Is Canada the new economic gateway to the US for entrepreneurs?
For entrepreneurs looking to scale their business globally, Canada is an often overlooked but an easier option when trying to expand into the US. It provides stability to the entrepreneurs and their families while allowing them to focus on their startups without getting tied in the immigration loop.
The United States is typically viewed as the primary destination to either build or expand a startup in the North American and global markets. This is not surprising, considering it is the largest global market for venture funding, and Silicon Valley is the world’s foremost hub for technology and innovation.
However, the US immigration process can be challenging especially for tech entrepreneurs. Thankfully, there are alternative options in other countries like Canada that also offers easier paths to doing business in the US. My team at Launch Academy has had the opportunity to work with international entrepreneurs from over 40 countries through our Maple startup accelerator program. We’ve helped a wide range of startups from Y Combinator graduates, to multi-million dollar startups, and even early-stage startups, all with a common goal of expanding their businesses in North America. Launch Academy has been designated by the Canadian government to nominate companies for the Canadian Startup Visa program and most of the entrepreneurs we work with take advantage of this program.
What makes Canada a great place to do business?
Canada has made rapid strides in attracting top-quality entrepreneurs from across the world to launch businesses through their dedicated Startup Visa Program. In addition to a seamless immigration process, Canada also offers incentives for immigrant entrepreneurs who are looking to relocate and scale their companies globally. Unlike many other countries with startup visa programs, Canada does not impose any age limits or additional challenges for entrepreneurs over the age of 35.
Operating as a Canadian company in the US is far easier than as an international entity. With the Canada-United States-Mexico Trade Agreement, there are powerful economic ties between the three North American countries. In addition to the US, Canada offers preferential market access through 15 free trade agreements with 51 different countries. Together, these agreements cover 1.5 billion consumers worldwide. For entrepreneurs that still need to find their way to a more established presence in the US; Canadian Permanent Residents and Canadian citizens benefit from a quicker immigration path to expanding into the US market. This is achieved by the incorporation of a US subsidiary to your Canadian company. This structure would then give founders and employees of the Canadian company the ability to apply for an L1 visa which will allow you to work in the US while still maintaining the benefits of your Canadian PR or citizenship. With benefits such as these, it’s no wonder so many international entrepreneurs are looking to Canada as their gateway to the North American market.
Tech Landscape in Vancouver
As the ninth-largest in the world, Canada’s economy is projected to grow by 1 percent and 1.3 percent in 2023 and 2024 respectively. A strong and growing economy is good for businesses, especially for technology startups looking to carve out new markets for their products and services. In 2021 more than 14 tech companies in Vancouver alone were crowned as Unicorn companies. Vancouver’s tech landscape is rich in various industries such as artificial intelligence, quantum computing, fintech, SaaS, virtual reality/augmented reality, and much more. In 2019, a significant number of technology companies from Silicon Valley opened offices in Vancouver and started hiring teams locally and leveraging the various favourable immigration programs in Canada in order to bring international talent into their North American offices.
A number of Indian technology multinationals have expanded into Canada and are reaping the benefits as well. Tata Consultancy Services, Tech Mahindra, Wipro, Infosys, and Mphasis are some of the more notable names, but younger startups are also getting in on the opportunities. Companies such as VDO.AI, PushAssist, Tryangled Solutions, Supplierscave, Appmaker, MagSway, New Age Robots, HostBooks, and Shoppr.ai are all making waves in Canada. These companies have an added advantage of leveraging a support network through programs like our Maple Program. They’ve taken advantage of the expedited Permanent Residency especially designed for the founders and their families through the Canadian Startup Visa Program.
Financial support and quality of life
In addition to the immigration advantages, Canada offers provisions for startups to lower their business costs through non-dilutive funding opportunities including tax credits. For example, businesses in Canada can claim Scientific Research and Experimental Development (SR&ED) tax deductions, which can offset their research and operating costs by up to 65 percent.
Canada consistently ranks amongst the best places to live in the world. According to the 2021 Best Countries Report from US News and World Report, Canada ranked number 1 out of 78 countries, getting high marks for the Quality of Life, Agility, Entrepreneurship, and Open for Business categories.
Another interesting finding based on Google searches puts Canada in the top position amongst the most popular countries for moving abroad, with 30 countries having Canada at the top of their search list. According to the report, Canada is one of the safest places to live, boasts low unemployment rates, and has an inviting immigration policy.
Apart from some of the major advantages mentioned above, Canada also has a very diverse and welcoming population, a stable political system, well-defined law and order, secure banking systems, a powerful passport with visa-free travel to more than 140 countries, and an abundance of natural beauty.
What’s outside North America?
If North America isn’t the ideal destination for you, there are plenty of other global markets such as the UK and Dubai for building or expanding your startups.
The UK startup visa program offers fast-track entry to the UK. The program is designed to make it easier for entrepreneurs to enter the UK and start their businesses quickly. Unlike some other entrepreneur visa programs, the UK startup visa program does not require an initial investment from the entrepreneur. Successful applicants are granted a two-year visa, which can be extended for an additional three years. After five years, entrepreneurs may be eligible to apply for permanent residency.
Although not quite the same as a startup visa, many people are eager to secure a Golden Visa in Dubai. The "golden visa" in Dubai is a long-term residency visa program that grants eligible individuals and their families the right to live, work, and study in the United Arab Emirates (UAE) without the need for a national sponsor. The program is designed to attract high-net-worth individuals, investors, and talented professionals to the UAE, and is open to people who meet certain criteria, such as owning property or a business in the UAE or having a certain level of education or professional achievement. The golden visa provides recipients with a renewable 5- or 10-year residency permit, and may also lead to eligibility for citizenship in some cases.
Canada is calling!
Canada is officially inviting international entrepreneurs to set up their businesses in the country – it is willing to accept up to 14,500 new businesses by 2025 under the Federal Business immigration program.
Relocating and setting up your business in Canada is an often overlooked but much easier option than trying to set up operations directly in the US. This option can provide entrepreneurs and their families stability while allowing them to focus on establishing and scaling their startups rather than getting tied in the immigration loop.
If you are a founder looking to expand your business to North America, Launch's Maple program might be the right fit for you. Launch helps tech companies identify the best path for immigration to Canada for their team and their families through Canada’s Startup Visa, Express Entry, Provincial Nomination, or Global Talent Stream programs. For more information visit launchacademy.ca/maple.