Contents
1. Introduction: Starting a Business in Japan as a Foreigner
Starting a business in Japan as a foreigner can be an exciting and rewarding challenge, but it requires careful planning and understanding of the country’s legal framework. To legally operate a business in Japan, foreign nationals must obtain the appropriate visa. In most cases, the “Business Manager Visa” is the primary visa option for entrepreneurs who wish to establish and run a business in Japan.
Japan offers a stable economy, advanced infrastructure, and a well-established legal system, making it an attractive destination for global entrepreneurs. However, the immigration procedures and business regulations may differ significantly from those in other countries. Understanding these processes is crucial to ensuring a smooth transition into the Japanese business environment.
One of the key requirements for obtaining a Business Manager Visa is demonstrating that the business will have sufficient financial backing and a clear operational plan. Typically, applicants must invest at least 5 million yen (approximately 33,000 to 35,000 USD, depending on exchange rates) into their business. This investment can cover expenses such as office rent, initial equipment purchases, and hiring staff.
In addition to the financial investment, applicants must also prepare a detailed business plan, outlining the nature of the business, market research, financial projections, and expected contributions to the Japanese economy. Immigration officers will evaluate whether the business plan is feasible and beneficial to the local economy.
Location is also an important consideration. Entrepreneurs need to secure a physical office space in Japan, as virtual offices or home offices may not be accepted for visa application purposes. This office space serves as proof that the business has a legitimate operational base.
Language barriers can be another challenge for foreign entrepreneurs. While English is widely used in international business, much of the documentation and communication with Japanese government offices will be conducted in Japanese. Hiring a bilingual consultant or legal expert can help navigate these challenges more smoothly.
Overall, starting a business in Japan requires not only capital and a strong business idea but also a thorough understanding of Japanese regulations and cultural expectations. By preparing carefully and seeking professional support when necessary, foreign entrepreneurs can successfully establish their businesses in Japan and contribute to the country’s dynamic and diverse economy.
2. Types of Visas Available for Entrepreneurs
When foreign entrepreneurs plan to start a business in Japan, choosing the correct visa type is a critical first step. The most common and suitable visa for this purpose is the Business Manager Visa, but there are several other visa options depending on the individual’s background, business style, and goals.
1. Business Manager Visa
The Business Manager Visa is designed specifically for those who intend to operate or manage a business in Japan. To qualify, applicants must either invest at least 5 million yen (approximately 33,000 to 35,000 USD) or demonstrate that they will employ at least two full-time employees in Japan. In addition to financial requirements, applicants need to submit a comprehensive business plan, proof of office space, and various other documents. This visa can be issued for periods of 4 months, 1 year, 3 years, or 5 years, depending on the strength of the application.
2. Investor/Business Manager Visa (older term)
Previously known as the Investor/Business Manager Visa, this visa was largely replaced by the Business Manager Visa. However, older documents or consultants may still use the term. It essentially covers the same requirements and is intended for company owners or senior managers responsible for business operations.
3. Startup Visa
Some municipalities in Japan, such as Tokyo, Fukuoka, and Kyoto, offer a Startup Visa to encourage foreign entrepreneurs to establish businesses in their regions. This visa offers a 6-month or 1-year temporary residency period, during which entrepreneurs can set up their business and apply for the regular Business Manager Visa. The advantage of the Startup Visa is that the initial investment requirement (5 million yen) is temporarily waived, allowing entrepreneurs time to prepare funding and secure clients.
4. Highly Skilled Professional Visa
Although not specifically a business visa, the Highly Skilled Professional Visa (HSP) may be an option for entrepreneurs with advanced degrees, significant work experience, or high salaries. This visa comes with a point-based system, and if the entrepreneur qualifies, they can enjoy various benefits such as faster access to permanent residency and permission to engage in multiple business activities. This option works well if the applicant plans to run a business while also working in a specialized field.
5. Other Visa Types (Dependent on Situation)
If the entrepreneur already holds a different visa in Japan, such as a Spouse Visa, Long-Term Resident Visa, or Permanent Resident Visa, they may be able to start a business without applying for a separate Business Manager Visa. However, restrictions may apply depending on the specific visa type, so careful review is necessary.
Selecting the right visa is essential for foreign entrepreneurs to ensure legal compliance and smooth business operations. Consulting with immigration specialists or legal advisors can help entrepreneurs navigate the often complex requirements and choose the most suitable visa for their specific business plans and personal circumstances.
