Dreams on hold: Inside the struggles of entrepreneurs held hostage by Canada’s start-up visa programme

Pandya’s emotional post captured a crisis unfolding across Canada: many Indians had reached the country’s shores, lured by the SUV programme, family in tow, with plans to start up and make it big. They now find themselves stuck, unable to raise funds, unable to travel, and in some cases, unable to stay.

Gaurav Chauhan is a case in point. The co-founder of KonarkPro, a time-tracking platform for employees, and Jellyfish Technologies, a software company, moved to Canada in 2022 under the SUV programme. His co-founder, Amit, remains in India, because his permanent residency (PR) file is still being processed. “When I applied, the processing time was around 18 months," Chauhan says. “By the time I landed, it had crossed 30 months. Now, the tracker says more than 10 years."

Chauhan’s business is profitable. He pays himself a salary, employs 70–80 people in India, and pays taxes in Canada. But his legal status is unstable and he cannot plan beyond a few months. The entrepreneur says his first work permit in Canada expired in June 2023. Renewal requests took months and came back with reduced validity. His wife has been unable to leave Canada for over a year because travelling would risk her immigration status and re-entry. The couple’s children’s study permits are tied to expiring passports and are renewed only with six-month expiry.

To top it all, Chauhan has faced questioning at ports of entry. “It feels like living in a mithiyan jailan (sweet jail)," he says. “You can see everything Canada offers—but you’re constantly waiting for someone to decide if you can stay."

The promise

The SUV programme was launched as a pilot in 2013. Immigration, Refugees and Citizenship Canada (IRCC), the federal department responsible for immigration, says it was created to “attract innovative entrepreneurs who will create jobs and compete globally." It became permanent in 2018, replacing Canada’s old federal entrepreneur programme.

To qualify, entrepreneurs must show they have a business, meet a minimum language requirement, and prove they have enough settlement funds. A single letter of support from a designated venture capital (VC) fund (minimum CAD 200,000 commitment), angel group (CAD 75,000), or admission in an incubator is enough to file for permanent residency (PR).

While waiting for the decision, a founder can apply for a work permit to build their business, and their spouse and dependent children are included in the PR application.

The initiative quickly became a hit, as Canada grants PR up front under the visa, allowing applicants to apply for citizenship after three years of residency—among the quickest naturalization timelines in the Commonwealth. This mix of safety, stability and long-term security has made Canada an appealing choice for budding entrepreneurs, especially from India.

For Indian entrepreneurs, Canada stands out over the US, the UK or Australia because it offers a quicker path to settlement and market access. The country is keen to regain the momentum of earlier years as it seeks to build global companies from the ground up.

Over the last couple of decades, Canada’s startup scene has grown from a few regional tech hubs into a nationally recognized innovation ecosystem supported by strong universities, public research institutions and a series of government incentives. A key driver was the Scientific Research and Experimental Development (SR&ED) initiative, a long-running federal tax-credit programme that reimburses companies part of the money they spend on developing new technology, encouraging early-stage innovation.

The early 2010s saw startups such as Shopify break out, helping position cities such as Toronto, Vancouver, Montreal, Waterloo and Calgary as global tech centres. As incubators and accelerators expanded and programmes such as the Global Skills Strategy and SUV opened doors to international talent, Canada drew in founders looking to test and scale new ideas. VC investment surged during the late 2010s and reached a high during the pandemic-era tech boom, before cooling in 2022-24 alongside global market shifts.

Slowed by success

IRCC data show that interest in the SUV programme has far outpaced its processing capacity. As of October 2025, Canada’s immigration website shows that nearly 43,200 applicants are stuck in the SUV queue.

Nishant Ahlawat entered Canada in 2021 as an entrepreneur under the programme. He now practises immigration law in Toronto. “My background is in law and cybersecurity," he says. He launched a data protection startup in India and wanted to explore North America as a potential market. “I applied in October 2021, and back then the official processing time was only around six months," he says. Ahlawat landed in Canada in September 2022 on a work permit.

“By then, the processing time had already increased to about 24 months, and it kept going up," he says. He eventually received his PR in December 2023. Sometime later, he also got licensed and started practising as an immigration lawyer.

“Speaking as both a former founder and now as a lawyer, I see that while the ecosystem tries to help, founders find it extremely difficult to actually do business here. Many face challenges with sales, building local networks, or even understanding how to scale in the Canadian market," adds Ahlawat. “The bigger problem, though, is structural—Canada brings in entrepreneurs, but doesn’t do enough to help them contribute meaningfully to the economy."

Those applying today face an estimated wait of more than 10 years—up from the 12-18-month timeline advertised when many 2021 applicants filed their paperwork.

The IRCC, in an emailed response, attributes the increase to “available spaces relative to overall targets" under the Immigration Levels Plan, which limits how many economic-class migrants can be admitted each year.

“As a lawyer today, I don’t recommend the Start-up Visa programme to any of my clients. There’s just too much uncertainty. The published timeline of 10 years sends the wrong message—no serious entrepreneur is going to wait a decade for residency," adds Ahlawat.

