Canada Introduces Flexible Open Work Permits for Start-Up Visa Applicants

In a strategic move to foster innovation and entrepreneurship, Canada has announced new provisions to its Start-Up Visa (SUV) program, introducing three-year open work permits for candidates awaiting permanent residency (PR). The changes, which took effect on October 3, 2024, mark a significant departure from the previous policy that restricted entrepreneurs to closed work permits, allowing them to work solely on their SUV-related ventures in Canada.

Flexibility for Entrepreneurs

Under the new rules, entrepreneurs applying through the Start-Up Visa program will be eligible for an open work permit, granting them the freedom to work for almost any employer in Canada while simultaneously building their start-up business. This development by Canada addresses a key shortcoming of the previous policy, which left many SUV candidates in a difficult position if their business faced setbacks or if they wanted to explore other opportunities.

Christopher Lennon, President & General Counsel at Empowered Startups, expressed his support for the change, noting that it reflects the program’s evolution. “When the government launched the SUV program in 2013, the expectation was that PR applications would be processed within six months,” Lennon explained. Based on that timeframe, a one-year closed work permit was seen as sufficient for entrepreneurs to launch their business in Canada while waiting for their PR.

However, as PR processing times increased, with many applications now taking 24 months or more, the limitations of the closed work permit became apparent. “The closed work permit policy created unintended consequences,” Lennon said. “Entrepreneurs were restricted to working solely on their start-up, and if they explored other opportunities or invested in other businesses, they could inadvertently find themselves in violation of their work permit conditions.”

The new open work permit eliminates this issue, offering greater flexibility and allowing entrepreneurs to engage in multiple ventures without jeopardizing their immigration status. This change is widely seen as a necessary adjustment, especially for entrepreneurs who thrive on finding and pursuing new business opportunities.

Challenges in the New Process

Despite the positive reception, the new work permit framework comes with its own challenges. Melissa Godmer, Founder of Godmer Immigration Consultant, pointed out a potential bottleneck in the process: the requirement to obtain an Acknowledgment of Receipt (AOR) from the government before applying for the open work permit.

“This step can introduce significant delays,” Godmer explained. “Obtaining an AOR can take anywhere from several months to over a year, which could discourage new applicants and frustrate those who are eager to get their businesses off the ground.”

The delay in receiving an AOR means that many SUV entrepreneurs may need to start their businesses from abroad while waiting for the opportunity to move to Canada. Lennon echoed this concern, noting that it often takes about 16 months to receive an AOR, which could overlap with the time it takes to issue the first work permit.

“Because PR processing times are improving, there is a real possibility that entrepreneurs may receive their three-year open work permit around the same time they are asked to provide an update on their business progress as part of the PR process,” Lennon said. He emphasized that making significant progress in launching the business before receiving the work permit is now “critically important” for applicants.

A Complex Balancing Act by Canada

While the introduction of the open work permit adds flexibility to the Start-Up Visa program, experts caution that the additional steps involved may complicate the process. Godmer explained that the need to balance the program’s accessibility with regulatory and operational challenges is key. “This policy shift reflects a complex balancing act,” she said.

“On the one hand, the open work permit makes the SUV program more attractive by giving entrepreneurs more freedom. On the other hand, the timeline for obtaining an AOR could limit the number of applicants who can take full advantage of the program.”

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