs to succeed in the country. And not everybody by definition, not everybody can be a successful entrepreneur.

Officials have made some changes already. There will be improving the processing times, giving access to open work permits for candidates who come into the country so they can do other things. Is it an unfair comparison with America? Well, it's so big and the startup fees are, even though it's been going since, I think 2013 is still immature. And not only the visa itself, but also the ecosystem. We've spoken about three types of businesses that can help, and I think over time, the networks that they've been developing over a number of years have increased.

So the level of support and the level of comfort for candidates will improve. Does that mean it will be like America? I don't think so. I think it'll be a Canadian version of what we can do. I think what I would like to see is this nurturing of the entrepreneurial spirit, because in an aging population and Canada has got an aging population which very much relies upon immigration as one of the important elements of increasing in the labor market. The entrepreneurs are the engine of growth for everybody else in many respects, and we need that entrepreneurial spirit for the future.

Salman Siddiqui: You also mentioned that there have been changes and some adjustments to the immigration policy. So if you could elaborate a little bit more on the specific changes that have been recently introduced, especially to enhance the startup visa program, we talked about the processing times are the main focus now, but are there anything else or any changes expected?

David Crawford: I don't know that there would be major changes anticipated for the startup visa. What I would say is a general comment that I think it's important is that there has been a level of facilitation and pragmatism at a policy level, to try and get things happening on unrelated topics to the startup visa, for example, there is the recognized employer pilot has commenced so that we can try and facilitate the movement of people on work permits, employer sponsored work permits into Canada. That that pilot commenced only September this year. Certainly there have been efforts to streamline the startup visa applications themselves. There's been an implementation of occupation based express entry draws. That's the doorway to permanent residence status to try and identify particular occupation groups where there is a demand in the local labour market. You might have heard that there's been the issuance of open work permits to people who were concerned about their H-1b status in the United States of America. I don't know if it's controversial, but certainly took a lot of people by surprise that you're effectively saying, look, if you can't stay in America, you can try and come here, we'll take you in and help you out.

And even I think it was in 2021, the government reduced the ranking score for express entry to a very low number, very specifically to increase the number of people going achieve permanent resident status, to meet numbers and concessions to students, people on study work permits so they don't have to limit the time they're working per week to 20 hours. They can work full time even though they're in an educational institution. All of these things, if you step back, indicate the government is trying to make it easier. Give options for individuals to stay temporarily and work, and possibly find a pathway through a permanent resident status. And that is an environment where we've got the government regulatory system and the rhetoric from politicians saying immigration is a good thing.

Salman Siddiqui: I'm glad you mentioned the Recognized Employer pilot program, which was recently announced. So if you could elaborate a little bit more on the eligibility criteria for Canadian employers to participate in this program and how does it differ, for example, from the Express Entry program?

David Crawford: It's really for employers to sponsor individuals temporarily into Canada. So these individuals will hold work permits. And the first phase of that relates primarily to agricultural workers. It will be expanded later. And the employers themselves must have applied for and obtained labour market impact assessments. So at least three in the last few years be wanting to employ people in certain occupations. The whole idea is, if you can think of it as getting a form of accreditation or recognition, saying, here is an employer that has used the system, they've been compliant, and we're going to reduce the paperwork by saying, we've looked at you and we've accredited you.

And so when the individuals apply, we'll cut out some of the recruitment or other requirements just to facilitate movement into the country. So it's that accreditation that is the key element of this. And then to provide a more facilitative and streamlined approach when it comes time for individuals to apply to enter the country, it's not a wholly new concept. A number of other countries have something similar to this, but it's another indicator that the government is trying to find ways where it can be more facilitative for those employers who are responsible and good, well, well behaved, if you like.

Salman Siddiqui: I want to talk about also the Venture Capital Catalyst Initiative. What is that all about? What are its primary objectives? If you could explain that.

David Crawford: The concept, I think that that project for Venture Capital Investment initiative goes back to 2017, I think hit some bumps through the Covid period, unsurprisingly, and it's been reintroduced, and it's to work with entrepreneurs who need funding to. Again, going to your point about increasing the pool not only of resources but also expertise and the generally improves the ecosystem within Canada. It's not been going for very long in the recent past, but it's expanding and employers need to put in an expression of interest. And there are phased processes, and all of this information is readily available online.

There are expressions of interest that are placed online, and they are then assessed. And individuals can be rewarded, if you like, with injections of capital on the understanding that they then have reporting and other obligations as you would expect, or for getting the grants. But it's really a program to try and put oil in the machine, if you like, try and help business out. I think it goes back to that broader point. I was saying that businesses, entrepreneurs are needed in the economy for the future health of the economy, specifically in the society generally.

