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Why are work permits for self-employed, Startup’s, entrepreneurs and business immigration cases being refused by the IRCC?
Lately, we have seen a high number of refusals for the C10, C11, C12 Intra-Company Transfer LMIA exempt work permits, as well as for the very popular Startup Visa work permits.
We’re going to do a deep dive into the key elements of refusals for these types of investor/entrepreneurial work permits, and what IRCC uses against you to justify these refusals.
This will be one of a series of articles that we will be publishing over the course of the next several months regarding LMIA exempt work permit refusals under the entrepreneurial, self-employed and investment categories such as C10, C11, and C12. These categories include Startup Visa, Intra-Company Transfers, and entrepreneurial self-employed.
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We must make a small disclaimer about what we are explaining today. From the point of view of the Canadian immigration department, also known as the IRCC, all applicants fall into 2 main groups or we like to call them ‘IRCC buckets’. Either you are from a high refusal region which has a huge inflow or demand of immigration to Canada, or you’re from a non-high refusal region which could be either visa exempt or non-visa exempt. The non-high refusal regions include USA, Europe, Korea, Japan, Hong Kong, Mexico, Israel, Chile, Colombia, Peru, Brazilians with US visas, just to give you a few examples. High refusal regions or perhaps even high-volume regions can be anywhere in Africa, Middle-East, South East Asia and Far East – the most notorious high-refusal countries would be Venezuela, Cuba, Zimbabwe, and Iran. These would be the most extreme cases of high refusal regions with over 90% refusal rates.
What we are discussing in this article, mainly has to do with the visa-required countries that fall into IRCC’s bucket of high refusal or high-volume regions which lead to many refusals.
Hundreds of Startup Visa work permits are being refused by the IRCC and were refused in the month of November 2022 and continuing.
Here is why:
* The IRCC is cracking down on all Startup Visa applications to weed out non-qualified applicants or groups which do not have the true intention or capacity to start or run the Startup business.
* How are they doing this? They have asked all Startup Visa applicants to use category C10 of the entrepreneurial significant benefit work permit to apply. They are using the same criteria of the C10 LMIA exempt work permit to refuse you stating that either:
A: There will be no significant benefit or none planned for Canada based on your application to receive a work permit and arrive in the country.
B: They have even used the logic that the applicant should recheck with Service Canada for an LMIA requirement since this is another point included in the C10. Officers can require applicants to take this route if there is no clear significant benefit for Canada.
C: How much progress do you have on your Startup business? How can you prove to the IRCC that you are working on it and urgently need to enter Canada with a work permit for the success of your Startup? If you cannot prove this, and you are on the IRCC hit list (in terms of nationalities), you can be refused.
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Before we move on to the Intra-Company Transfer work permit refusals, let’s suggest some activities that you can do for Startup Visa work permit applications:
Ask yourself the following questions:
1: Do you have proof of your developed product or platform? i.e., MVP
2: What proof do you have that your Startup business is real or ‘active’?
3: Did you fund the Startup bank account to show the investments ready to be made?
4: Have you posted job ads to hire Canadians to help with your new Startup business?
5: Do you have documented experience in this industry that you can prove to the IRCC officer, showing that under C10 you have the expertise and recognition as an expert to run and build up this Startup?
6: Do you have a clear roadmap for your business development inside Canada for your Startup?
7: Do you have ongoing communication with industry stakeholders in Canada or potential vendors or customers or even partners for your Startup?
8: And finally, is your case strong enough to take for Judicial Review if it is refused incorrectly by IRCC?
For the Intra-Company transfer C12 work permit, these are the reasons that IRCC uses to refuse you:
A: Your true intention to set up a branch/subsidiary/joint venture inside Canada is to gain status. This means that they don’t believe that you are doing this for business purposes, but rather for immigration. This is the typical refusal note for any applicant from a high refusal region which we mentioned earlier in this article.
B: You are funding the new Canadian branch from your own personal investments as an applicant, not funding it from the parent company account.
C: You are moving over more foreign workers to the new branch than Canadian full-time employees (during the first year).
D: You did not clearly establish the relationship between the parent company and the new branch in Canada, or the applicant’s role in the parent company for minimum 1 year, before transferring over to the Canadian entity.
E: You do not have a business registered in Canada yet, a bank account that is funded, or a commercial lease agreement for the place of your business inside the country.
F: There is no justifiable reason for your company to set up or invest in Canada, hence they will use the first refusal we mentioned on this list for your work permit. This basically means you do not have any prior visits, business dealings, or partnerships that are justifiable in Canada to invest here.
G: Your parent company’s revenues, profits, and size does not justify the investment in Canada. The basic example of this would be that you own a small business in your home country with 3-4 employees, and you are declaring $50,000 in profit every year. Your business plan for Canadian immigration states that you will invest $200,000 and hire 10 staff. Does this make sense to you? Well, it surely won’t make sense to the IRCC officer either. The investment cannot come from you personally as the applicant.
H: The business plan which you submitted includes immigration information about your application, the C12 category, your name as an applicant, and the fact that it is prepared to support an application for an ICT work permit. These are all red flags for IRCC to refuse you. Make sure you know how to prepare the right business plan for your work permit application.
I: There is no significant benefit clearly stated or justifiable in your application to enter Canada with a work permit. Remember, that significant benefits for each region or community of Canada can be different. A $200,000 business inside Toronto or Vancouver may not be significant, but a $90,000 investment in a very poor region of the country or under-populated area might be significant. Also, remember that under C10 and C11 you can also leverage the social & cultural benefit clauses of these LMIA-exempt work permits.
Remember that the ICT or C12 LMIA exempt work permit category under the International Mobility Program was created for large corporations to transfer over key staff and executives, not for immigration. So, an ideal day for an IRCC officer to review these ICT C12 work permits is to see applications from Amazon, Microsoft, Google, Procter & Gamble, Adidas or Nike, or some large manufacturer or corporation sending over staff from overseas. That’s their golden standard, so if you know how IRCC officers think, then you can most likely be able to prepare the correct application.
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Let’s also quickly review the C10 and C11 LMIA exempt work permits under the significant benefit for Canada categories.
Remember that C11 is for self-employed individuals and entrepreneurs which can include entertainment, art, cultural or other types of specific professions where you do not need to hire Canadians for the significant benefit. You are not expected to hire people and if you include that you will hire 5-6 persons in your business plan, this will be a red flag for IRCC. You must utilize the key significant benefit for Canada under the cultural & social sub-categories. You do not need to invest hundreds of thousands of dollars, you just need to prove that your presence and activity in Canada will bring significant benefit, as it has in your own home country, based on your current profession, and, of course, that you meet all the eligibility criteria outlined in the IRCC C11 category.
Under the C10 LMIA exempt work permit category, you can leverage significant economic benefits by starting a brand-new business, buying an existing business, or a combination of these. The IRCC officers will be scrutinizing your applications in detail if you are from a high refusal or high-volume country, as well as if your business plan or significant economic benefit is justifiable. They will use similar refusal reasons that we covered for the Startup Visa program; however, their main refusal reason is that you are applying to claim status and not to really start or run a business, or that there is no clear benefit for Canada to let you in.
The key point to remember is that if you plan on starting or buying a business in the major cities, and you are not investing large sums of money, you will be refused. Either go to rural parts of Canada if your investment is not significant or bump up your project scope. Similar to C12, if you’ve never visited Canada or have no prior business connections or dealings, you will be refused if you apply from a high refusal or volume region, so make sure you do an exploratory trip if you don’t already have business dealings in Canada.
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