Starting a Business in Canada on a Work Permit

Jul 30, 2023


Curious about launching a business in Canada while holding a work permit? It’s not feasible. If your query is whether non-Canadians can establish a business in Canada and reside there permanently, the response is negative.

To lawfully commence an enterprise in Canada as an individual, you must either be a Canadian citizen or a permanent resident (landed immigrant). Unfortunately, as a foreign worker possessing a work permit in Canada, you do not fulfill either of these criteria.


The Limitations of Work Permits in Canada

Most work permits in Canada are restricted to a specific job, employer, and duration (known as closed permits). Engaging in other employment, even if it’s for the same employer listed on your permit or doing side jobs, would violate your permit’s conditions. It is imperative to either extend your permit or leave Canada when it expires.

For a closed (employer-specific) work permit, follow these steps:

1. Submit a job offer to Immigration, Refugees and Citizenship Canada (IRCC).
2. Pay a $230 fee for employer compliance.
3. Obtain a job offer number.

Different types of work permits exist, and certain businesses may offer easier permit extensions for employer-specific cases. These businesses contribute to Canada by providing significant social, cultural, or economic benefits or creating jobs for Canadian citizens or permanent residents.

Nonetheless, it is important to note that having a work permit doesn’t allow you to establish a company. If your goal is to start a business, the appropriate path is to pursue permanent residency.


Permanent Residency (PR)

People with permanent residency in Canada, also known as landed immigrants, have the legal right to initiate businesses in the country. To obtain permanent residency, it is necessary to submit an immigration application for Canada. There are multiple immigration options available:

1. The Start-Up Visa program for aspiring entrepreneur immigrants to Canada.
2. Self-employment immigration to Canada.
3. Skilled worker immigration to Canada.

The scope for immigrating to Canada as a self-employed person is limited. To qualify for this program, individuals must possess relevant experience in cultural activities or athletics, and have the intention and ability to make a significant contribution to Canada’s cultural or athletic landscape.

When applying as a skilled worker, a decision must be made whether to immigrate to Quebec or another province. Quebec operates its own skilled worker selection program. For immigration to any other province in Canada as a skilled worker, the application must be submitted through the Express Entry program.


Express Entry

To be able to move to Canada through this immigration program, you must meet the requirements for one of these three programs:

1. The Federal Skilled Worker Program
2. The Federal Skilled Trades Program
3. The Canadian Experience Class

If you meet the criteria, you will need to complete an online profile providing details about your skills, education, work experience, and language proficiency in English or French. If you are immigrating with a spouse, you must also include their information.

Applicants are given a point score based on a ranking system, and those who meet the criteria will be placed in a pool of potential candidates. The IRCC regularly conducts Express Entry rounds of invitations, inviting the highest-ranking candidates from the pool to apply for permanent residency in Canada. It’s important to note that candidates undergo screening by the IRCC and may be deemed inadmissible based on various factors, including:

– Security concerns, such as involvement in espionage, terrorism, or subversion.
– Committing human rights violations outside of Canada.
– Being a resident of a country currently under sanctions by Canada or other international organizations.
– Conviction of serious criminal offenses within or outside of Canada.
– Membership in recognized criminal organizations or engaging in illicit activities like money laundering or people smuggling.
– Health concerns, including a condition that poses a threat to the Canadian public or necessitates extensive medical care in Canada.


Another Possible Way

You can consider initiating a collaboration or incorporating a company in Canada, as long as it’s not a sole proprietorship. This can be achieved by joining forces with Canadian citizens or permanent residents. However, it is crucial to seek legal advice beforehand, as it could potentially jeopardize your work permit. Additionally, it is important to understand that being a partner or shareholder in a Canadian business does not guarantee long-term residency in Canada.



Starting a business in Canada as a non-Canadian on a work permit is not possible. Work permits have limitations and are only valid for specific jobs and employers. To legally start a business, you need to be a Canadian citizen or a permanent resident. There are different types of work permits, but they don’t grant authorization to start a company. The path to launching a business in Canada is through seeking permanent residency. This can be done through various immigration programs like the Start-Up Visa, self-employment, or skilled worker programs. Another option is to partner with Canadian citizens or permanent residents.

CBES is here to assist you; feel free to contact us for expert guidance.



Launch Your Business in Canada

Contact us right now and we will help You!

Actions to Take After Receiving Your Incorporation Certificate

This guide on steps to take after incorporating a company is aimed at individuals who have recently completed the incorporation process in Canada. It provides answers to the question: "What actions should I undertake now that I have my incorporation certificate?"...

Incorporation in Canada

When you decide to start your own business in Canada, one of the first steps you might consider is incorporation. Incorporation involves creating a legal entity that is separate from its owners. This process is recognized across Canada and comes with a host of...

Incorporate Your Business in Canada

Curious about the process of forming a corporation in Canada? We're going to break down the main stages required, ranging from deciding on the location of incorporation to selecting a name for your corporation and submitting the necessary paperwork. Keep in mind that...

Claiming Business Expenses in Canada

Canadian taxpayers have the opportunity to reduce their tax bills by deducting business expenses when filing their tax returns. Those interested in taking advantage of these deductions should know that the Canada Revenue Agency (CRA) permits the deduction of any...

Starting a Business Out of Your Home in Canada

Running a home business offers the best of both worlds. It provides all the advantages that come with owning a small business. However, by operating from your home, you also get to enjoy flexible working hours, no commute, and some tax benefits. In essence, running a...

Essential Tax Deductions for Home-Based Businesses That You Shouldn’t Overlook in Canada

Operating a business from home in Canada mirrors the tax obligations of traditional businesses with regard to income taxes. Provided you have earnings to offset and adhere to the regulations, numerous business expenditures can be subtracted, thus reducing your income...