Business Opportunities For International Students In Canada

Canada is known for its welcoming attitude towards international students and its vibrant entrepreneurial ecosystem. International students in Canada are allowed to start their own businesses, but there are some important considerations and steps to take. Firstly, it is crucial to understand the eligibility requirements to work in Canada as an international student, even if it is for self-employment. Working for yourself is recognised as ''working off-campus'' by the Government of Canada, and you can only start working off-campus after starting your study program. International students can work off-campus for themselves or an employer without a work permit if they are a full-time student at a designated learning institution (DLI). During regular school/semesters, self-employed students are allowed to work on their business for up to 24 hours a week, and they must track their own hours. There are various business structures to choose from, including sole proprietorship, partnership, and corporation, each with its own legal and financial implications. To register your business, you will need a 9-digit Ontario Business Identification Number (BIN) from Service Ontario. Additionally, you must understand your tax obligations, which include registering for a Business Number (BN) with the Canada Revenue Agency (CRA) and potentially charging Goods and Services Tax (GST)/Harmonized Sales Tax (HST).

International students can start a business in Canada

Secondly, international students must ensure they have the proper permits and authorizations in place. While a study permit may allow for some employment opportunities, it typically does not grant the right to operate a business. Therefore, students might need to apply for a work permit, such as a Post-Graduation Work Permit (PGWP) or a co-op work permit, to run their business legally. Additionally, understanding the legal requirements, such as business incorporation, setting up a business account, and tax rules, is crucial. During school semesters, students can work up to 20 to 24 hours per week on their business, and they can work full-time during school breaks.

To increase the chances of success, international students should seek mentorship and networking opportunities to learn from experienced entrepreneurs and make valuable connections. Creating a solid business plan is also vital for securing funding, making informed decisions, and staying on track. This plan should be well-researched and specific to the Canadian market, as the same industry can look very different in Canada compared to other countries.

There are also programs available to support international student entrepreneurs, such as TBDC's Ontario Soft Landing Program, which helps immigrant entrepreneurs relocate and grow their startups in Ontario, Canada. By providing selected startups with a Letter of Support, the program assists them in applying for a Work Permit and Permanent Residency. International students can also explore various funding sources, including personal savings and loans and grants specifically designed for international students and entrepreneurs.

Work permits and study permits

International students can start a business in Canada, but they must follow certain rules and obtain the necessary permits. The first step is to obtain a study permit, which allows international students to work on or off-campus for a specified number of hours per week. However, starting a business is not typically covered under the standard work conditions of a study permit, so additional authorization, such as a work permit, may be required to run a business legally.

Study Permits

Study permits are the first step for international students looking to work in Canada. These permits allow students to work on or off-campus, but the number of hours they can work per week is restricted. As of November 8, 2024, students can work off-campus up to 24 hours per week without a work permit, as long as they meet other requirements, such as being a full-time student at a designated learning institution (DLI). Working more than 24 hours per week is a violation of the study permit conditions and can result in losing student status and future permit approvals.

Work Permits

While a study permit enables international students to work, it does not explicitly grant them the right to operate a business. Therefore, a work permit is typically required in addition to the study permit. International students may need a Post-Graduation Work Permit (PGWP) or a co-op work permit. The PGWP allows graduates to work and start a business anywhere in Canada, while the co-op work permit offers flexibility if the student's program includes a co-op component.

Business Structures

When starting a business in Canada, international students have several business structure options, including sole proprietorship, partnership, and corporation. Each structure has its own legal and financial implications, so it is important to choose one that suits the business's needs. Sole proprietorship is the simplest form of ownership but does not provide liability protection. A partnership involves two or more people sharing ownership and liabilities, while a corporation is a separate legal entity that offers limited liability protection but requires more administration.

Additional Considerations

International students should also be aware of other important considerations when starting a business in Canada. They should understand the legal and financial aspects of running a business, including business incorporation, setting up a business account, and tax rules. Additionally, creating a solid business plan is crucial for securing funding, making informed decisions, and staying on track. Networking and seeking mentorship from experienced entrepreneurs can provide valuable connections and advice.

Business structures and registration

As an international student in Canada, you can start a business while studying, but there are specific guidelines, regulations, and restrictions you must follow.

Business Structures

There are three types of business structures in Canada:

• Sole Proprietorship: This is the simplest and most common business structure for new entrepreneurs in Canada. It is a business owned and operated by one person and is relatively easy to start. As an international student, you can operate as a sole proprietorship as long as you comply with your study permit's work restrictions.
• Partnership: This involves two or more people sharing ownership and liabilities.
• Corporation: A corporation is a separate legal entity that provides limited liability protection. It is more complex and requires more administration. As of March 29, 2004, non-residents are permitted to own a corporation in British Columbia, which offers the most flexibility for non-Canadian business owners. However, to conduct business anywhere in Canada, you must be federally incorporated, and some provinces require residency.

