If a foreign national wishes to engage in business management in Japan, it is necessary to obtain a Business Manager Visa. There are various criteria such as investment funds, office space, and employees. Also, there are many points to consider when a foreign national who does not have a registered address or bank account in Japan prepares to start a new business.
The main approval criteria for status of residence; Business Manager
a. The amount of capital is five million yen or more, or employing two or more full-time employees (Japanese citizens, holders of residency status permanent residents, or Long-term residents) residing in Japan.
b. The existence of a business office or premise is secured.
Regarding (a) above, most applicants typically prepare for an application with a capital of 5 million yen. If the business plan involves hiring two or more full-time employees who are Japanese nationals, permanent residents, or Long-term Residents in Japan, the required capital may be less than 5 million yen.
Typical Procedure Flow and Points to Note
Creating a Business Plan (including an employment plan)
First, you carefully consider and decide on the type of business you want to pursue in Japan. Once you have made your decision, you conduct market research and develop a detailed business plan for the first year.
If you have never visited Japan before, typically, it is advisable to make a short-term visit for purposes such as market research.
In drafting the business plan, it is essential to create a detailed document. This includes thoroughly examining the reasons for establishing the business, potential clients, plans for hiring employees, financial projections based on income and expenses, and profit/loss calculations, among other factors.
The submitted business plan will undergo examination by the immigration office. They will assess whether the proposed business has prospects, stability, and continuity, as well as whether the applicant can be considered the actual controller of the company, and whether it meets various criteria under immigration laws and regulations.
There is a lot of misinformation regarding employees, but it's important to note that having two Japanese or permanent resident employees is not a must-have requirement. As long as at least 5 million yen of business funds are invested, regardless of nationality, the necessary personnel can be employed. Some common misconduct cases involve situations where an individual is listed as the representative director of the company on paper, but it can be inferred that the actual controller is someone else. There may also be doubts about the business plan or uncertainties regarding the investment capital.
Preparation and transfer of investment funds
The 5 million yen of capital money can be comprised of personal funds, loans, or shared investments from multiple parties.
However, it is necessary that the formation process of the capital can be explained thoroughly.
It is common for foreign individuals not to have a bank account in Japan. In such cases, finding someone who holds an account in Japan and entrusting them with receiving the transfer is a common way.
Moreover, for international transfers, both the sender and the recipient are required by financial institutions to provide documentation verifying the purpose of the transfer. Some countries may have restrictions or challenges regarding international transfers, so it's important to carefully consider your transfer plan.
Securing an Office
Once the Japanese counterpart has received the funds, the next step involves securing an office space. For industries requiring establishments such as restaurants or retail stores, it is necessary to secure the premises as well.
If it's a rental property, you would entrust the Japanese counterpart to handle the contract signing process.
Regarding the office, it is required to be an independent office, and shared offices without separate sections are not accepted. Also, when setting up an office at home, it may not be recognized as an office if the living area and office space lack independence due to the layout, arrangement, and division between the two areas.
Company establishment procedures, application for business permits, etc.
It is also possible to run a business as a sole proprietorship. However, here we will focus on the procedures for operating a business as a company.
Once the company office is secured, the procedures for company incorporation will be initiated. Once the company incorporation is completed, businesses requiring operational permits and approvals will proceed with those procedures. (For example, application for restaurant operation permit, antique dealer license, industrial waste disposal permit, registration for cryptocurrency exchange, etc.)
Application for the status of residence; Business Manager
If the foreign individual is outside Japan, they will apply for a Certificate of Eligibility for "Business Manager" from the local immigration office responsible for the location of the company's registered office.
Once the Certificate of Eligibility is issued, it will be sent to the foreign individual via international mail. If the individual is already in Japan, they can apply for a change in residency status to engage in company management. If approved, they will be permitted to conduct business operations.
Application for a visa at overseas diplomatic missions (Japanese embassy or consulate)
The individual who has received the certificate should submit their passport, Certificate of Eligibility, and any other required documents to the overseas diplomatic mission (Japanese embassy or consulate) for visa application. Once the appropriate visa is issued by the diplomatic mission, the individual should make preparations for their arrival in Japan and undergo an immigration inspection at a Japanese airport upon arrival.
Entry into Japan and Starting a Business
Upon receiving the landing permission stamp (seal) on their passport from the immigration officer, the individual can enter the country and commence their business activities. Within 14 days of arrival, it is necessary to decide where to live and register with the municipal office of the designated city, town, or village for residency.
Key Points
- During actual immigration examinations, having the required investment funds and documentation does not guarantee approval.
The examination includes assessing the continuity and stability of the business plan, the substantiation of investment fund formation, the independence of the business premises, the status of market research, the potential of business partners, employment plan, compliance with the criteria for the status of residence “Business Manager”, the presence of grounds for denial of entry, and the individual's past residency and deportation history. After a comprehensive assessment, the decision is made regarding approval by the Immigration Office. - In principle, only one individual per company is granted the status of residence "Business Manager." However, depending on the size of the company, roles and responsibilities, and shareholding ratios, multiple individuals may be granted the status of residence "Business Manager.”
- If the company representative plans to bring their family (spouse, children) to Japan, it is necessary to plan and prepare for this from the start.
We offer methods to expedite the process of bringing your family members together as soon as possible. - It is important to consider whether the foreign individual you intend to employ can obtain the necessary status of residence.
- After establishing the company, it is necessary to enroll in social insurance schemes such as health insurance and welfare pensions. Additionally, it is usually required to enroll in labor insurance, which includes workers' accident compensation insurance and employment insurance.
- The company is required to file annual tax returns with the tax office.
- The duration of stay for the status of residence "Business Manager" is typically granted for 1 year, 3 years, or 5 years.
During the extension process of the period of stay, the status of the company's management is one of the crucial factors subject to examination.
If management is not being carried out effectively or if there is a situation of over-indebtedness leading to operational difficulties, the extension of the visa may not be approved.
It is not uncommon for individuals to be denied the grant of the status of residence "Business Manager". Reasons for this could include:
- Doubts about the credibility of the business plan
- Considered that the business does not have prospects for stability and continuity.
- Unable to respond when additional document requests are made by immigration during the examination process
- Doubts about whether the individual is the actual manager of the business.
- The office does not meet the requirements and is not recognized as suitable.
- There is a history of unfavorable residency records in the past.
- The business plan exceeds the scope of activities permitted under the status of residence "Business Manager".
Thus, it is important to examine the investment funds, business plans, etc. It is also crucial that the evidence and supporting documents should be collected and organized meticulously and attentively.
When preparing documents such as the statement of reasons for the application and business plan, it is important to structure them based on factual information and from the perspective of adequacy to obtain approval.
At our office, we propose the best strategies based on the applicants' backgrounds and business plans.
