Starting a business in Canada as a newcomer: what your status lets you do

Newcomers start businesses at higher rates than people born in Canada, and the legal system is genuinely open to it. But what you can do, and when, depends on your immigration status in ways that are easy to get wrong. Owning a business and working in one are different things in Canadian immigration law, and confusing them can put both the business and your status at risk. Here is the map, status by status.

Immigration law does not stop anyone from owning things in Canada. Buying shares in a corporation, even all of them, is ownership, and ownership alone is not work. What is regulated is working: actively running the business, serving customers, managing staff, doing the thing the business does. A person with no Canadian status at all can incorporate a company and hold its shares; whether they can operate it from inside Canada is a separate question answered by their status. Keep that split in mind through everything below.

If you hold permanent residence, business ownership works exactly as it does for citizens. You can register a sole proprietorship, form a partnership, or incorporate, and work in the business without any immigration permission. Ontario removed its director residency requirement in 2021, so an Ontario corporation does not need any Canadian-resident director at all. Worth knowing if your co-founders are still abroad. Federal incorporation is different: the Canada Business Corporations Act still requires that at least a quarter of directors be Canadian residents, which for founder teams that are mostly overseas makes an Ontario corporation the simpler vehicle. The practical hurdles for new PRs are commercial rather than legal. A short Canadian credit history makes banks and landlords cautious, so expect requests for larger deposits or personal guarantees, and start building business banking relationships early. Our legal checklist for starting an Ontario business applies to you exactly as written.

This is where the ownership-versus-work distinction bites. If you hold an employer-specific (closed) work permit, you are authorized to work only for the employer named on it. You can own shares in a side business, but working in it, evenings, weekends, helping out at the counter, is unauthorized work, and unauthorized work can cost you your status and complicate every future application. The business can exist; you cannot run it yet.

Open work permit holders have more room: an open permit generally allows self-employment. Spouses of workers in eligible categories and post-graduation work permit holders are the common cases. Two cautions before you build on that. First, check your own permit, because even open permits carry conditions. Second, think ahead to permanent residence. Since changes announced in 2025, self-employed experience has become harder to count toward Express Entry's Canadian Experience Class, so a PGWP holder spending their permit years building a business instead of accumulating employee experience may be trading away their strongest PR pathway. That trade can still be worth it, but make it deliberately, with advice, not by accident.

A study permit authorizes limited off-campus work in hours per week, and running a business eats hours unpredictably. A student can own a business, but operating one within the weekly cap is difficult to do compliantly and difficult to prove afterwards. If entrepreneurship is the plan, the cleaner sequence is usually to finish the program, move to a post-graduation work permit, and build from there with the Express Entry caution above in mind.

The rules shifted hard this year. The federal Start-Up Visa program, for a decade the main route for founders with investor backing, closed to new applications on January 1, 2026, buried under a backlog measured in years. What remains:

• The C11 entrepreneur work permit is now the main federal door. It is a temporary permit under the International Mobility Program for founders who own at least 51% of a Canadian business and can show the business delivers a significant benefit to Canada: jobs, innovation, or regional impact. Current permits run about 18 months, renewable while the business performs. It is a work permit, not permanent residence; PR comes later, through whatever program the applicant qualifies for.
• Provincial entrepreneur streams under the Provincial Nominee Programs admit founders who invest and operate in a specific province, though several streams have been paused or retooled as provinces absorbed federal allocation cuts. Check the current status of any stream before building plans on it.
• Intra-company transfers and trade-agreement permits serve established foreign businesses opening Canadian operations, a different profile from the individual founder but often the right tool for one.

Once your status allows you to operate, the mechanics are the standard ones: structure, registration, business number, HST at $30,000, licences, WSIB if you hire. Two wrinkles are newcomer-specific. Banking: opening a business account requires identity and status documents, and banks apply extra scrutiny to non-resident shareholders, so bring incorporation documents, your immigration documents, and patience. Tax residency: your obligations to the CRA turn on tax residency, which is not the same thing as immigration status, and getting the analysis wrong at the start is expensive to fix. Settlement.org↗ and the federal starting a business hub↗ are solid free references for the general steps.

This is one of the few areas where business law and immigration law have to be read together, and it is exactly where we sit: Telesh Law Firm practises both corporate law and immigration law. If you are building a business and a life in Canada at the same time, talk to us before the two plans collide.

• For newcomers
• For businesses
• IRCC
• Rule changes

This article is general information, not legal advice, and does not create a solicitor-client relationship. It is current as at its publication date and is not revised as the law changes. For advice on your specific situation, book a consultation or call 416-639-0887.

Written by

Caleesis Telesh

Founder & Principal Lawyer

LL.B. · B.A., York University · Member, Law Society of Ontario

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