Multinational corporations willing to expand the business to Canada can use the Intra-Company Transfer Program. Canada has an immigration program that facilitates the launch and establishment of operations of a Canadian startup company. This post discusses the process and requirements for transferring executive or senior manager to Canada to launch business operations in Canada. They are eligible for Intra-Company Transfer (ICT) Work Permit for Office Startup in Canada.

Apart from general eligibility requirements for an intra-corporate transfer, there are important considerations that apply only to the ICT Start-up scenario. Further, we expand on and clarify pre-conditions for business and transferee to meet before applying for transfer to Canadian startup operations.

A startup is a business established less than a year ago in Canada. Practically, startup companies could not meet the requirement of "must be doing business [regularly, systematically, and continuously providing goods or services in Canada]". Annual reports and profit/loss statements are not yet available to prove regular and systematic operations.

Appreciating this reality, efforts, expertise, and time required to expand the business and make it fully operational, Canada opens the Intra-Company Transfer Program for startups, subject to certain conditions. General rules still apply to the foreign entity [parent, subsidiary, branch, or affiliate of the Canadian startup], which must remain operational and be actively doing business.

Suppose there was a decision to move a business to Canada and send the employee to establish Canada's office. In that case, certain steps must be completed before applying for a Canadian work permit as an intra-company transferee, which does not require LMIA [Labour Market Impact Assessment].

A startup company can be constituted or organized under Canadian federal and applicable provincial laws. It can be established as a corporation, trust, partnership, sole proprietorship, joint venture or another form, as long as it is related to the foreign business. For example, suppose the corporation in the U.S. has two owners [50/50 shareholders]. In that case, a Canadian startup company can be established as a federal corporation and be 100% owned by the US-based corporation [subsidiary/parent relationship]. Alternatively, the same group [business owners/shareholders] can own a Canadian startup in a similar proportion [affiliated companies relationship].

In the case of a federal business corporation, it must extend registration to the Canadian province where it will start operations. Canadian startup can be registered at the provincial level only. The place and form of company establishment are primarily determined by the type of business activities, as well as the tax implications. 

A newly registered business in Canada will also require registration with the Canada Revenue Agency (CRA). In addition to CRA Business Number, the Canadian startup company may need one or more of other CRA accounts, such as Goods and Services Tax/Harmonized Sales Tax, Payroll, Corporate Income Tax, Import/Export, etc.

Organizing and structuring Canada's business must be done before applying for a transfer of employee/business owner to Canada to establish and make it fully operational. Legally speaking, a Canadian company will employ a transferee contingent on a work permit issuance. Submitting an online job offer through the Employer Portal is one of the pre-conditions to apply for an ICT Work Permit that can not be completed without having first registered a company and a CRA business number assigned to it. Otherwise, to explore the market, a business owner may apply for a Canadian business visa.

The first step of business registration in Canada does not require business owners' presence and can be completed by business immigration lawyers of Lerom Law Firm.

Intra-Company Transfer Work Permit generally exists for business owners, executives, senior/functional managers, and specialized knowledge employees. Middle-level managers or other staff are not eligible to apply under this category. In most cases, they would need a positive LMIA [Labour Market Assessment] to work for a Canadian company.

If an employee transfer is planned to the Canadian startup, there are additional considerations for each category. Transferring business owners, executives, or senior/functional managers will require demonstrating that Canadian operations will be large enough to support executive or management functions. Demonstrating the size of planned business at the startup stage can be done via a viable business plan showcasing the market/industry overview, competitors analysis, sales and financial forecast, and a detailed hiring plan for the next five years. A strong business plan is particularly important for the startup option of Intra-Company Transfer. Yet without the regular and systematic sale of goods or services in Canada [full operation], the business largeness, which would require executives or managers present in Canada, is primarily substantiated by the business plan. The availability of financial resources and the foreign business size/performance in the previous years are also important considerations in startup scenarios.

Multinational corporations can also transfer specialized knowledge workers to Canadian startup operations. In that case, their work must be directed by management at the Canadian company. In other words, a specialized knowledge transferee should not be the only employee at the Canadian startup company. For example, if an executive has already been transferred to Canada or a senior manager hired amongst Canadians, then a specialized knowledge worker can apply for an Intra-Company Transfer visa.

General requirements for an employee's eligibility for ICT Work Permit remain the same. At the time of transfer to the Canadian affiliate, they must have been working for a foreign entity continuously, full-time, in a similar position, for at least one year.

Some activities can be completed at the startup stage, even before an employee transfer to the Canadian company - for example, job postings for Canadian support staff, contract negotiations, website development, etc.

When transferring senior managers or executives, it is acceptable that the physical premise/office has not yet be secured. For example, the company may use a virtual mailbox address. When a business owner or executive arrives in Canada on Intra-Company Transfer Work Permit, they will lease or buy a premise. However, a specialized knowledge worker is supposed to have a workplace, i.e., an office lease would be required before transferring them to Canada.

Corporate business account for Canadian operations with sufficient startup capital is another strong indicator of the ability to succeed in the business establishment and expansion. Practically speaking, in most cases, either a Canadian director or business owner will be required to attend the Canadian Bank to open the account. In some cases, depending on the citizenship of the business owner/transferee, type of business activity, and the bank, a corporate business account can be opened remotely (not all Canadian banks offer this option though). If the Canadian bank agrees to open a business account remotely in a particular case, the identity of the business owner(s) would need to be identified and verified by the notary public in the foreign jurisdiction, as well as certain other steps completed.

Foreign affiliate or business owner(s) can then transfer startup funds (upfront investment) to the business account in the Canadian bank to support the financial ability to commence and establish a business, compensate employees, as well as cover other operational expenses in the first year or until the business becomes self-generating. The amount of upfront investment must commensurate with the financial forecast provided in the business plan.

An initial work permit can be issued for one year. ICT Work Permit for office startup can be extended contingent on the following conditions: the companies still have a qualifying relationship, a new office has engaged in the continuous provision of goods or services in the past year, and has been staffed.

Apart from business expansion into one of the most developed world economies and, supposedly, proved profits from that, this may well be a pathway for gaining Canadian permanent residence. Canadian company can extend a permanent job offer to business owners, executives, and senior managers who have been transferred and worked for the Canadian company for at least one year. A valid job offer may qualify a transferee for additional 50 or 200 points in the Express Entry, and eventually, result in gaining permanent residence and Canadian citizenship.

Read more about general requirements for intra-company transfer to Canada and complete the ICT Work Permit Free Assessment Form here.