3. Required Documents and Application Process
When applying for a Business Manager Visa to start a business in Japan, foreign entrepreneurs must prepare a wide range of documents and follow a structured application process. Understanding the required paperwork and steps involved is crucial to increasing the chances of a successful application.
1. Business Plan
The business plan is one of the most important documents for visa approval. It should clearly explain the type of business, the business model, target market, financial projections, and how the business will contribute to the Japanese economy. Immigration officials will evaluate the feasibility and sustainability of the plan.
2. Proof of Investment
Applicants must show that they have invested at least 5 million yen (approximately 33,000 to 35,000 USD) into the business. This can be demonstrated through bank statements, contracts for purchasing equipment, or proof of payment for office rent. If the business hires at least two full-time employees, this requirement may be adjusted.
3. Office Lease Agreement
Having a physical office in Japan is mandatory. A copy of the office lease contract, specifying the business name and usage for commercial purposes, must be submitted. Virtual offices are generally not accepted.
4. Company Registration Documents
The company must be legally registered with the appropriate authorities in Japan. Documents such as the Certificate of Company Registration and Articles of Incorporation are required. This process usually takes a few weeks and involves submitting paperwork to the Legal Affairs Bureau.
5. Tax-Related Documents
Proof of registration with the tax office is also required. This includes documents related to corporate tax, consumption tax, and payroll tax if employees are hired.
6. Personal Identification and Visa History
Applicants need to submit a valid passport, residence card (if already in Japan), and documents that show their immigration history, such as past visas or landing permissions.
7. Employment Contracts (if hiring staff)
If the business plans to hire employees, copies of their employment contracts and proof of their enrollment in social insurance programs should be provided. This demonstrates the company’s commitment to contributing to Japan’s labor market.
8. Other Supporting Documents
Depending on the nature of the business, additional documents such as supplier contracts, partnership agreements, or licenses may be required. For example, businesses in the food industry may need a health and safety permit.
Application Process
The visa application process typically follows these steps:
- Prepare all required documents and ensure the business is legally registered.
- Submit the visa application to the Immigration Services Agency of Japan. This can be done by the applicant directly or through a certified immigration lawyer (行政書士).
- The immigration office will review the documents and may request additional information or clarifications.
- If approved, the applicant receives a Certificate of Eligibility (COE), which is required to obtain the actual visa.
- If the applicant is outside Japan, they submit the COE to a Japanese embassy or consulate in their home country to receive the visa. If already in Japan, they apply for a status change directly at the immigration office.
- Once the visa is issued, the applicant can legally manage and operate the business in Japan.
The entire process can take several months, depending on the complexity of the application and the completeness of the documents submitted. To improve the chances of success, many applicants choose to work with bilingual specialists who have experience in business visa applications.
4. Important Points to Consider Before Applying
Before applying for a Business Manager Visa to start a business in Japan, there are several important points that foreign entrepreneurs should carefully consider. Understanding these factors in advance can significantly improve the chances of success and help avoid unnecessary delays or rejections.
1. Minimum Investment Requirement
One of the key requirements for a Business Manager Visa is demonstrating an investment of at least 5 million yen (approximately 33,000 to 35,000 USD). This investment must be made directly into the business and used for expenses such as office rent, equipment, initial stock, or hiring employees. It is crucial to document how this money is spent, as immigration officials will closely review financial records.
2. Physical Office Requirement
The business must have a physical office space in Japan, and this office must be properly zoned for commercial use. Virtual offices and residential addresses are typically not accepted for business visa applications. Entrepreneurs should select an office location that suits the nature of their business and provides clear proof that business activities can legally take place there.
3. Business Plan Quality
The business plan is one of the most important documents in the application process. It should not only explain the business concept but also provide detailed information about the market analysis, target customers, competitors, and financial projections. Immigration officials will carefully examine whether the plan is realistic, profitable, and beneficial to the Japanese economy.
4. Industry-Specific Regulations
Certain industries in Japan are heavily regulated. For example, food businesses, medical clinics, and import/export companies must obtain additional licenses and permits before starting operations. Entrepreneurs should thoroughly research any industry-specific legal requirements to avoid problems after receiving the visa.
5. Language Barrier
Most documents submitted to Japanese immigration must be written in Japanese, and communication with government offices will also take place in Japanese. Entrepreneurs who are not fluent in Japanese should hire a bilingual administrative scrivener (行政書士) or immigration lawyer to assist with document preparation and communication.
6. Financial Records and Tax Compliance
Even after receiving a visa, entrepreneurs are required to maintain accurate financial records and comply with Japanese tax laws. This includes corporate tax, consumption tax, and payroll taxes if the company hires employees. Failure to comply with tax regulations can affect future visa renewals.
