Lessons from a Start-Up Visa Refusal: Ensuring Genuine Business Intent
Mohsen Khorvash-RCIC-IRB
Introduction
Canada’s Start-Up Visa (SUV) Program has attracted a huge number of applications in recent years, reflecting its appeal to global entrepreneurs. This surge has placed immense pressure on Immigration, Refugees and Citizenship Canada (IRCC) officers, who are tasked with maintaining the program’s integrity while managing high volumes. As a result, officers have become stricter, often relying on inventory management systems that prioritize efficiency over nuanced evaluation, sometimes at the expense of thorough assessment. In this challenging environment, applications must be as complete and flawless as possible to ensure faster processing with fewer hurdles. A recent judicial review of a visa officer’s refusal under the SUV Program highlights the importance of demonstrating genuine business intent and offers critical lessons for applicants and their representatives.
In 2020, four applicants from India and Vietnam applied for permanent residence under the SUV Program, proposing a start-up to develop oncology software. Despite securing a commitment from a designated entity, their applications were refused. The visa officer cited concerns about:
- Ownership: An inactive U.S. company held 49% of the start-up’s shares, raising doubts about its role.
- Lack of Canadian Engagement: The applicants had no contact with Canadian health professionals, focusing instead on global markets.
- Minimal Growth: The business showed little progress over three years, with applicants continuing separate careers.
- Financial Projections: The officer found financial plans unsubstantiated.
- Choice of Canada: Canada’s lower cancer rates questioned its suitability as the headquarters for an oncology business.
The applicants’ responses to a Procedural Fairness Letter failed to address these concerns adequately, and the Federal Court upheld the refusal as reasonable, emphasizing the need for genuine business intent under section 89(b) of the Immigration and Refugee Protection Regulations (IRPR).
Lessons Learned
This case underscores that meeting formal SUV requirements, such as obtaining a designated entity’s commitment, is insufficient without clear evidence of business intent. Key lessons for applicants and RCICs include:
- Demonstrate Genuine Business Intent
- Submit a detailed business plan with clear goals and timelines.
- Provide evidence of tangible progress (e.g., product development, market research).
- Update applications with ongoing efforts to counter delays.
- Clarify Ownership Structure
- Justify share distribution and each shareholder’s role.
- Ensure all shareholders contribute meaningfully.
- Document contributions to avoid suspicion of artificial arrangements.
- Engage with Canadian Entities
- Establish early contact with Canadian partners or clients.
- Include documentation of interactions (e.g., emails, letters of interest).
- Show how these ties integrate the business into Canada’s market.
- Show Business Growth and Involvement
- Document steps to advance the business during processing (e.g., prototypes, agreements).
- Provide evidence of personal involvement (e.g., milestone reports).
- Explain delays with clear mitigation strategies.
- Substantiate Financial Projections
- Base projections on market data or expert analysis.
- Clearly explain assumptions and methodologies.
- Defend fundraising and revenue forecasts robustly.
- Justify the Choice of Canada
- Highlight Canada-specific advantages (e.g., resources, talent).
- Align the business with Canada’s innovation priorities.
- Emphasize personal or professional ties to Canada.
Conclusion
The Start-Up Visa Program offers entrepreneurs a pathway to build innovative businesses in Canada, but its popularity has intensified IRCC scrutiny. Officers’ reliance on systematic assessments, often driven by inventory management systems, demands applications that are thorough and well-substantiated. This case illustrates that genuine business intent, as required by section 89(b) of the IRPR, is critical to avoid refusals. RCICs and IRB professionals must guide applicants to address potential concerns proactively—through clear ownership, local engagement, demonstrated progress, credible financials, and a strong rationale for choosing Canada—to maximize success in this competitive program.
Disclaimer
The information provided in this article is for educational purposes only and does not constitute legal advice. Immigration laws and policies are complex and subject to change, and each case is unique. For personalized guidance on your Start-Up Visa application or other immigration matters, please contact our team of experienced Regulated Canadian Immigration Consultants (RCICs). We are here to help you navigate the process and build a strong, compliant application. Reach out to us today for expert assistance.
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