Start-Up Visa Canada: Top PR Refusal Reasons from Real Cases (What to Avoid)

Startup Visa Canada is changing quietly under everyone’s radar without the IRCC publicly announcing anything yet. In this article and video we will be uncovering the top reasons for SUV PR refusals from 2023 until 2025.

The Most Common Refusal Reasons for Startup Visa (SUV) PR applicants:

1) Artificial transactions: On the balance of probabilities, that the primary purpose of the essential applicants in entering the commitment with the designated entity Empowered startups ltd is for the purpose of acquiring a status or privilege under the Act and described under R89(b) of IRPR. Therefore, applicant is not a member of the Start-up Business Class as per R98.01(2)(a).

2) Misrepresentation: The applicants or dependents have not truthfully included all their current and past information on the immigration forms (i.e. immigration past refusals, applications, other residencies and citizenships, military service, education, professional work experience, travel history, etc.)

3) Essential members being refused hence by default all members of the Startup Visa group are refused: Another applicant in respect to the same business as yours (identified as essential to the business in the commitment) has been refused a permanent resident visa. Therefore, you have not met the requirements of subsection 98.01(2), as described in subsection 98.08(2) of IRPR. You are therefore not a member of the Start-up Business Class, and your application for permanent residence in Canada is refused.

We have outlined the most recent cases for the Startup Visa PR refusals in the table in the article below with a summary of each case and the reason for refusal.

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Startup Visa PR Refusal Cases from Canadian Federal courts in 2023, 2024, and 2025

We have outlined 3 SUV PR refusal cases in 2025 below in more detail:

This first case is  Le v. Canada (Citizenship and Immigration), 2025 FC 499, (https://canlii.ca/t/kb2t4 ) which was a refused SUV application based on the fact that the officer was not convinced regarding the activities and efforts of the startup business. The link and key officer comments have been included here  for your reference.

Artificial transactions
89 For the purposes of this Division, an applicant in the self-employed persons class or an applicant in the start-up business class is not considered to have met the applicable requirements of this Division if the fulfillment of those requirements is based on one or more transactions that were entered into primarily for the purpose of acquiring a status or privilege under the Act rather than

(a) in the case of an applicant in the self-employed class, for the purpose of self-employment; and

(b) in the case of an applicant in the start-up business class, for the purpose of engaging in the business activity for which a commitment referred to in paragraph 98.01(2)(a) was intended.

The officer found the following problems with the Startup business and stated in their refusal reasons and explanation that “Given the minimal growth of the start-up business over the long period since the application. Moreover, in their business plan, the company's reasoning for their value proposition was not compelling and lacked validation. For instance, all projection and numbers in financial statements are doubtful and are not supported by logical reasoning or proof. Upon reviewing the document received on January 04th, 2023, many attendances to designated entity events and researches are done but no changes into business status. I am not satisfied that the members are contributing significantly in their new business in Canada.”
The officer continued to question the Startup business by stating that “Consequently, I remain concerned by what appears to be a lack of seriousness on the part of the essential applicants. I am therefore satisfied, on the balance of probabilities, that the primary purpose of the essential applicants in entering the commitment with the designated entity Empowered startups ltd is for the purpose of acquiring a status or privilege under the Act and described under R89(b) of IRPR. Therefore, applicant is not a member of the Start-up Business Class as per R98.01(2)(a).”

The next case that is also related to a Startup Visa PR refusal was Neri v. Canada (Citizenship and Immigration), 2025 FC 1087 (https://canlii.ca/t/kcwlp). The officer used a  typical explanation for the refusal regarding the genuineness of the Startup business; “….the officer found that pursuant to subsection 89(b) of the Immigration and Refugee Protection Regulations, SOR/2002-227 [IRPR], he was satisfied that the primary purpose of the Applicant’s start-up business venture had been to acquire residency status under the IRPA, rather than to legitimately engage in the business activity. Per that section of the regulations, such an ‘artificial transaction’ prevents the Applicant from meeting the applicable requirements to qualify as a member of the start-up business class.”

“I am satisfied on a balance of probabilities that your primary purpose for entering into the commitment with the [designated entity], Empowered Startups Ltd., is for the purpose of acquiring a status or privilege under the Act, as described under ss. 89(b) of IRPR.”
“The Officer also noted that while the Applicant was asked to provide contact details of individuals whom he had hired or with whom he proposed to work to realize his business, the contact details then provided by the Applicant were either not in service, did not connect to the individuals in question, or were inoperative website links.”

Another recent case, which involved both a refused Startup Visa work permit and subsequent PR, is Rezaie v. Canada (Citizenship and Immigration), 2025 FC 662  (https://canlii.ca/t/kbhxq). The Officer’s GCMS notes state regarding the refusal outlined the following key points:

“The company was incorporated in May 2022. Client has not provided the proof of the company operation viability such as the company bank statements, financial statements and operations accounts to demonstrate transactions that occurred.

Client submitted a personal RBC account that shows a balance of $17,926.36, which is less than the minimum money required for family size (only client in this case).

