As a booming hub for technological innovation, Canada has an exciting and dynamic IT and AI industry that is ripe for foreign companies to explore. With its vibrant tech ecosystem, Canada has long been one of the world’s leading destinations for IT and AI businesses looking to invest in new markets.
If you’re a foreign IT company considering relocating to Canada, here are some guidelines you should take note of:
- Canadian IT and AI markets
Firstly, it’s important to understand the characteristics of the Canadian IT and AI industries. Canada has a robust and highly educated workforce, which makes it a natural destination for technology investment. Toronto, Vancouver, and Montreal are just a few of the cities that have large tech hubs, offering a wealth of skilled talent across areas such as artificial intelligence, cybersecurity, and software development. In particular, Canada’s focus on AI innovation has created an exciting ecosystem of startups and established companies that are consistently pushing the boundaries of AI research and development.
- Steps to make
To successfully establish a presence in the Canadian market, there are several steps you should take. Start with market research, seeking information on Canada’s legal, regulatory, and tax environments. Consider hiring a local law firm, accounting firm, or consulting firm to help you navigate this process. Moreover, it’s crucial to establish relationships with key local players, such as suppliers, partners, and customers. Finally, register your business and jumpstart any necessary permits and certifications to operate in the Canadian market.
- Strategies to obtain financing
Like in any market, securing financing is crucial for success in the Canadian IT market. However, financing in Canada may differ from what you are used to. Canadian banks are less likely to extend credit lines to foreign businesses, requiring the right financial background checks and be far easier if you have a pre-registered business in the country.
In light of this, consider other funding options, such as accelerators, angel investors, venture capitalists, or government grants:
Angel investors are high net worth individuals who provide financial support to companies in their early stages of development. In Canada, there are several angel investor groups that may be interested in investing in foreign IT companies, such as Panache Ventures, Anges Quebec, the Canadian Angel Investment Network and Angel One Investor Network. These investors can be an excellent source of capital and guidance for foreign IT companies, and may also be able to introduce you to other investors or potential customers.
Venture capitalists are companies that provide funding and mentorship to startups with high-growth potential. Some well-known venture capitalists in Canada that foreign IT companies can pursue include iNovia Capital, BDC Capital, Real Ventures, Version One Ventures, and OMERS Ventures. However, it is essential to note that venture capitalists typically require a significant amount of equity in exchange for their funding, so be prepared to give up some control over your business if you choose this option.
Accelerators are programs that provide mentorship, networking opportunities, and funding to startups. There are many accelerators in Canada that are focused on technology and innovation, such as FounderFuel, Real Ventures, Creative Destruction Lab and Communitech.
In Canada, there are several government grants and funding programs available for startups, including those in the IT sector. For instance, the Industrial Research Assistance Program (IRAP) provides financial support to small and medium-sized companies engaged in research and development activities.
- Government incentives
The Canadian government recognizes the importance of the IT industry to the national economy, offering a range of incentives to encourage foreign companies to participate. These include subsidies, tax credits, and grants to businesses that invest in research and development. As such, the Quebec Ministry of Economy and Innovation offers several grants and tax credits for businesses that specialize in research and development in specific areas, including information technology.
Additionally, in recent years, the Canadian government has launched a number of programs aimed at attracting international talent to the country’s technology sector. One such program is the Global Talent Stream, which is aimed at expedited access to highly skilled global talent to accelerate the growth of innovative firms. The program provides a streamlined pathway for employers who require unique, highly skilled and specialized talent to obtain a Labour Market Impact Assessment within 10 business days. This can include foreign IT professionals with specific skills and experience that are in demand in the Canadian market.
Other initiatives include Start-up Visa and the Canada-Global Skills Strategy. The former is targeted at entrepreneurs who want to establish their start-up companies in Canada and the latter helps employers to recruit top international talent for highly skilled occupations. Both programs aim to facilitate the growth of international businesses in Canada and make it easier for businesses to access global talent
- Support from provincial organizations
At the provincial level, there are several organizations you should consider joining to help establish your presence in the Canadian IT market. These organizations offer networking and partnership opportunities, as well as access to resources such as talent and funding. Some examples include ICUBE at the University of Toronto Mississauga, Innovate BC in British Columbia, and Invest Ottawa.
ICUBE offers a 12-week accelerator program designed to cultivate and nurture the brightest innovators in the tech space. Participants receive mentorship, coaching, and access to a network of investors and industry experts. Through this program, foreign IT companies can tap into the wealth of resources available to them and take advantage of the supportive ecosystem. ICUBE’s goal is to ensure that the most promising startups have the support they need to thrive.
Innovate BC, on the other hand, has a portfolio of programs and initiatives to help provide funding for foreign IT companies. Their main focus is investing in early-stage technology companies working in various sectors such as digital health, enterprise, and cleantech. Innovate BC offers programs such as the Ignite Program, which provides up to $300,000 in funding and the Venture Acceleration Program that offers up to two years of funding and support.
Invest Ottawa features numerous funding opportunities, including the Goal Graduate Scholarship, the Capital Angel Network, and the Angel Investor Tax Credit, that foreign IT companies can explore. Invest Ottawa’s accelerator program offers a wide variety of services, such as access to capital, strategic partnerships, and mentorship support. These resources can help IT startups secure investment, develop strategic partnerships, and navigate the complex funding landscape.