7. Timing and Processing Period
The entire application process, from company registration to visa issuance, can take several months. Entrepreneurs should plan their timeline carefully, especially if they need to relocate from abroad or secure business contracts quickly. Rushing the process or submitting incomplete documents could result in rejection or significant delays.
8. Personal Immigration History
Applicants with a history of visa violations, overstays, or other immigration issues may face stricter scrutiny during the application process. It is important to disclose any such history honestly and provide explanations if necessary.
9. Support from Local Government Programs
Certain municipalities in Japan offer special support programs for foreign entrepreneurs, including assistance with startup visas, subsidized office space, and business matching services. Taking advantage of these programs can provide valuable support during the initial stages of business establishment.
10. Visa Renewal and Business Performance
After receiving the Business Manager Visa, entrepreneurs must ensure that their business operates successfully to qualify for future visa renewals. Immigration authorities will check financial statements, tax payments, and business activities during the renewal process. A company that shows little actual business activity or fails to generate income may risk visa cancellation.
By thoroughly preparing for these important points and seeking professional advice when needed, foreign entrepreneurs can improve their chances of successfully obtaining and maintaining their Business Manager Visa in Japan.
5. After Receiving Your Business Manager Visa
Once you successfully obtain your Business Manager Visa, your journey as an entrepreneur in Japan officially begins. However, receiving the visa is just the first step — there are many important responsibilities and ongoing obligations you need to fulfill to ensure your business stays compliant with Japanese regulations and your visa remains valid for future renewals.
1. Register Your Residence and Obtain a Residence Card
If you applied for your visa outside Japan, you will need to enter the country and register your address at your local city hall within 14 days. After this, you will receive your Residence Card, which serves as your official identification in Japan. If you applied within Japan, your new Residence Card will reflect your updated visa status.
2. Open a Business Bank Account
After receiving your visa, it is highly recommended to open a dedicated business bank account in Japan. While some entrepreneurs open an account during the company registration process, some banks may request proof of your valid Business Manager Visa before allowing you to open a corporate account. Having a clear separation between personal and business finances helps with accounting and tax filing.
3. File Necessary Notifications with Tax Authorities
You must notify your local tax office (税務署) about the establishment of your company. This involves submitting forms such as the Notification of Incorporation (法人設立届出書) and selecting your accounting period. You will also need to register for consumption tax if your expected revenue exceeds 10 million yen (approximately 66,000 USD).
4. Maintain Proper Accounting Records
As a business manager, you are responsible for maintaining accurate financial records. This includes bookkeeping for all income, expenses, payroll, and taxes. Hiring a certified tax accountant (税理士) is strongly recommended, especially if you are unfamiliar with Japanese accounting standards and tax laws.
5. Enroll in Social Insurance Programs
If your company hires employees, you must enroll them in Japan’s social insurance programs, including health insurance, pension insurance, employment insurance, and workers’ compensation insurance. Failing to comply with these obligations can lead to legal penalties and problems during visa renewal.
6. Renewing Your Visa
Your initial Business Manager Visa may be granted for 4 months, 1 year, 3 years, or 5 years. To renew the visa, you must show that your business is operating successfully. Immigration authorities will review documents such as financial statements, tax filings, and evidence of ongoing business activities. If the business fails to generate income or ceases operations, renewal may be denied.
7. Compliance with Business and Immigration Laws
Throughout your stay, you must ensure that your business complies with all applicable laws and regulations in Japan. This includes proper licensing if required, accurate tax reporting, and adherence to labor laws. Violations can trigger fines, lawsuits, or even visa revocation.
8. Reporting Changes to Immigration
Any major changes to your business — such as relocating your office, changing your business purpose, or restructuring your company — must be reported to the Immigration Services Agency. Failure to report such changes can negatively impact your immigration status.
9. Building a Strong Business Network
To increase your chances of success, actively participate in local business events, join chambers of commerce, and build relationships with Japanese and international business partners. Many cities have business support centers specifically for foreign entrepreneurs, offering free consultations and networking opportunities.
10. Planning for Long-Term Residency
If you plan to stay in Japan for the long term, consider applying for a Highly Skilled Professional Visa (if eligible) or Permanent Residency after meeting the required number of years in Japan. Managing a successful business can help you qualify for these options.
By staying compliant, maintaining accurate records, and contributing positively to the Japanese economy, you can not only secure your visa renewals but also build a successful and respected business in Japan.
