Top 6 challenges faced by Canada’s new immigrant entrepreneurs

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Last Updated On 20 February 2025, 8:52 AM EST (Toronto Time)

Canada has long been a land of opportunity, attracting dreamers and doers from around the globe.

Among them are newcomer entrepreneurs—immigrants who’ve been in the country for less than a decade—whose ambition fuels over 7% of Canada’s enterprises.

Yet, beneath their inspiring success stories lie unique hurdles that threaten their growth and integration into the nation’s vibrant business community.

A new report from the Canadian Federation of Independent Business (CFIB), From Challenges to Opportunities: The Newcomer Entrepreneurial Experience in Canada, sponsored by Scotiabank, shines a spotlight on these struggles.

Drawing from the real-life experiences of 14 immigrant business owners across Canada, the report identifies six key challenges that newcomer entrepreneurs face—and offers a roadmap for turning obstacles into opportunities.

In this article, we’ll dive deep into these challenges, explore their impact, and unpack actionable solutions for policymakers, financial institutions, and aspiring immigrant entrepreneurs.

Whether you’re a newcomer dreaming of launching a business in Canada or simply curious about the economic forces shaping the country, here’s what you need to know about the toughest barriers standing in the way of Canada’s newest business trailblazers.

For many newcomer entrepreneurs, funding a business in Canada feels like navigating a labyrinth with no map.

The CFIB report reveals that nearly all participants relied heavily on personal savings to kickstart their ventures, a trend that mirrors broader patterns among both immigrant and Canadian-born business owners. But why is external capital so elusive?

The Credit Catch

Building a credit history is a cornerstone of securing loans or financing in Canada, yet newcomers often arrive with no Canadian financial track record.

Traditional credit assessments ignore foreign financial histories, leaving immigrants at a disadvantage.

Temporary residents face even steeper hurdles, with limited funding options tied to their immigration status.

One entrepreneur noted that even when credit was available, the rates and limits offered by banks rarely met the needs of a fledgling business.

Grants and Assistance: Out of Reach

Government grants and financial assistance programs could be a lifeline, but many newcomers find them inaccessible.

Eligibility often favors established businesses, and immigration status can further complicate qualification.

The application process itself is a time-consuming slog, described by participants as a frustrating maze of paperwork and unclear guidelines.

Digital Barriers

In an era of online banking, newcomers are stuck with outdated processes. Many financial services still require in-person visits or phone calls, eating into precious time and resources.

One entrepreneur shared their frustration: despite submitting a pre-arrival application, they still had to visit a branch to finalize their account setup.

Opportunities for Change

There’s hope on the horizon. Programs like Scotiabank’s StartRight offer tailored solutions, such as credit cards without credit history requirements and flexible financing.

Yet, the report calls for more—personalized financial advice, mentorship from immigrant advisors, and streamlined pre-arrival banking services could unlock new pathways to success for Canada’s immigrant business owners.

Canada’s regulatory landscape is a double-edged sword for newcomer entrepreneurs.

While some, like business registration, find it straightforward compared to their home countries, others stumble over complex sector-specific permits, labour laws, and tax compliance.

Business Setup Struggles

Setting up a business involves securing a Canadian Revenue Agency business number, opening tax accounts, and meeting banking requirements—tasks that pile on complexity for those unfamiliar with the system.

Choosing a business structure, such as incorporation, adds another layer of confusion.

Incorporation might unlock better funding options but can limit access to certain grants, leaving newcomers unsure of the best path forward.

Permits and Licensing

Obtaining permits and ensuring compliance often requires in-person visits to government offices, draining time and money.

While Canada’s regulations are seen as clearer than those in many immigrants’ countries of origin, the process still feels overwhelming for resource-strapped entrepreneurs.

Labor Laws and Taxes

Hiring employees brings its own challenges. Newcomers struggle to grasp labor laws, employee benefits, and payroll obligations, often turning to costly experts for help.

Tax compliance is equally daunting, with no centralized hub of information to guide them.

One entrepreneur described switching accountants multiple times just to get clear answers, a trial-and-error approach that saps both finances and morale.

A Path Forward

Simplifying compliance with plain language, centralizing resources, and improving government customer service could ease these burdens, giving newcomer entrepreneurs a fighting chance to thrive.

In Canada’s tight-knit business community, credibility is king—but for newcomers, earning it is an uphill battle.

Without local references or established networks, breaking into the scene relies heavily on personal referrals.

The CFIB report highlights how this slow process can stall growth, leaving immigrant entrepreneurs on the outside looking in.

Building a network from scratch is no small feat. Many turn to their cultural communities for support, which offers a lifeline but can limit broader engagement.

