Letter of Support for Canada’s Startup Visa and the Process of Obtaining It

The Letter of Support for Canada’s startup visa is one of the most crucial requirements for launching a startup in Canada. The Letter of Support (LOS) is issued in response to the applicant’s business plan by one of the investment or supportive organizations approved by the Canadian government. Receiving a Letter of Support from a supportive organization means that the center intends to invest in the applicant’s business plan. Thus, with the Letter of Support in hand, an individual can apply for Canada’s startup visa. However, obtaining the Letter of Support involves several stages. Therefore, if you also intend to launch your startup in Canada and obtain permanent residency in this country, stay with us in this ExpertUP article to examine the Letter of Support (LOS) in detail.

What is the Letter of Support for Canada’s Startup Visa (LOS)?

Launching a startup in Canada is one of the country’s immigration programs that can be used to obtain permanent residency in Canada. To launch a startup and obtain a visa, the interested group must submit their innovative idea as an economic business plan to their chosen investment organization in Canada. This organization then reviews the business plan and either approves or rejects it. If the idea is approved by a Canadian government-approved organization, this center sends a Letter of Support to the Immigration Department of Canada. Sending the Letter of Support for Canada’s startup visa means that the investment center intends to support the proposed business idea. Thus, the group presenting the business plan can apply for a Canadian visa and launch their startup in the country. Generally, the process of obtaining the Letter of Support for a startup in Canada can be outlined as follows:

• Establishing contact with one of the investment organizations approved by the Canadian government and presenting the business plan
• Presenting and explaining the business plan either in person or virtually and attempting to convince the organization to invest
• Receiving the Letter of Support for the startup in Canada if the business plan is approved by the investor

Types of Investment Organizations for Receiving a Letter of Support

The Canadian government, based on specific criteria, has designated several business groups to invest in and support innovative startups. Each of these business groups uses different strategies and has its own acceptance process. If you also intend to submit a business plan to launch a startup in Canada, you must first familiarize yourself with the types of Canadian investment organizations and choose the right one to obtain the Letter of Support for the startup visa. The investment organizations approved by the Canadian government can be broadly categorized into three groups:

• Angel Investor Groups
• Venture Capital Firms
• Business Incubators

These three groups of investment organizations comprise approximately 69 organizations. Each of these organizations has the capacity to invest in your business plan and can issue the Letter of Support for Canada’s startup visa. However, there is an important difference between these three investment groups. Companies in the angel investor and venture capital groups must invest a cash amount in the proposed startup project. In return, these organizations share in the startup’s equity or profits. In contrast, companies in the incubator group do not need to invest cash in the startup project. This has led to intense competition for attracting the attention of these incubator investors. Despite this, which investment group is the best for obtaining a Letter of Support?

The Best Investment Group for Obtaining a Letter of Support for Canada’s Startup Visa

Choosing one of these three groups to present your business plan and receive the Letter of Support for Canada’s startup visa comes with its own challenges and difficulties. This choice largely depends on the type of business plan and your startup idea. For example, companies in the venture capital group prefer to invest in high-risk startup projects with significant growth potential. This has resulted in a very low success rate for startups to obtain a Letter of Support from this investment group. In contrast, incubator investment groups have the highest success rate in supporting startup ideas. Below, we have outlined the success rate of startups in finalizing their business plan and receiving a Letter of Support based on the type of investment group:

• Only 43% of startups supported by the venture capital investment group were approved by the Canadian Immigration Department.
• 78% of startups supported by the incubator investment group successfully launched their projects in Canada.
• The angel investor group had the highest success rate in startup cases, with 80% success.

What is the Difference Between a Letter of Support and a Commitment Certificate?

After submitting the startup business plan and getting it approved by one of the reputable investment centers, the center must issue both a Letter of Support and a Commitment Certificate. The Letter of Support is sent by this center to the applicant and the Canadian Immigration Department. On the other hand, the Commitment Certificate issued for the entrepreneurial team is sent directly to the Immigration, Refugees, and Citizenship Canada (IRCC). This certificate is valid for 6 months. Therefore, the members of the entrepreneurial team must apply for permanent residency and a work permit in Canada within these 6 months.

Final Words

In this ExpertUP article, we introduced the Letter of Support for Canada’s startup visa. We learned what a Letter of Support is and under what conditions it is issued. We also became familiar with the steps to obtain a Letter of Support or LOS. If you also intend to launch a startup in Canada and immigrate to this country, you must first obtain a Letter of Support. Having a Letter of Support is one of the main requirements for obtaining permanent residency in Canada and launching a startup. The process of obtaining the Letter of Support for Canada’s startup visa has its own sensitivities. If you have an innovative business idea and intend to launch your startup in Canada, it is best to first seek free consultation from ExpertUP experts. As mentioned, several investment groups in Canada can issue the Letter of Support; therefore, it is very important to choose the best investment group for receiving the Letter of Support.