- Partnerships with local educational institutions and research centres
Partnerships with local educational institutions and research centres can be an effective entry strategy. These institutions have a wealth of expertise in key areas such as machine learning, AI, and cybersecurity, and can provide you with access to a pool of talented professionals who can help your company build new products and services that will give you an edge in global competition.
So, what are some of the educational and research centres you should consider partnering with in Quebec, for example? Here are a few of the top options:
Polytechnique Montréal: This engineering school is one of the most highly regarded in Canada and offers a range of programs in areas like computer engineering and software engineering. In addition to teaching students, Polytechnique also conducts cutting-edge research in areas such as AI and cybersecurity, making it an ideal partner for any IT company looking to tap into these fields.
École de technologie supérieure (ÉTS): ÉTS is another Montreal-based engineering school with a strong reputation for innovation and applied research. With a focus on industry partnerships, ÉTS is an ideal partner for IT companies looking to collaborate on projects related to fields like software engineering, AI, and big data.
McGill University: Although best known for its work in the life sciences and humanities, McGill also boasts a strong computer science program that has produced a host of successful alumni. In addition to teaching, McGill also conducts world-class research in areas like AI, big data, and cybersecurity, making it an attractive partner for IT companies in search of expertise in these fields.
Université de Sherbrooke: Located in Three Rivers, Université de Sherbrooke is another top-ranked Canadian university with a strong focus on research and innovation. Particularly noteworthy is the university’s work in virtual reality and artificial intelligence, two areas that are increasingly in demand among IT companies looking to develop cutting-edge products and services.
As IT companies from across the world look to push the boundaries in the field of artificial intelligence (AI), institutions like the Alberta Machine Intelligence Institute (Amii), Quebec Artificial Intelligence Institute (Mila), and Vector Institute for Artificial Intelligence have become increasingly important sources of financing. These organizations are at the forefront of cutting-edge AI research and have established themselves as key players in the global AI landscape.
For foreign IT companies looking to obtain funds from Amii, Mila, or the Vector Institute, there are various routes that can be taken. Firstly, these institutions often offer research grants, which are intended to fund specific AI-related projects. These grants can be used to cover the costs of research equipment, software, personnel, and other associated expenses.
Another popular financing avenue involves collaborative partnerships with these institutions. By partnering with Amii, Mila, or the Vector Institute, foreign IT companies can access specialized expertise, infrastructure, data, and other valuable resources. This can help companies accelerate their AI development and bring innovative products to market faster.
Additionally, Amii, Mila, and the Vector Institute are also home to a wide pool of talented AI professionals, who can provide invaluable mentorship and guidance to foreign companies. With a shared focus on advancing AI, these institutions are committed to helping IT companies succeed and are willing to invest resources and expertise into their growth.
Finally, Amii, Mila, and the Vector Institute all offer a variety of education and training programs. These programs can help IT companies enhance their AI capabilities, improve their research methodologies, and stay on top of the latest AI trends and innovations. By participating in these programs, foreign IT companies can gain critical knowledge and skills that can help them secure future financing from these institutions.
By partnering with one or more of these educational and research centers in Quebec or other provinces, you can gain access to a wealth of talent and expertise in key IT fields. From there, you can collaborate on projects, develop new products and services, and take your company to the forefront of global competition.
- Success stories
Finally, it can be helpful to learn from the experiences of successful foreign IT companies that have already established themselves in Canada. Take time to research and explore success stories from brands and small and mid-size companies alike. They can present innovative ideas that have worked well in Canada’s unique business landscape.
The Israel-based company, Stratasys Ltd., is a leading manufacturer of 3D printers and additive manufacturing systems. With a focus on providing high-quality, precise printing solutions, Stratasys entered the Canadian market by establishing partnerships with local distributors. The company’s main strategy was to work closely with Canadian companies to offer tailored 3D printing solutions that meet the needs of the local market. Stratasys’ unique specialization and emphasis on innovation and quality has made them a popular choice for Canadian companies looking for cutting-edge additive manufacturing technologies.
The French company, Vistaprint, is an American-owned printing company that offers a wide range of print and digital products. With a focus on providing affordable digital and print marketing solutions, Vistaprint entered the Canadian market through acquisitions of local printing companies. The company’s strategy involved leveraging the existing customer base of these acquired businesses to expand reach and enhance customer acquisition. Vistaprint has gained a reputation for offering affordable and efficient marketing solutions, which has helped them establish a strong foothold in the Canadian market.
The Indian company, Wipro Limited, is a leading provider of IT services and consulting, with a focus on digital transformation services. Wipro entered the Canadian market through partnerships with leading Canadian IT organisations, such as the Canadian subsidiary of IBM. Wipro’s strategy was to leverage these partnerships to offer end-to-end digital transformation solutions to Canadian clients. Wipro’s unique specialisation and extensive experience in digital transformation has allowed them to make significant contributions to Canadian businesses, particularly in the healthcare and financial sectors.
In conclusion, relocating to Canada can be a fantastic opportunity for foreign IT companies looking to expand their global presence. By following these guidelines, you can position yourself to take full advantage of all this dynamic industry has to offer.