Salman Siddiqui: Could you share some successful case studies of startups that have thrived under Canada's startup Visa program? What kind of advice you can give to people who are listening?

David Crawford: It's really like doing business anywhere. If you have to cross a border, that's an additional element. But the success I've seen is connecting within the local market and being able to expand from there. One business I was dealing with had educational software for application, particularly at university level, and that meant building up the network through the tertiary education sector and developing the market. So many of the individuals involved with this stuff are doing cutting edge stuff. There's another I can't go into the details because I'd give too much away. But technology, it's being introduced by an entrepreneur into the automotive industry, and that's creating a competitive element in this area of technical research that has got the government extraordinarily excited. So with that, I suppose there's potential. It hasn't happened yet, but the potential for additional government funding.

On your point about getting support within the economy and also has to be seen if we see startup visa in itself by itself, that's a sort of a small part of a much broader area of tech development that's been taking place in parts of Canada, in Vancouver and BC, generally in the area near Toronto. There's also been some exciting developments in Montreal in different areas of tech, and there's been a fair bit of investment from the United States in some of these areas as well. So the expansion of the tech community, that ecosystem you referenced has been extraordinarily over the last six years, notwithstanding the pandemic.

David Crawford: So it's understanding that these individuals we're talking to who have these ideas know that when they come in, it's not just about my business, but it's also understanding how can it plug in with, for example, can I get suitably qualified people who can help me succeed? And the answer to that is yes, because we have been growing this sector within the country, I would hesitate to have too narrow a focus on just the individual entrepreneur and what their ideas. And is there support from government?

I think that the research element at universities, by the way, has been extraordinary, but also more broadly in the tech sector. And if there's anything that's, um, Canada is good at the moment, it's trying to attract immigrants through all sorts of streams. And that means that there is a very strong support base for the type of skill sets that entrepreneurs need. I mentioned a few moments ago that Express Entry has targeted increasingly certain occupation groups to facilitate the grant of permanent resident status. That's precisely part of that broader plan to build the tech sector. So the startups themselves are part of that, but they're not the only part of it. They're beneficiaries, if you like, of a broader effort to make this work.

Salman Siddiqui: I did hear from somebody that one of the biggest mistakes that people make under the program is that they apply for the incubator stream under the visa program, thinking that this might be a shortcut, and then they do not fulfill the requirements. And their business plan is not to sound especially some university students. Are you also seeing that, and do you advise people to perhaps not go for what seems like the easier stream under the program?

David Crawford: Yeah, I agree with that. That's why the beginning of the there's a conversation about what do you want to do, what do you want to achieve, and then worry about the particular category a little bit later. If the focus is purely upon gaining permanent resident status, that's fine, as long as you understand the obligations and commitments and the risks that go with doing that. So yes, I think that in anything in life, doing what seems to be the easiest may not necessarily be the smartest. Having said that, the people we tend to talk to are very experienced. They know what they're doing. And the best decision making in business is based on the facts, not on what you want, but what you feel realistically is achievable. And if you start with that and you do your due diligence we spoke about earlier, then I think things generally will go very well.

Salman Siddiqui: Now let's talk about a little bit about the business ownership side of things. So one important aspect for entrepreneurs considering Canada's startup visa program is understanding the rules to business ownership. Could you please, for the benefit of our listeners, clarify the ownership requirements and restrictions that applicants should be aware of when applying for this program?

David Crawford: Sure, the owner or owners, because there can be up to five have to, along with their collaborator, the incubator or whoever else they must own. More than 50% hold more than 50% equity in the business. If you've got five, then five people together minimum of 10%. But of course, if there are only two of you, you've probably got to hold at least 25% or 20%, but collectively more than 50% of the business, if you think about it, that's not pretty tough. If you compare it with provincial program, the entrepreneurial programs, the provinces run, then you've got to own the whole business. It's a very different environment.

I go back to my earlier comments that there's enormous flexibility within the program about that level of stuff. It's not prescribed amount of money, it's just a percentage. And by the way, if I was running a. And it was going to go very well. I'd certainly want to hold as much equity as possible for those angel investors, incubators and the venture capitalists. They'll want the applicants holding equity. They want them to have skin in the game.

Salman Siddiqui: That's true. That's true. If you could elaborate on the key differences between business immigration startup visa program in Canada, how do these two paths cater to foreign entrepreneurs differently, and what are the other options? They're on the table.

