No. To legally start a business in Canada as an individual, you will have to be a Canadian citizen or a landed immigrant (permanent resident). Note that as a foreign worker on a work permit in Canada, you are not considered a Canadian citizen or a permanent resident. Most Canadian work permits are valid only for a specified job, employer, and time period (i.e., closed work permits).
To even work on the side, or to do other jobs for the employer noted on your work permit would go against the conditions of your work permit.
What is a Work Permit in Canada?
A work permit in Canada is a legal document that grants a foreign national the right to work or gain employment while in the country. An open work permit refers to a work permit that is not tied to a single employer or location. A foreign national with a valid open work permit may work for more than one employer in multiple locations in Canada. However, note that certain open work permits tend to come with additional requirements or restrictions.
Know that it is against the law to start a business in Canada with just a work permit, even if it is an open one. Also note that once your work permit expires, you will be expected to leave Canada or get an extension. To start a business in Canada, you will have to first satisfy a residency requirement by providing a Canadian address. With an open work permit, you are not yet a Canadian citizen or landed immigrant, but there are still ways around these regulations.
Other Work Permits to Consider When You Intend to Start a Business as a Foreigner in Canada
Since you can’t legally start a business in Canada with an open work permit, here are other work permit options to consider;
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CUSMA Investor Work Permit
Under the Canada-United States-Mexico Agreement or CUSMA (formerly known as NAFTA), citizens of the United States or Mexico who are looking to start a new business or move an existing business to Canada may qualify to apply for Investor work permits to conduct their Canadian business.
The CUSMA Investor program allows American or Mexican entrepreneurs who must have made a substantial investment in a Canadian business to enter Canada to develop and direct that business. Most often, the investor is expected to be the majority shareholder or sole owner of the business. As part of the application, the investor will need to put together a business plan that shows in extensive detail the total capital required to start or purchase the business.
It should also show adequate evidence that a good portion of these funds has already been permanently invested in the project. Note that there are expectations that the business will create jobs or provide other benefits to the local economy and will not be solely self-supporting to the investor.
CETA Investor Work Permit
Under the Comprehensive Economic and Trade Agreement, citizens of European Union member states who intend to start a new business or transfer an existing business to Canada may qualify to seek for Investor work permits to ensure that they can carry out their Canadian business. This category is more like the CUSMA Investor stream noted above.
Intra-Company Transfer Work Permit
Also, note that willing entrepreneurs who intend to continue to run an existing foreign business while also expanding into Canada can be eligible for an Intra-Company Transfer work permit. The Intra-Company Transfer program is mainly used by multinational corporations to transfer management and key staff between branches, but it can also be suitable for entrepreneurs looking to move to Canada and start a new business.
An intra-company transfer is also very suitable for entrepreneurs who are looking to divide their time between managing their current overseas business and building a new Canadian branch, subsidiary, or affiliate. According to reports, the basic requirements of the program include:
- The new Canadian business will need to scale through a viability test, which can be done by making available financial information, evidence that the physical premises have been secured, and a business plan that shows that the business will hire at least one Canadian citizen or permanent resident during the first year of operation.
- The foreign company and the Canadian businesses will also have to be related in terms of their ownership structure. The two companies will need to have either a parent-branch, parent-subsidiary, or affiliate relationship.
- The person being transferred to manage the new Canadian business will also need to have been employed by the foreign business in a full-time senior managerial or executive position.
Self-employed Work Permit
This sort of work permit can be a good choice for entrepreneurs who are the sole or major owners of a Canadian business. In this sort of circumstance, the work permit could be exempt from the Canadian government’s labor market test, known as an “LMIA” or Labour Market Impact Assessment.