While foreign entrepreneurs face a protracted immigration battle in the U.S., Canada has forged ahead with a new ‘Startup Visa‘ program.

Canada is not the first country to implement policy to entice foreign entrepreneurs; Australia and Chile have launched similar programs. But if accepted, those who choose to settle in a city like Montreal or Toronto will earn residency immediately, not in a few years.

This also isn’t the first time that the famously friendly country has handpicked groups deemed beneficial to the national economy. The New York Times called its relatively open policy “an experiment in designer immigration.”

Relative to its population, Canada takes more than twice as many legal immigrants as the United States.

“While we sit on our hands, our competitors around the globe are rolling out the red carpet to recruit the most talented individuals away from us,” observed Jeremy Robbins, special counsel in the office of New York Mayor Michael Bloomberg.

Foreign entrepreneurs are in demand, particularly those with engineering skills. Canadian policymakers hopes its new program will support new ventures, stimulate jobs creation, and bolster the region’s claim as a technology hub.

The visa is a pilot program, with an initial annual allotment of 2,750 visas available to entrepreneurs and their families.

Investors as well immigration authorities will vet potential immigrants for the startup visa. Eligible candidates will need to have procured a minimum of $25,000 in angel funding from an approved Canadian investor or $75,000 in venture funding. Entrepreneurs won’t be deported if their business fails.

Meanwhile, in the U.S., foreign entrepreneurs are pushing for a similar startup visa program. They say the current visa system makes it extremely difficult for them to stay here.

One such entrepreneur is Australian-born Josh Rio, who came to the U.S. on a B2 tourist visa, and is now on a B1 business visa. He’s currently working to apply for an L1, an inter-company transfer visa, which requires him to submit over 150 pages of evidence that his company is legitimate.

“Many of the things we do in startups haven’t yet garnered the respect of governments,” he said. “How dare you not have large overhead, HR departments, huge payrolls, and 4-6 weeks of paid holidays?” If Rio is granted his visa, he will need to reapply next year, and the U.S. may deny it even if his company is doing well.

Rio’s story is far from unique; often, foreign-born entrepreneurs are reluctant to tell their story to the press, and this is reinforced by legal advice to stay quiet.

“I didn’t come here for a lifestyle [as] I can have that in Australia. I came here to take advantage of the opportunities this country has, and I am willing to work my ass off for it,” said Rio, who is the founder of a social network called Sceene, and is a former professional skateboarder.

Not every entrepreneur has Rio’s conviction to remain in Silicon Valley — many are already considering the alternatives.

“The U.S. will lose the war for global talent if it does not follow suit and reform the U.S. immigration system to include a visa program for startups and foreign entrepreneurs,” said Susan J. Cohen, resident immigration expert at legal firm Mintz Levin. Cohen is “cautiously optimistic” about immigration reform in the U.S., and she has followed it extremely closely since being involved with implementing the U.S. Immigration Act of 1990.

The federal government began accepting petitions for H-1B visas, and is expected to surpass its annual limit by the end of this week. Only 65,000 visas are available for highly-skilled workers in industries like science, technology and engineering. The Senate is currently closer to an immigration plan that includes a new visa program for low-wage workers, but this would not affect startups.

With such slow-moving reform, should the Bay area’s tech community fear that its brightest minds will be wooed to Canada’s high-tech cluster of innovation, “Silicon Valley North?”

Most of the foreign entrepreneurs in Silicon Valley I spoke with say it’ll be a fallback option. They agree that the Bay Area is still unrivaled when it comes to access to venture capital and support for startups.

LawGives founders Tony Lai and Pieter Gunst

“I can imagine a scenario where a combination of visa issues, a declining runway, and the fortune of having a Canadian investor leads us to this path, but the complexity of moving the entire business over would likely be prohibitive,” said Pieter Gunst, the Belgian cofounder of legal technology startup LawGives.org, which helps lawyers connect with paid and pro bono opportunities. Cofounder Tony Lai is British, and is also battling with visa issues.

Over in Canada, entrepreneurs and investors are excited by the opportunity to highlight the innovation that already exists in the region. Toronto, Waterloo, Montreal, and Vancouver all have strong tech ecosystems and offer advantages, such as a less competitive talent market, local developer talent, tax credits, and universal health care.

“The government is betting that these founders will go to Canada, start a business, hire a whole bunch of people and stay for the long haul,” said Atlee Clark, the executive director of C100, a nonprofit dedicated to supporting Canadian technology entrepreneurship and investment. “Jobs will be a key marker for the government in determining success,” she explained.

For Aron Solomon, an entrepreneur who runs the education innovation arm for Toronto-based MaRs, opportunities abound for more collaboration between the two regions. He suggests that entrepreneurs might relocate to Toronto and other cities, but this won’t prevent them from investment and partnership opportunities in the Bay Area.

To connect the two regions, Canada’s immigration head Jason Kenney will travel to Silicon Valley in May to meet with some of the foreign entrepreneurs who are running out of runway — and more importantly, time.

