Comparing Canadian and US Startup Visa
On July 26th, 2021, Californian Congresswoman Zoe Lofgren introduced H.R. 4681, the Let Immigrants Kickstart Employment Act, to encourage immigrant entrepreneurs and innovators to launch their US-based startups backed by qualifying investors.
In a statement announcing the proposed Act, Lofgren lamented that “For the world’s best and brightest innovators seeking a home for their companies, America used to be the top destination. Sadly, that has changed”.
The proposed act comes after Lofgren chaired a House sub-committee hearing titled: “Oh, Canada! How Outdated U.S. Immigration Policies Push Top Talent to Other Countries”, a nod to the Canadian national anthem. In the hearing, Lofgren shared reports that in the last 5 years, Canadian cities like Toronto, Montreal, and Edmonton saw larger gains in tech talent pools than American tech hubs such as Silicon Valley, New York, and Seattle.
Unlike Canada, the US still does not yet have a visa category specifically dedicated for immigrant entrepreneurs. The current American immigration policies are outdated, confusing, and have directly caused the US to fall behind in tech talent - and putting a drain on the American economy. Lofgren noted that “Start-up companies create an average of three million net new jobs per year, more than four times as many jobs as mature companies. Despite widespread evidence that high-skilled immigrants are fuelling the next generation of high growth companies, our current immigration laws don’t provide a viable visa option for such individual to start a new venture”.
In the proposed act, immigrant entrepreneurs would need to raise a minimum of $250,000 USD in qualifying investments or $100,000 USD in qualifying government awards or grants before applying for the temporary visa. After 3 years, if certain growth-related benchmarks are met, founders may be eligible to receive extensions to stay for up to an additional 5 years. To meet the benchmarks, startups must raise a minimum of $1,250,000 USD or have generate more than $1,000,000 USD in annual revenue in the two year period prior to filing for the Green Card which grants permanent residence. In addition to funding and revenue requirements, startups must also create at least 10 qualifying jobs.
The proposed American Startup Visa is still far more complicated, expensive, and a much longer process compared to the current Canadian Startup Visa.
First, for the Canadian Startup Visa, there is no minimum investment required. Founders must obtain a Letter of Support from a designated organization before applying for permanent residence.
Following the Letter of Support, which can be obtained in 21 weeks with Canada Startup Company, applicants can receive permanent residence in only 12-18 months. This is a much faster process than the American Visa that requires a minimum wait of 3 years before applicants may file for their Green Card.
Furthermore, applicants must prove that they have the necessary funds to support themselves and any spouse and dependents they bring with them to Canada. This amount depends on the number of family members you have, but is in the range of $13,000-$35,000 CAD.
Last, applicants need only to show their active involvement in the management of the business in Canada. There are no requirements in terms of revenue or jobs. The Canadian federal government understands that not all startups are hugely profitable in their first few years, and applicants shouldn’t be punished for such.
How do you think the American and Canadian Startup Visas compare?