David Crawford: It's a good question. If I had to say anything about the immigration program, is sometimes it just a bit too complicated, too many categories. Quite a number of our clients have business in another country, which won't surprise you. And rather than looking at the start up fees that they might say, well, why don't I establish a branch or subsidiary of my existing foreign based business in Canada? And I'll go into Canada and I'll run that business and try and develop it, establish a life there, and find a pathway through to permanent resident status and depending upon the circumstance, depending upon the preferences, that's certainly a viable opportunity for a number of people. I've mentioned that many of the provinces have their own programs for entrepreneurs, and they'll be very specific about.

They vary enormously on prescribed investments, but they'll prescribe the amount of investment minimums for a particular area, a minimum amount of capital held for establishing a life. And they'll apply rules about how you step from a temporary status to a permanent status by employing so many people and reaching thresholds after a couple of years. And just to make it clear for those not so familiar with it, the start up visa is run by the federal government, the central government, the setting up of that branch or subsidiary in Canada under an intra company transfer arrangement is also run by the federal government. These provincial programs are designed by each of the provinces to meet their own needs.

David Crawford: And so they'll be different, very different one from another. And so one then has to go through those categories, apply, get approved by the province. The federal government will check health and character just because that's their part of the process. And then people are approved to come temporarily into Canada. And then if they succeed in business to qualify to stay permanently. So there are different options for entrepreneurs. Each of them have their drawbacks and each of them have their attractions and qualities. The startup visa, though, is the only one that offers the pathway through to permanent resident status with from the beginning if you like. And then before I close, I should add that you never know.

Some people might qualify to permanent resident status not through their business, but through their employment history, through express entry, and they just want to enter as a permanent resident and then commence a business. Or maybe they have married a Canadian or they're in a long term relationship with a Canadian, and they come on the basis of a spousal sponsorship. They may very well be entrepreneurs. In other words, I go back to my point that there's a conversation with individuals about their circumstances and plans, and our obligation is to find what's the most logical, straightforward way to qualify to come to Canada. And if they're okay with that, then the formal plan.

Salman Siddiqui: We're coming close to the end of our show. But before I let you go, I want to also talk about job creation is a factor or not under these different kind of categories we have. So we could talk a little bit about the concept of job creation, which is a big factor for immigrant entrepreneurs. How does the job creation aspect differ from the business, immigration and the startup visa? We already know that under the startup visa, that's not really a main thing, but is it a main thing in the other options that you mentioned? If you could just talk a little bit about that?

David Crawford: Yes. The provincial run programs that I mentioned do go into detail one from another. The rules differ, but at least be a couple of full time employee equivalent positions anticipated over the 2 to 3 years after the individual enters Canada. In terms of the federal program for intra company transfers, there's no specific rules about that. It is anticipated that if a business is going to open and run and succeed, it would create employment opportunities that will flow. It's not so prescriptive, but of course, as you said, the startup visa is much more flexible.

And to explain that it's really the venture capitalists, the incubators and so on. They're the ones audited by government, say. So how does it go? So there's a shared if you like, responsibility and risk. So that's a key qualification when it comes to startup visa.

Salman Siddiqui: I think in the end I would give you an opportunity to make your pitch for Canada's program for foreign investors and immigrant startup founders. What would you say to them? Please go ahead and explain in 30 seconds.

David Crawford: My thought is that Canada is a country that respects the contribution of immigration. In a general sense. It's part of the foundation of this country where it's come from and where it is going. It does need immigrants to populate for the future, to provide the ability to grow and to meet society's needs.

When it comes to an entrepreneur, I've tried to make the point that focusing on the visa category and the outcome, while important, maybe shouldn't be the starting point. If you're thinking Canada is the right country for me, that it's the right country for my family, that I can see, that my kids can go to school, that I can get good health care, the infrastructure, it runs well.

What have been my circumstances, what in my background will make me happy to qualify there? Is my business experience relevant? Are my business plans relevant? And if those things come together, then talk about the rules that might apply and the best way to enter the country. Having a starting point of a visa in a sense, is, in my view, not the right thing to do. It's thinking, if this is the right country for you, what do you want to do and how do we make this happen? And that's a good thing to talk about.

Salman Siddiqui: Thank you so much, David, for taking out the time to be part of our show. I really appreciate all the points that you explained and all the recent changes that are happening under the program, and you explained us a lot of things, so I really appreciate you taking the time.

David Crawford: It's been really good to talk to you.

Salman Siddiqui: And in the end, I'll just give a shout out to our listeners that please stay tuned to our podcast. We'll be bringing you more guests from around the world to talk about more investment, immigration opportunities, and how you can live in different parts of the world through that route. So stay tuned and thank you.

Salman Siddiqui: You've been listening to the Investment Immigration podcast by Uglobal.com. Join us again soon for more in-depth conversations exploring investment immigration opportunities from around the world.

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