Families affected

For families such as Chauhan’s, the effects show up in day-to-day life. Their provincial health cards—which are required to access Canada’s public healthcare system—were renewed for only six months instead of the 3-5 years granted to permanent residents and citizens.

Other founders report similar situations. Many say their children, despite studying in Canadian schools for years, are now being classified as international students when they apply to universities because their parents hold temporary permits that do not qualify them for domestic tuition rates.

Pandya’s daughter, for instance, had to discontinue her admission to McMaster University in Hamilton, Ontario, according to his LinkedIn post. The family was told to pay CAD 29,000 in international tuition because of his temporary resident status.

Ahlawat says a recent policy change has added to the challenges. Until recently, the SUV programme granted closed work permits, which tied founders to their own startups. These permits often allowed spouses and children to be treated as “domestic residents" for certain provincial services, including lower university tuition. That has now changed.

“Transitioning from a closed to an open work permit has created new challenges for SUV founders," says Ahlawat. “Many founders who came on closed permits are now seeing their children—who grew up here—being charged international-student fees because of how these permits are classified."

The delays have created a sense of crisis, but not everyone is left in limbo. Carlos Secada, a Peruvian, and founder of artificial intelligence automation company Zagitas, applied for PR in July 2021 and arrived in March 2022. His PR was approved in February 2024.

“Compared to others, I consider myself lucky," he says. Secada’s company has Canadian mid-market clients, won spots in leading incubators such as DMZ (Digital Media Zone) and Accelerator Centre, and is now expanding its AI supply-chain tools across North America.

But even Secada describes the process as “unclear, unstable, and stressful," with unpredictable timelines and heavy administrative demands. “I genuinely think the core idea of the SUV programme is excellent. When it works, it really does open the door for founders to build meaningful companies in Canada," he says.

Sanjeev Verma, a former Canadian diplomat and now a Regulated Canadian immigration consultant (RCIC) for Avandra Immigration Service, says the system is “under strain from a much larger-than-anticipated inventory of [SUV] applications."

“The inventory of outstanding cases has far exceeded the government’s own immigration-level targets," says Verma, describing the 10-year wait as “a pause in active processing" while IRCC decides how to manage the backlog. “Once it’s clear what direction the programme will take and what the transition provisions will be for people already in the system, we’ll have a better idea of what happens next," he says.

Gaming the system

“The biggest problem is the flood of ‘paper businesses’—startups that exist only on paper, created solely to get a letter of support and apply for PR. This is where the system broke down," says Ahlawat. “The designated entities were supposed to vet innovative businesses, but in many cases, they didn’t. IRCC then had no way to tell who was genuine and who wasn’t, so now every application is being scrutinized. The result is a massive backlog.’’

IRCC in its email did not disclose how many such paper businesses exist and has not confirmed any figures on non-genuine cases.

Asked about the rise of paper businesses, Verma says due diligence happens at multiple stages—both when designated incubators screen founders and when IRCC verifies eligibility and admissibility. “It’s not a one-stop issue," he says. “There are several layers of due diligence, and each party has a role in maintaining the integrity of the programme."

In April 2024, Ottawa introduced a cap of 10 letters of support per incubator per year, a move Verma calls “a necessary measure to slow intake and manage the existing backlog."

IRCC says it is investigating allegations of misuse (of the SUV programme) and “recognizes there is more to do to strengthen the integrity of the SUV program." The department confirms that designated incubators found to be violating programme rules could face suspension or revocation.

As part of a technical briefing on 4 November, IRCC released details of the 2026-28 Immigration Levels Plan, which emphasises stabilizing permanent-resident admissions and reducing reliance on temporary residents. While the plan does not outline SUV-specific reforms, the overall tightening of admissions will affect how quickly the SUV backlog is cleared.

Tense bilateral relations

For Indian founders watching these policy shifts, the uncertainty overlaps with a period of diplomatic strain between the two countries after Canada accused Indian operatives of involvement in the 2023 killing of a Sikh person. But by the middle of 2025, the relationship had improved.

Ahlawat says there is no evidence India is being singled out in SUV processing in the wake of the diplomatic fracas. “Applications are treated independently of political relations at an institutional level," he says. However, he acknowledged that the reduction of Canadian staff in India amid the tensions may have impacted processing times.

In October, Canadian foreign minister Anita Anand travelled to New Delhi to help “restore stability in the relationship," as a joint statement put it. This diplomatic outreach does not directly address the SUV backlog, but it forms the backdrop against which many Indian founders are reassessing their future.

As Ottawa prepares its next immigration-levels plan, the fate of the SUV programme will hinge on whether it can clear the backlog—and convince entrepreneurs that its promise of opportunity still holds. Verma remains optimistic: “I’ll always advocate for Canada. It’s one of the best countries in the world to live and build a business," he says. “Canada still offers unmatched infrastructure, talent, and research support for startups."

Gaurav Chauhan, however, is not so sure. Like Maulik Pandya, he is preparing to take a hard decision. “By next summer, if nothing moves, we may leave Canada," he says. “Maybe Europe. Maybe Dubai. I can’t keep my family in this mental trauma."