The Ministry of Justice (MOJ) has announced significant, sweeping changes and provided crucial clarifications regarding the requirements and operational standards for the Business Manager Status of Residence (often referred to as the Investor/Business Manager Visa). These amendments, aimed at ensuring the quality and viability of foreign-owned businesses in Japan, raise the bar for new and existing entrepreneurs.
I. The Five Key New Requirements:
Applicable to New Applications Post-Enforcement
Capital Investment Raised Sixfold
New Requirement:
You must secure ¥30 million JPY (Japanese Yen) or more in capital or investment for your business.
Mandatory Full-Time Employee Requirement
New Requirement:
You must employ at least one full-time staff member who is either a Japanese national or holds an independent residence status (e.g., Permanent Resident).
New Japanese Language Proficiency Requirement
New Requirement:
The applicant or one full-time employee must possess a CEFR B2 level or higher Japanese language ability (e.g., JLPT N2 or higher).
Stricter Experience and Education Standards
New Requirement:
The applicant must meet one of the following criteria:
- Hold a Doctorate, Master’s, or Professional Degree in a relevant field. OR
- Have at least three years of experience in business management or operations.
Mandatory Professional Business Plan Review
New Requirement:
Your submitted business plan must be reviewed and certified by an expert (e.g., SME Management Consultant, Certified Public Accountant) to confirm its viability.
II. Clarifying the “Business Manager” Status:
Operational Guidelines
Beyond the new requirements, the MOJ has issued guidelines to clarify the fundamental criteria for all “Business Manager” activities, emphasizing substance, continuity, and compliance.
1. Definition of “Business Management”
The status requires the foreign national to be substantively involved in the management or operation of the business. This means engaging in activities like making decisions on important business matters, executing business operations, or auditing. Simply being appointed as an officer is not enough.
2. Requirement for a Business Office
The standard for securing a physical office remains strict. The facility must:
| General Requirements | Be used for economic activity conducted under a single management entity in a fixed location. Be continuously engaged in the production or provision of goods/services with people and equipment. |
| Prohibited | Short-term rentals (e.g., monthly leases) or easily disposable spaces (e.g., food stalls) do not qualify. |
| Lease Documentation | The lease agreement must clearly state a business purpose (e.g., office, store) and the contract must be in the name of the operating corporation or entity. |
| Incubator Exception | Temporary use of an Incubation Office (like those supported by JETRO’s IBSC or similar organizations) is permissible, provided a consent-to-use letter is submitted. |
3. Handling Multiple Foreign Co-Managers
If multiple foreign nationals are applying to jointly manage a business, their activities must be justified:
- There must be reasonable justification for multiple foreign managers based on the business scale, workload, and sales.
- The specific duties for each manager must be clearly defined.
- Each manager must receive appropriate compensation for their management duties.
4. Assessing Business Continuity (Renewals)
The assessment of a business’s continuity will look beyond a single year’s results, focusing on the last two fiscal periods (latest and prior).
| Financial Situation | MOJ Decision on Continuity (Renewal) |
|---|---|
| Current Profit/Surplus | Continuity is generally accepted. |
| Deficit/Loss but NOT Debt Overhang (Solvent) | Continuity is generally accepted, provided a 1-year business plan/profit forecast is submitted. Third-party expert evaluation may be requested. |
| Debt Overhang (Insolvent) for less than 1 year | Continuity may be accepted, but requires an expert evaluation (CPA, Consultant) showing a concrete plan to resolve the debt overhang within one year. |
| Debt Overhang for 2+ consecutive years | Continuity is generally not accepted. |
| No Gross Profit (Sales < Cost of Goods) for 2+ consecutive years | Continuity is generally not accepted. |
5. Compliance with Public Obligations
All “Business Manager” visa holders and their businesses must properly fulfill their obligations as operators in Japan:
- Tax Compliance:
All national (Corporate Tax, Income Tax) and local taxes (Residence Tax, Business Tax) must be paid properly. Non-compliance is a negative factor. - Labor & Social Insurance Compliance:
The business must comply with all labor laws and appropriately enroll employees (including part-time) in Labor Insurance and Social Insurance (Health Insurance and Employee Pension) and properly pay premiums. Non-compliance is a negative factor.
III. Transitional Measures: What to Expect
| Application Type | Submission Timeline | Applicable Standard |
|---|---|---|
| New/Pending Application | Before Enforcement Date | Old/Pre-Amendment Standards |
| Renewal (Existing Holders) | Until Oct 16, 2028 (3-year grace period) | Evaluated flexibly; New Standards not strictly mandatory; business viability & future prospects are key. |
| Renewal (Existing Holders) | After Oct 16, 2028 | New Standards are mandatory. |
| Transition from Startup Visa (Item 51) | Startup Visa app submitted Before Enforcement Date | Old/Pre-Amendment Standards for the Business Manager switch. |
| Transition from Startup Visa (Item 51) | Startup Visa app submitted After Enforcement Date | New/Stricter Standards for the Business Manager switch. |
The new standards and clarified guidelines signal a more rigorous era for foreign entrepreneurs in Japan, focusing on well-capitalized, compliant, and genuinely managed businesses.
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