Canada: Setting Up A Business In Canada? Don't Forget About Immigration Considerations

Last Updated: September 5 2019
Article by Bill MacGregor

Foreign companies and foreign nationals seeking to start business operations in Canada need to be aware of Canadian immigration and entry rules to ensure a smooth entry into the Canadian market.

Corporate and in-house counsel often initially focus on other considerations such as type of business entity, tax consequences, regulatory barriers etc. But corporate immigration expertise should be obtained at the outset to ensure that immigration considerations are taken into account, and to maximize options for the entry of foreign nationals who may need to work for or support the business in Canada. 

Corporate Structure Affects Options

Foreign companies entering the Canadian market often do so by setting up a Canadian subsidiary or branch operation. Canadian immigration advice should be sought before the structure is finalized. Choosing the wrong structure may undermine or delay the ability to obtain work permits for key personnel.

The ownership relationship between the foreign company and the Canadian entity matters and will dictate work permit options. For example, in order to preserve the intra-company transferee (ICT) work permit option for foreign national managers and specialists to transfer to Canada, the Canadian entity must have a qualifying relationship with the foreign employer of the transferee. The transferee must be entering Canada to work in a parent, subsidiary, branch or affiliate of the foreign employer. The transferee must have worked for the related foreign company for at least 12 consecutive months in the three years prior to the filing of an ICT work permit application. 

There are special eligibility rules where a Canadian start-up is seeking an ICT work permit. These rules focus on demonstrating that the new Canadian entity will be viable and will be able to support the salary of any transferees. For the purpose of an ICT work permit a "start-up" is an entity that has been incorporated in Canada less than 12 months prior to the ICT work permit application.

Some free trade agreements, such as NAFTA (with the USA and Mexico), CETA (with the EU) and the CCPTPP (Trans-Pacific Partnership) provide "investor" work permit options. To be able to utilize these investor work permit provisions, the entity established in Canada must be owned at least 50% (directly or by stock) by individual or corporate persons from the eligible home country. The applicant must usually have the same citizenship. The category can be used to obtain work permits for executives, managers or personnel who possess essential skills needed by the operation in Canada.   

Foreign companies will sometimes enter Canada via an acquisition of an existing Canadian business.  The post-closing ownership structure will affect potential work permit options. Mergers and acquisitions in Canada may also create other immigration issues.  Refer to this Gowling WLG article for further information: Immigration Implications of Mergers and Acquisitions.

Foreign Entrepreneurs

Corporate structure also matters for foreign entrepreneurs or high net work individuals who want to set up a business in Canada and apply for a work permit and/or permanent resident status.   

For example, if the individual is hoping to apply for an owner/operator Labour Market Impact Assessment (LMIA) to obtain a work permit, the individual must own 50% or more of the Canadian entity. On an owner/operator LMIA application, the company does not have to demonstrate that it tried to recruit a qualified Canadian or permanent resident for the position. 

If the individual hopes to utilize one of the provincial nominee programs for business people, then the specific rules of that particular provincial nominee program will dictate such things as the minimum investment amount and the minimum percentage ownership that the foreign individual seeking the nomination must demonstrate.

Canada also has a Start-up Visa Program that can sometimes be used to obtain permanent resident status and a work permit while the permanent resident application is pending.  The program has very specific rules regarding the ownership and shareholding structure that a qualifying start-up visa business must have to be eligible. It also requires the immigrant entrepreneur to obtain the support of a designated venture capital fund, angel investor or business incubator.

As a general rule, the options for entrepreneurs and business people require the individual to be in Canada to actively manage the Canadian business. 

Both short-term and long-term goals should be taken into consideration and reviewed by a corporate immigration lawyer to ensure that the work permit strategy does not undermine potential permanent resident options. 

Cross Border Sales into Canada and After-sales Service

Some foreign companies enter the Canadian market by selling their products into Canada instead of having an entity in Canada. The contractual language used in sales agreements or related service agreements is critical to support the entry of after-sales service providers.

Canada's immigration regime allows eligible after-sales service personnel to enter Canada to provide after-sales service such as installation, commissioning, servicing and training to the purchaser's personnel where non-Canadian equipment, goods or software are sold or leased to a Canadian entity.

However, to be able to use the after-sales service category, the underlying sales or lease agreement or related service agreement entered into at the time of the sale or lease must contain clear contractual language that confirms that after-sales service is part of the sale. If the after-sales service is to be provided by a third party and not by the foreign vendor's employees, that must be set out in the agreement.

If the sales agreement does not contain the correct content, foreign nationals seeking entry to provide after-sales service will need a work permit instead of being able to enter Canada as a business visitor.

Gowling WLG's Immigration Group members can review cross border sales agreements before they are finalized to suggest language to support the entry of after-sales service personnel.


Immigration law intersects with many aspects of corporate and commercial law. Gowling WLG's Immigration Group can provide advice to manage issues and maximize the ability of foreign companies, entrepreneurs and their personnel to enter and work in Canada.   

Read the original article on

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Dale & Lessmann LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Dale & Lessmann LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions