If you travel a lot and are a developer of websites, games, video effects or something like that, then you probably know that startups from this field are welcome in many countries. There are even specially accepted venture capital programs in India, Malaysia, Singapore, Hong Kong, China and other countries.
But, it's one thing to announce a program, and another thing to analyze what was done wrong at the very beginning and, then, constantly improve the results. One of the countries that is constantly improving in the field of attracting start-ups is Canada.
Over the past 10 years, something has been constantly changing for the better here.
Let's take a look at 6 reasons that make Canada stand out from the rest of the world in terms of getting started, getting funding and growing just about any IT start-up.
1. Abundance of start-up capital
Large amount of start-up capital today compared to 10 years ago. In this regard, Toronto today seems to be no worse than San Francisco. The emergence of the Canadian venture capital fund OMERS Ventures in 2011 changed the rules of the game for the entire venture industry in this northern country. Its emergence stimulated the creation of new funds and the arrival of many US investors with large assets to invest in Canadian startups.
The low value of the Canadian dollar has attracted many US venture capital investors. For them, it turns out that you return your investment, plus an additional 40% as a bonus from the exchange rate (i.e. you either take them into account immediately when investing, or later after exiting the project).
Companies that sell their products and services to customers in the US receive similar financial support. This is very beneficial, especially considering the fact that the low exchange rate of the Canadian dollar against the US dollar is the most stable in this currency pair. Exchange rate fluctuations over a long period of time are minimal.
Today, there are several dozen funds, business incubators and individual business angels. Many of them are authorized bodies of the Government of Canada, specifically involved in the selection and further work with startups under a special immigration program called the Startup visa.
It was created specifically to attract foreign IT entrepreneurs to Canada.
The procedure for obtaining the status of a permanent resident of Canada on a Startup visa consists, in fact, of 4 stages:
- passing English on IELTS tests with a level above average (more than 6 points out of 9),
- receiving a letter of support from one of the authorized funds, accelerators or business angels (which happens much less often),
- registration of a company in Canada for you and your partners (it is desirable that one of the partners has Canadian citizenship or permanent residence, but this is not necessary),
- filing and obtaining a Startup visa for all foreign founders of a company with a share of ownership of more than 10%. In addition, under this program, all close members of their families (meaning: children, spouses or parents) can receive visas.
After that, you can easily study in the accelerator and / or develop your project with the funds received at the stage of attracting seed investments. To do this, Canada has every opportunity.
2. Access to government grants and tax credits
Government grants such as Ontario's FedDev and the Industrial Research Assistance Program (IRAP) provide mentoring, entrepreneurship support and funding to help new businesses succeed.
Moreover, there are many government orders that start-ups can receive. For example, for web development, various types of social research, and up to the simple development of a mobile application for the needs of housing and communal services or administration. There are grants and orders for environmental research in the field of environmental protection and cleanup.
In general, this is a whole market that Canadian startups often use.
3. Tax incentives
Companies incorporated in Canada enjoy significant tax benefits.
For example, if you are doing any kind of research and development, then the government support you receive from the SR & ED (Research and Experimental Development) tax credit is much greater than anywhere else in the world. For example, in the same Californian Silicon Valley, there is nothing similar. Accordingly, all start-ups registered in Canada receive a competitive advantage in the field of scientific research and experimental development at the start. As a result, Canadian companies can receive more than 50% of the return on investment invested in R&D.
In addition, social costs for your adaptation and residence in Canada may be deducted from corporate income tax. This means that you, as the founder of the company, will be able to deduct the following costs from corporate profits:
- for your residence in Canada, as well as for all non-working members of your family, as well as for those who will work in your company (for example, your spouse). Accommodation includes the cost of food and housing (meaning either rent or mortgage payments, but not the net purchase of housing),
- on your education, as well as your non-working or minor children,
- for certain types of medical expenses. We are talking about medicines and non-state medicine services. For example, spending on the services of dentists or plastic surgeons.
- The total amount of such expenses cannot exceed 60 thousand CAD per person per year, which is approximately 2.7 million rubles or 225 thousand rubles per month. Not a bad social aid for startups. I doubt that anywhere else there are the same corporate tax preferences for newly organized companies.
4. Access to a large expert base of specialists and technical talents
The universities in Toronto and Waterloo are home to some of the best engineering schools in North America. Leading US technology companies such as Google and Facebook regularly hire alumni and employees from there.
Moreover, a huge infrastructure for the development of startups has been built between these cities, similar to silicon valley in California.
Technological development centers of many large Canadian and US companies have been set up here. Here you can find both expertise and partners for your current or future projects. This is a very favorable environment for building a large IT business. The unicorn company Shopify is proof of this.
Yes, it is always possible for Canadians to leave for the US, because this will not require any special permits or visas. But, many of the talented Canadian experts do not want to do this, and there are many reasons for this.
For example, you can quickly and relatively inexpensively fly from Toronto, Quebec or Vancouver to all major cities in the US, Europe, Asia, for consultations, presentations, attracting specialists or raising the next rounds of funding, as well as attend numerous conferences, forums and exhibitions that are relevant to you. After all, one of the main driving forces of any business project is the connections that its founders and top managers can build.
Canada is a great place to set up a corporate center for your future unicorn.
5. Low cost of living
One of the main reasons why mentors and talent don't move to California is the high cost of living. In Canada, this is much easier. In addition, there are tax incentives for living, which should not be forgotten. In any case, living and building a new business in Canada is much easier and cheaper than in San Francisco.
And when you consider that Canada has huge ports on two oceans, then the advantages associated with international trade, low cost of living and a southern neighbor with the most solvent and largest population in the world turn into a paradise for start-ups. In fact, this means only one thing - if you cannot develop your project here, then you do not have an entrepreneurial spirit, from the word - at all.
6. Stability, healthy lifestyle and entrepreneurial spirit
Canada is a country with a very high level of political and economic stability.
It has one of the highest levels of property rights protection.
You may not be afraid that your company will experience a raider takeover or unreasonable court decisions by law enforcement agencies.
You will not be jailed here for pseudo-entrepreneurial activity, incorrect assessment when exiting a project, or selling shares in a foreign company, as is the case in Russia.
There is no corruption here, even at the level of an ordinary policeman, even at the level of the prime minister. This does not happen in Canada. If you are accustomed to breaking laws, rules and accustomed to βnegotiateβ with government officials, then you will be a little bored here, because. this doesn't happen here. It will not be possible to "negotiate". You will receive exactly what is required by law. This makes a lot of sense and you don't need to resist it if you want to live here and work on your own project. According to the law, life is much easier and faster. In addition, you quickly get used to it, like everything good.
Another feature of Canada is that economic crises are practically not felt here. All this happens in other countries. This is the special charm of this country. In Canada, it is always good and calm.
The majority of the population leads a healthy lifestyle and engages in all kinds of available sports. There is something to do here. From sea fishing for tuna to freeride on glaciers. There are a lot of tourist opportunities for hunters and fishermen. It is no coincidence that tourism is one of the most developed areas of activity in Canada and annually attracts millions of visitors from all over the world.
- Everything here is permeated with respect for entrepreneurs, taxpayers and citizens. You will never meet here with the manifestation of nationalism or xenophobia. And despite the fact that almost all of Canada consists of immigrants.
- There is a very high degree of tolerance here.
- You can be here, practically, anyone, if you do not break the law and do not interfere with the lives of other citizens.
Canada is a wonderful country for creating and growing businesses, children and a decent life in old age.
Source: habr.com