Can International Students Legally Start a Business in Canada?

International students can indeed start a business in Canada, but the path involves understanding immigration and business regulations. A study permit, issued by Immigration, Refugees and Citizenship Canada (IRCC), allows you to study at a Designated Learning Institution (DLI), such as the University of Toronto or Seneca College. However, it also sets strict conditions on work, including running your own business, which is considered “working off-campus” by IRCC. Violating these rules can lead to serious consequences, like losing your study permit or facing removal from Canada. The good news? With the right permits and planning, you can legally launch a venture, from a tech startup to a freelance graphic design service, while balancing your studies.

This guide will walk you through the entire process of starting a business in Canada.

What Is a Study Permit and Its Work Limitations?

A study permit is a document issued by IRCC that allows international students to study at approved Canadian institutions. It often includes conditions about working while studying. 

For example, you can work off-campus, such as running your own business without a separate work permit if you meet specific criteria. 

These rules ensure you prioritize your education while exploring entrepreneurial opportunities.

Key Eligibility Requirements for Working Off-Campus

To work off-campus, including on your own business, you must meet these IRCC requirements:

• Be a full-time student at a DLI, such as a university or college listed on Canada’s official DLI list.
• Be enrolled in a post-secondary academic, vocational, or professional program (or a secondary vocational program in Quebec) that lasts at least six months and leads to a degree, diploma, or certificate.
• Have started your studies; you cannot work before your program begins.
• Hold a valid Social Insurance Number (SIN), obtainable from Service Canada for tax and employment purposes.

During the academic year, you’re limited to 24 hours of work per week, including time spent on your business activities, like designing a website or meeting clients. During scheduled breaks, such as summer or winter holidays, you can work full-time with no hour cap. 

Tracking your hours is extremely important, as IRCC may request proof to ensure compliance. For example, a student running a small catering service must log time spent cooking or delivering orders to stay within the 24-hour limit.

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Types of Work Permits for Business Ownership

Post-Graduation Work Permit (PGWP)

After completing your studies, a Post-Graduation Work Permit (PGWP) offers flexibility to start or grow a business. Issued by IRCC, the PGWP allows you to work anywhere in Canada for up to three years, depending on your program’s length. 

For instance, a graduate from McGill University with a two-year diploma can apply for a PGWP and launch a tech consulting firm without work-hour restrictions. Eligibility requires completing a program at a DLI and applying within 180 days of graduation.

Co-op Work Permit

If your program includes a mandatory co-op or internship, a co-op work permit lets you gain work experience, which can include testing a business idea. 

For example, Algonquin College provides an entrepreneurship co-op program to its students to launch their business ideas with the support and expertise of the Entrepreneurship Centre. 

Please check your college’s program structure for specific details. 

Note that this permit is tied to your program requirements and doesn’t authorize full-time business operations outside of your placement.

Not Sure if your college provides the service? Book a Consultation with Aayam Services to find out which college best suits your needs! 

Start-Up Visa and C11 Work Permit

For international students with ambitious business plans, Canada offers options like the Start-Up Visa, which can lead to permanent residency. This path requires support from a designated organization such as a venture capital firm or incubator. 

Alternatively, the C11 Work Permit supports entrepreneurs with a strong business proposal. Both routes require careful planning and are best navigated with guidance from an RCIC.

Step-by-Step Guide to Starting a Business in Canada

Step 1: Confirm Your Eligibility to Work

Before launching your business, verify that your study permit allows off-campus work. 

Check your permit’s conditions on the IRCC portal or consult an RCIC to avoid missteps.

Working beyond your allowed hours, even on your own business, can put your study status at risk.

Step 2: Choose the Right Business Structure

Selecting a business structure impacts taxes, liability, and registration. Common ptions include:

• Sole Proprietorship: Simplest and most common for students, like running a freelance writing service. You’re personally liable for debts, and registration is straightforward via ServiceOntario or similar provincial services.
• Partnership: Involves two or more people sharing ownership, suitable for collaborative ventures. Liability is shared but still personal.
• Corporation: A separate legal entity offering liability protection but requiring more paperwork and costs. Ideal for scaling businesses, like a tech startup aiming for investment.