As one entrepreneur put it, “Your network is your net worth”—a reminder that connections are currency in Canada’s business world.

Solutions on the Table

Mentorship programs pairing newcomers with seasoned Canadian entrepreneurs could bridge this gap.

Financial institutions and local organizations could also play a role by hosting networking events tailored to immigrants, helping them build trust and credibility faster.

Adjusting to Canadian business norms is a steep learning curve for many newcomers. Language barriers and subtle communication differences complicate everything from client negotiations to supplier relationships.

The report notes that while cultural communities provide stability, over-reliance on them can hinder integration into the wider market.

For example, an entrepreneur from a fast-paced business culture might find Canada’s cautious approach jarring.

Bridging this gap requires time, patience, and a willingness to adapt—qualities that newcomer entrepreneurs often possess in spades but need support to refine.

A Collaborative Fix

Business accelerators and settlement agencies could offer workshops on Canadian business etiquette, while hiring local employees might bring fresh perspectives to help newcomers align with market expectations.

Canada boasts a wealth of business resources, but for newcomers, finding them is like searching for a needle in a haystack.

The CFIB report reveals a critical lack of centralized guidance tailored to immigrants, leaving many unaware of support programs around taxes, business structures, and funding.

This knowledge gap leads to costly mistakes and missed opportunities.

One entrepreneur lamented being left to “figure things out on their own,” a sentiment echoed across the study.

Without clear signposts, newcomers feel disadvantaged in a system that assumes prior knowledge they simply don’t have.

Closing the Gap

A centralized online platform aggregating regulatory info, grant details, and startup resources could be a game-changer.

Promoting existing programs more aggressively—through multilingual campaigns, for instance—would also ensure newcomers know where to turn.

Canada’s business culture can feel like a culture shock for newcomer entrepreneurs accustomed to rapid-fire decision-making.

The CFIB report describes it as risk-averse, with slower processes and a cautious approach that clashes with the dynamic environments many immigrants hail from.

This conservatism can stifle innovation and growth, especially for those eager to hit the ground running.

Adapting requires a mindset shift—embracing patience while finding ways to inject their unique energy into the market.

Leveraging local mentors and hiring Canadian staff familiar with the culture can help newcomers strike a balance, blending their bold ideas with Canada’s steady pace.

Despite these challenges, the report brims with stories of resilience and triumph. Newcomer entrepreneurs emphasize mindset, preparation, and community as keys to success.

“Canada believed in me, and that empowered me to believe in myself,” one participant shared—a testament to the transformative power of self-confidence.

Practical advice abounds: focus on quality customer service, research the market thoroughly, and build a robust network.

“Take your time,” one entrepreneur urged, stressing that strategic preparation trumps rushed decisions.

Others highlighted the value of local support networks, from accelerators to informal peer groups, as vital stepping stones.

Mentorship emerged as a recurring theme. Finding advisors—whether through banks, business organizations, or personal outreach—offers newcomers a lifeline to navigate Canada’s complexities.

“There are great mentors out there, but you have to find them,” one participant noted.

Newcomer entrepreneurs are a vital thread in Canada’s economic fabric, yet their potential remains untapped without stronger support systems.

The CFIB report closes with bold recommendations for policymakers and financial institutions:

For Policymakers: Promote government programs more widely, centralize resources, simplify compliance, expand immigration options like an Express Entry stream for entrepreneurs, and bolster settlement agencies.
For Financial Institutions: Clarify business structures, expand mentorship, streamline capital access, tailor financial guidance, and simplify pre-arrival banking.

These steps could transform Canada into a true launchpad for immigrant business owners, enriching the economy and inspiring the next generation of entrepreneurs.

As Canada’s population grows more diverse, the success of newcomer entrepreneurs will shape the nation’s future.

Their challenges—financial, regulatory, cultural—are not insurmountable, but they demand attention.

By addressing these hurdles head-on, Canada can foster an environment where immigrant ambition thrives, driving innovation and prosperity for all.

For aspiring newcomer entrepreneurs, the message is clear: the journey is tough but rewarding.

With resilience, strategic planning, and the right support, the Canadian dream is within reach.

As one entrepreneur put it, “We’re all figuring it out along the way—there’s a sense of high-fives all around.” Isn’t it time we gave them more reasons to celebrate?

Gagandeep Kaur Sekhon

Gagandeep Kaur Sekhon moved to Canada in 2010 on a study visa. She navigated through the ups and downs of her student life and gained her permanent residency in 2015. Today, she is a proud Canadian citizen residing in Calgary, Alberta. She is mother of 2 beautiful daughters and making her difference through writing and guidance at INC – Immigration News Canada.