Source: Kwan v. Canada (Citizenship and Immigration), 2019 FC 92.
IRCC describes the objective of Start-Up Visa (SUV) as “to attract innovative foreign entrepreneurs who have the potential to launch high-growth businesses in Canada that can compete on a global scale”.
There are quite a few conditions foreign entrepreneurs need to meet to be eligible for SUV Program, and one of them is “have a qualifying business”.
What does “have a qualifying business” mean? Out of five conditions, here are three of them you (the foreign entrepreneur) need to meet when you receive your permanent residence:
- You provide active and ongoing management of this business from within Canada
- An essential part of the operations of the business happens in Canada
- This business is incorporated in Canada
Clients always ask me whether they should start to operate the business in Canada while waiting for their Start-Up Visa. The answer is absolutely “YES”.
In Kwan v. Canada’s case, here is the timeline until Kwan’s Start-Up Visa application was refused:
December 1, 2016 Commitment Certificate issued by the designated incubator
February 25, 2017 Work permit obtained for Kwan to work on her business in Canada
March 1, 2017 Kwan’s business incorporated
March 17, 2017 Kwan no longer in Canada
June 28, 2018 Start-Up Visa application refused
Following is the officer’s notes stating the reason for their refusal decision:
“On June 6, 2018, the PA made the following submissions in response to my PFL on May 15, 2018: explanation letter, emails with Empowered, WeChat logs, incorporation documents, screenshots of website, Collaborative Research Agreement, and e‑mails between UBC and Empowered. I acknowledge that the PA raised concerns with regards to Empowered Startups Ltd. being referred to as a venture capital investor in my PFL. However, I am satisfied that this terminology does not impact the clarity of my concerns conveyed to the application. The PA was made aware of the case to be met and was given the opportunity to submit all evidence that she wanted considered. Certificate of Incorporation provided indicates that the PA’s business venture was incorporated on March 1, 2017 in BC, after her arrival in Canada. PA obtained work permit #W302370595 on February 25, 2017 in order to work on her business venture in Canada. According to the chat logs provided between the PA and Chang of Empowered Startups Ltd., the PA was no longer in Canada as of at least March 17, 2017. In her letter of explanation, the PA repeatedly indicates that the discussions about the business took place over email, WeChat call, and WeChat message. Based on the information provided by the PA, I am not satisfied that the PA has been in Canada exercising her work permit to develop her business venture. I am not satisfied that the PA will provide active and ongoing management of this business from within Canada. In the PA’s letter of explanation, she indicated that Appendices A and B are solid evidence demonstrating her active business discussion and activities for her business venture. The chat logs (Appendix B) suggest that Chang of Empowered Startups Ltd. was developing the PA’s business venture and providing the PA with updates. According to the April 2, 2017 e-mail between the PA and Chang (Appendix A), it appears as though Chang created the survey questions. Furthermore, Chang built the company website as per the April 21, 2017 e-mail between the PA and Chang. Chang continued to make changes and develop the websites and informed the PA when to have her friends test the website. According to the February 20, 2018 e-mail, the PA did not hear from Chang on her venture. The PA has failed to provide sufficient evidence to satisfy me that she is actively involved in developing her business. Moreover, I note that the Collaborative Research Agreement was signed by UBC and Empowered (Appendix F). It did not include the PA or name her business venture. All e-mail correspondence provided took place between UBC and Empowered as well. I note that the PA was not CC’d on these e-mails (Appendix G). The PA’s response to my PFL was carefully considered; however, it did not satisfactorily disabuse all of my concerns. Upon careful consideration of all information on file, I am not satisfied on the balance of probabilities that the PA participated in the agreement or arrangement in respect of the commitment primarily for the purpose of engaging in the business activity for which the commitment was intended. Rather I am satisfied that the PA participated in the agreement and arrangement in respect of the commitment primarily for the purpose of acquiring a status or privilege under the Act, contrary to MI 2(5). Therefore, I am not satisfied that the PA is a member of the start-up business class. Application refused on this date.”
The Federal Court Judge dismissed Kwan’s application to set aside the visa officer’s decision by stating “The stated basis for the decision (of the officer) was Ms. Kwan’s lack of meaningful operational involvement with the start-up and that was, on its own, a reasonable justification for the decision.”
Remember to plan in advance to secure the time and resources so that you can actively operate your business in Canada before your Start-Up Visa is issued.