Step 3: Register Your Business

Register your business with your province or territory, such as ServiceOntario for Ontario-based students. This provides a 9-digit Business Number (BN) from the Canada Revenue Agency (CRA) for tax purposes. If your business earns over CAD $30,000 annually, register for a Goods and Services Tax/Harmonized Sales Tax (GST/HST) account with the CRA. 

Step 4: Organize Funding and Manage Finances

Funding a business as a student can be challenging but achievable. Students mostly rely on:

• Personal Savings: Using your own funds, like savings from part-time jobs, to start small.
• Grants and Competitions: Programs like Futurpreneur Canada offer grants for young entrepreneurs, often accessible to students.
• Investors: Pitching to angel investors or incubators, like the University of Waterloo’s Velocity program or DMZ program from Toronto Metropolitan University, for larger ventures.

Open a separate business bank account to track expenses, as mixing personal and business finances can complicate taxes. 

Step 5: Comply with Tax and Legal Obligations

As a business owner, you must file taxes with the CRA, reporting business income on your personal tax return for sole proprietorships. If registered for GST/HST, collect and remit taxes on sales. Consult the CRA’s small business resources or an RCIC to ensure compliance. 

Why Work with a Regulated Canadian Immigration Consultant (RCIC)?

A Regulated Canadian Immigration Consultant (RCIC), licensed by the College of Immigration and Citizenship Consultants (CICC), helps you navigate IRCC’s complex rules. From ensuring your study permit allows business activities to exploring pathways like the Start-Up Visa, an RCIC provides tailored advice. 

For example, an RCIC can review your business plan to confirm it meets C11 Work Permit criteria, saving time and reducing rejection risks.

Here’s Your Guide to Choose the Best Immigration Consultant Near You!

Opportunities and Challenges for Student Entrepreneurs

Popular Business Ideas for International Students

International students can explore flexible, low-cost businesses that align with study permit restrictions:

• Online Businesses: E-commerce stores or freelance services that require minimal startup costs.
• Consulting: Leverage skills, such as language tutoring or tech consulting, to offer services part-time.
• Construction and Trades: Niche opportunities, like equipment leasing for construction firms, suit students with industry experience, as seen in Canada’s booming construction sector.

Common Challenges 

• Work Hour Restrictions: The 24-hour weekly limit during school terms can strain business operations. Plan tasks efficiently, focusing on high-impact activities like marketing during breaks.
• Funding Access: Without a Canadian credit history, loans are tough for students. 
• Legal Complexity: Canada’s legal landscape can be confusing for newcomers. An RCIC or mentor from a Small Business Enterprise Centre can help to clarify rules.

FAQs: Starting a Business as an International Student

Can I Start a Business with Only a Study Permit?

Yes, but only if you meet IRCC’s off-campus work criteria, like being a full-time student at a DLI. You’re limited to 24 hours per week during school terms, and a valid SIN is required.

How Many Hours Can I Work on My Business During School?

You can work up to 24 hours per week on your business during academic terms, tracked as time earning wages or performing services. Full-time work is allowed during breaks.

Do I Need an Immigration Consultant to Start a Business?

While not mandatory, an RCIC ensures compliance with IRCC rules and can explore advanced permits like the C11 or Start-Up Visa, streamlining your process.

What Are the Best Business Structures for Students?

Sole proprietorship is the simplest option for students with low setup costs but personal liability. Corporations offer protection but require more administration if you plan to scale.

How Can a Start-Up Visa Help My Business?

The Start-Up Visa offers permanent residency for innovative businesses backed by a designated organization. It’s ideal for students planning to scale, like launching a tech startup.

Conclusion: Launching Your Canadian Business Dream

Starting a business as an international student in Canada is an exciting journey with the right knowledge and careful planning. By confirming your study permit eligibility, choosing the right business structure, and complying with CRA and IRCC regulations, you can build something meaningful and sustainable. Working with a trusted RCIC, like Aayam Immigration Services, simplifies the process, letting you focus on turning your vision into reality. 

Whether you’re selling handmade goods, offering tutoring services, or building the next big app, Canada offers a fertile ground for your entrepreneurial ambitions. Take the first step—and shape your future today.