Registration

Once you have chosen your business structure and obtained the necessary permits, you will need to register your business with the appropriate authorities. This typically involves registering with your provincial or territorial government, depending on the type and scope of your business. If you operate under a name other than your own, you must file for a business name registration. Depending on your business type, you may need specific licenses or permits, such as a contractor's license for a construction business. Ensure you check with local authorities to understand the requirements for your specific business.

Additionally, you must keep your business finances separate from your personal finances by opening a business bank account and maintaining thorough records of all transactions. As an international student, you may need to apply for a Canadian Business Number (BN) from the Canada Revenue Agency (CRA) for tax purposes. You will also need to submit a tax return, and if you generate more than $30,000 in annual revenue, you must register for an HST number.

Funding sources for international students

As an international student in Canada, you have several funding options to finance your education. Here are some sources you can explore:

Scholarships and Grants

Scholarships and grants are monetary awards offered by institutions, organisations, governments, or individuals to support international students in financing their education. These awards are typically based on academic merit, athletic achievement, philanthropy, or excellence in the arts. Scholarships and grants do not need to be repaid and can be one-time or recurring annual payments.

Many Canadian universities offer scholarships for international students, such as the University of Toronto, which covers the full cost of tuition, books, residence, and incidentals for the entire course. The University of British Columbia also has the International Scholars Program, which offers scholarships based on merit and financial need.

You can use scholarship search tools, such as the one provided by InternationalStudent.com, to explore awards offered by Canadian governments, foreign governments, non-governmental organisations, and international organisations. The Canadian government's website also features international scholarships, including the Study in Canada Scholarships, which provide short-term exchange opportunities for students from Asia, Europe, the Middle East, North and Sub-Saharan Africa.

Student Loans

The Canadian government offers the Canada Student Loan program, which provides loans with the same terms, including interest rates, as those available to permanent Canadian residents. However, eligibility for these loans may vary depending on provincial law.

Lines of Credit

A line of credit is a flexible loan option that allows you to borrow money up to a pre-set limit and only pay interest on the amount you borrow. This can be a good choice if you need financial flexibility but are unsure if you require a large loan.

Personal Savings and Proof of Finances

Before applying for a study permit in Canada, you will need to demonstrate proof of finances. This includes showing funds that cover the cost of education and living expenses. The minimum financial requirement is C$10,000 per year, in addition to your tuition fees. This amount may vary depending on the province and the number of family members accompanying you.

Entrance Scholarships and Bursaries

Many educational institutions offer entrance scholarships and bursaries for international students. These awards are typically based on academic achievement or are specifically designated for international students. Check the websites of your desired universities to explore these opportunities.

Country-Specific Exchange Programs

Canada has various country-specific exchange programs that offer scholarships to international students. For example, the Canada-China Scholars' Exchange Program provides scholarships for short-term study, research, or language training in participating institutions in China.

By exploring these funding sources and planning your finances carefully, you can take a significant step towards achieving your educational goals in Canada.

Networking and mentorship opportunities

Networking Tips:

• Start early: Begin networking as soon as you start your studies in Canada. Your domestic classmates may have existing networks of schoolmates, alumni, and teachers, so it's important to catch up and build your own network.
• Reach out to your existing connections: Your first step should be to connect with people you already know in Canada, such as family members, friends, or alumni from your previous school. Don't underestimate the power of your current classmates as part of your network as well.
• Attend networking events: Make it a point to attend career fairs, industry events, and workshops related to your field. These provide excellent opportunities to meet entrepreneurs, professionals, and potential mentors in your industry.
• Join mentorship programs: Seek out mentorship programs specifically designed for international students, like the International Student Mentorship Program. These programs offer guidance, support, and cultural understanding, easing your transition into the Canadian business landscape.
• Connect with fellow international students: Networking with other international students can provide you with a support system of individuals facing similar challenges. They can offer valuable insights and share their experiences of navigating the Canadian job market and business culture.
• Leverage online platforms: Utilize online platforms like LinkedIn to connect with professionals, join industry groups, and stay updated on networking events and opportunities.

Mentorship Opportunities:

• TBDC's Ontario Soft Landing Program: This 9-month startup incubation program assists immigrant entrepreneurs in relocating and growing their businesses in Ontario. It provides access to workshops, training, and mentorship, along with support for work permits and permanent residency applications.
• TBDC's Land & Expand Program: This intensive 3-week program is designed for international and first-generation immigrant founders looking to expand their startups in Ontario. It offers tools, mentorship, and access to a network of entrepreneurs who have successfully scaled their businesses in North America and worldwide.
• University mentorship programs: Many universities in Canada, such as the University of Toronto Mississauga (UTM), offer International Student Mentorship Programs. These programs pair incoming international students with upper-year mentors, providing guidance on academics, campus life, and cultural adjustment.
• Industry-specific mentorship programs: Look for mentorship opportunities within your chosen industry. For example, programs like Mitacs Accelerate offer mentorship for international students in research-focused roles, providing connections with industry professionals and potential future employers.

Remember, networking and mentorship are vital tools to help you navigate the Canadian business landscape as an international student. They will enable you to gain valuable insights, make meaningful connections, and ultimately, increase your chances of success in launching and growing your business in Canada.

Frequently asked questions