Client has not provided proof of investment they already put towards the business. No evidence of investment funds received or that these funds are transferrable, available and unencumbered.”

The Top 5 most important factors to plan for a successful PR application under the Canada Startup Visa program:

1. Avoid paper-based Startups with no real investment plan inside Canada
2. Demand clear paper trail of investments funneled through the Startup businesses’ Canadian bank account
3. Actual investment inside Canada for the new startup business
4. Real Canadian partners to help with your startup business to gain traction, such as equity partners or joint venture partners is always a bonus
5. Avoid outsourcing everything to overseas

Top 5 Misconceptions and mistakes that many Startup Visa (SUV) applicants make in 2025:

1. Applying for a work permit and not staying inside Canada for at least 6 months per year. The biggest mistake is thinking that they can come and settle their families and return to their current country of residence to continue to work in their high paying job – without the need to spend more time in Canada. The SUV work permit is not intended to settle the family of the co-founders of the Startup on their own, it’s intended to have the Startup co-founders and applicants come and spend more time inside Canada than they do overseas. Keep in mind that the Startup Visa open work permit is optional and not mandatory under the SUV program. Applicants with a valid Letter of Support can apply for their PR to Canada and then the optional work permit without any expiry date – but they have to become an essential member on the commitment certificate issued by the Designated Organization (i.e. Letter of Support).

2. Venture Capital or Angel Investor sponsored Startup businesses and their cofounders would be prioritized and processed in 1 year for their PR applications by the IRCC? This is the farthest thing from the truth. All priority designated organizations are prioritized whether they are a VC or Angel Investor group or government backed incubator. BUT none of them are processed in 1 year. This is impossible as of 2025-2026. The actual processing time for Startup Visa PR processing under the ‘Priority’ category is 3 to 3.5 years. There is no differentiation by the IRCC between these 3 types of designated organizations if they are all categorized as Priority on the Canadian Startup Visa government website

3. The main applicants under the Startup Visa program entering Canada on a 3-year open work permit need to reside or settle in the same city or province as their Designated Organization which issued the Letter of Support. There are no IRCC regulations which restrict co-founders in residing or working in different provinces from their designated organization. The only restriction is that the applicants and their families should not plan or intend to settle in the province of Quebec – which is not part of the Federal SUV program. Case in point is that there is actually a designated organization in Montreal, Quebec which is part of the Startup Visa program and all it’s Startup applicants have to plan to reside OUTISDE of Quebec when entering Canada – and not staying in Quebec where the designated organization is located. Hence, there are not geographic ties between the Letter of Support and the main applicants who want to enter Canada with a work permit under the Startup Visa program.

4. An essential applicant under the Startup Visa program can have their spouse apply for another PR program in Canada, and it would not affect the rest of the co-founders in the Startup group. This is 100% incorrect. If an essential member in the group, or the spouse of an essential member receives their Canadian PR before the Startup Visa PR is processed, the whole group is refused by default because that essential member’s PR application will be withdrawn automatically by the IRCC as one applicant or family cannot have 2 concurrent PR applications under process

5. If a Startup Visa applicant enters Canada with the optional 3-years open work permit they cannot invest in a side business or work for other employers. This is not true. As of end of 2024, the IRCC announced Startup Visa essential applicants can receive open work permits, which means that the applicant can work for any business in Canada, even their own, or part-time or full-time for other employers while they are involved with their own startup business. An open work permit has no restrictions except working in legal occupations (not blacklisted ones),and also adhering to any regulated occupations or industries which require further medical and background checks such as healthcare and working with minors.

What are the realistic timelines now for the Startup Visa?

As of July 9th 2025, IRCC’s website has updated the Startup Visa PR processing time at 51 months (i.e. 4 years and 3 months). This is the average processing time in 2025, however it is skewed because of the following reasons:

a) IRCC has not processed any PR cases since January 2025 until July. This temporary ‘pause’ has caused the IRCC processing time algorithm to increase the average time for SUV.

b) The average IRCC processing time for Startup Visa PR does not consider or differentiate priority vs non-priority. Hence it can be concluded that non-priority could even be longer than 5 years if the IRCC website is considering averaging out the two.

The real processing time for the Startup Visa PR is 3.5 years for priority designated organizations and more than 5 years for non-priority category designated organizations.

The AOR (or Acknowledgment of Receipt) which is when the main applicants receive their PR file numbers from the IRCC can take anywhere from 2 months to 18 months. It’s a bit scary of how wide this gap is but this is the reality of Canada’s Startup Visa program.  Of course, priority designated organizations have their applicants receive the AOR faster than typically the non-priority – which is why such a large gap exists between 2 to 18 months.

Whether you are contemplating applying for Canada’s Startup Visa program by joining an existing startup as an investor, or bringing your own Startup business to Canada, you will need an experienced team to support your immigration application with introductions to the designated organizations. Our staff have been involved with the Startup Visa program since 2016 and our company has been processing them since 2018 (the program itself was incepted in 2013).

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