This is a guest post by entrepreneur Derek Ting

If you’re a software startup, people assume you want to be in Silicon Valley, to be immersed in the hub of high tech; surrounded by other like-minded entrepreneurial spirits; and delighted by the normally mild California weather and scenic Pacific coastline.

But we haven’t, and there are multiple reasons why Canadian startups like us shouldn’t flee — this despite Waterloo’s average December low of minus five degrees Celsius.

The Canadian software startup community is experiencing a renaissance in technology innovation generated by companies such as FreshBooks, HootSuite, TribeHR, BufferBox, Shopify, and more. Growing at a fast rate, these and other Canadian startups are staying put. By doing so, they increase their own chance of business success and help further fuel the Canadian startup scene, and here are the big reasons why:

Reason 1: Access to awesome engineering talent

Canada boasts some of the finest engineering schools in the world, including the University of Waterloo — with the country’s largest engineering faculty — as well as the University of Toronto. Being in close proximity to these schools, startups can recruit the best and brightest engineers from these renowned programs.

Additionally, by establishing internship programs through the universities, startups can build relationships with some of the top students before they’ve even finished their degrees. We’ve been able to recruit some incredible engineers this way, and it feels good to cultivate and mentor Canada’s next generation of engineering talent.

Reason 2: Lower costs and tax advantages deliver more bang for a startup’s buck

Everyone is aware of the high cost of living in the Bay Area, but a recent Coldwell Banker report is still eye opening. Six of the top 10 most expensive housing markets in the U.S. are located in the heart of Silicon Valley, in either the San Francisco or San Jose metropolitan areas. The average cost of a home in these six communities ranges from $1.2 million (San Carlos) to $1.7 million (Los Altos). Did I mention that’s for a four-bedroom/two bath?

In Ontario Canada, the average cost of a home is less than $300,000. With a lower cost of living, startups can be more competitive with salaries yet not spend as much money if they were located in Silicon Valley. However, staying in Canada delivers cost savings that extend much further than real estate.

Consider the tax advantages. Canadian companies enjoy very generous R&D tax credits and refunds. Even if a startup’s business is not yet profitable, the Canadian government will still subsidize some of the engineering costs. Further, despite high personal income tax rates in Canada, corporate tax rates are relatively low, allowing startups to invest profits directly back into the company. Every penny counts when you’re a startup. The ability to reinvest funds is a huge advantage in growing a company.

Reason 3: Thinking outside the box, outside the Silicon Valley bubble

Being outside of the Silicon Valley bubble, there are fewer distractions, and startups can focus on the core technology problem that they’re solving. Rather than continuously worrying about how they can pay the bills to stay in business and keep going for another six to 12 months, startups can focus their creative thinking on market need.

In Canada, the fact that the government pays for healthcare represents a huge asset for startups. Founders can bootstrap their startup without worrying about providing medical care for themselves or their families. Plus, with secured healthcare, it’s much less risky for employees to join a non-funded startup – making it easier to staff up.

By alleviating some of these worries, entrepreneurs can devote their energies to thinking outside the box, developing original solutions that both provide value and fill an unmet need.

O Canada! It all makes sense now, eh?

Derek Ting is the CEO and cofounder of Enflick. Ting holds a degree in Computer Engineering from the University of Waterloo and has a history of entrepreneurship, having founded two web startups while still in high school. He is committed to delivering next generation connectivity technologies that transform how people communicate with each other.

Follow him on Twitter @derekting13

“Big data” startups are experiencing fast-growth and are getting funded on an international scale, a sure sign that it’s more than just a fleeting Silicon Valley trend.

Coveo, the Quebec-based big data analytics company, has received a massive $18 million from local growth equity firm, Tandem Expansion Fund. It is best known for its recently-launched Coveo for Salesforce product, a cloud-based application which delivers quantitative insights about customer interactions. The app works by pushing relevant real-time information to sales and marketing teams, whether its an account, a lead, or new opportunity.

The company will use the funding to build out its sales and marketing team, as it anticipates “hyper-growth” in 2013, according to a press release. It anticipates that it will be “operating at or close to profitability” in 2013.

“”Companies are struggling mightily with big, fragmented data, and are recognizing the need for powerful information access and consolidation technologies like never before,” said Louis Têtu, the company’s Chairman and CEO in a statement.

Coveo is one of a growing number of startups that claim to pull together large volumes of relevant public data from sources like Facebook and Twitter, and information contained within a company’s firewall. The idea is that this data is potentially valuable, and can be used to drive business strategy.

This news comes the week after ClearStoryData pulled in an impressive first round of funding, and Hadoop-based Cloudera nabbed $65 million in its fifth round.

All major existing investors also participated in the round, including BDC Venture Capital, Propulsion Ventures SEC and Fonds de solidarité FTQ. This round of funding brings the company’s total investments to $34.7 million.

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