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Japan Business Manager Visa 2025 Changes: Requirements

Nov 10, 2025UP!

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Last updated: November 2025 | Based on [Immigration Services Agency] Guidelines

Introduction: The Importance of the “Business Manager” Status of Residence

Foreign nationals require the “Business Manager” status of residence to start a business or participate in management in Japan. However, the requirements are complex. There are many points that applicants tend to misunderstand, especially regarding the “securing of a place of business,” “judgment of business continuity based on financial status,” and “joint management by multiple foreigners.” This article explains the guidelines published by the Immigration Services Agency of Japan from a practical perspective. It also provides specific case studies and checklists.

Business Office Requirements for “Business Manager” Status (Part 1)

In conclusion, virtual offices and short-term rental spaces are not recognized as business offices. To be recognized as a business office by Immigration, both of the following two conditions must be met, based on the Japan Standard Industrial Classification definitions:

Occupancy of a fixed location: Securing a distinct space by a single business entity.
Continuous business activity: Continuous production or provision of services with personnel and equipment.

❌ Examples of Offices Not Recognized by Immigration

The following formats generally do not meet the requirements for the “Business Manager” status:

Type: Monthly short-term rental space Reason: Does not meet the continuity requirement.

Type: Using a shared office for registration only Reason: No substantial occupancy.

Type: Mobile food stall Reason: Does not meet the fixed location requirement.

Type: Virtual office (address lending only) Reason: Not a physical business office.

✅ Essential Conditions When Using a Rented Property

Clear statement of purpose: The lease agreement must state “for business,” “store,” “office,” etc.
Contractor name: Must be in the name of the corporation or the representative (for sole proprietorships).
Actual use: Proof that business activities are actually being conducted, not just a paper contract.

⭐ Exception: Special Case for Incubator Offices

In the following cases, it may be exceptionally recognized as a business office.

Recognized Cases:

JETRO’s Invest Japan Business Support Center (IBSC)
Entrepreneurship support offices run by local governments or government agencies
Temporary offices provided as part of a formal incubation program

Conditions:

Submission of a “Letter of Consent for Use” from the incubator
Proof that it is a temporary lease for the purpose of supporting entrepreneurship

Practical Advice

If you are considering a shared office to cut costs in the early stages, please sign a contract for substantial use, including a dedicated desk, rather than a “registration only” plan. The screening focuses on whether business activities are actually taking place.

The screening officer will check not only the contract but also photos and floor plans of the office. If it is not a private room, be prepared to show that the space is clearly demarcated by partitions, etc.

“Business Manager” Status and Joint Management (Part 2)

In conclusion, it is possible for multiple foreigners to obtain “Business Manager” visas as joint managers. However, it is a mistake to assume that “joining the board automatically grants a visa.” For all parties to be approved, substantial participation in management and the following three conditions are necessary.

① Rationality: Is the business scale large enough to require multiple managers?

Screening Points:

Scale of business, workload, and sales
The expertise of the duties each officer is responsible for

Specific Examples:

✅ An IT company with a clear separation between a “CTO for technology” and a “COO for sales”
✅ The need to divide store management in a chain restaurant expansion
❌ Three “Representative Directors” for a small business with 5 million JPY in sales

② Clarification of Duties: Are each person’s roles specific?

Required Documents:

Organizational chart and area of responsibility for each officer
Job-sharing regulations
Minutes of board meetings (proof of involvement in decision-making)

NG Patterns:

“Co-representatives” but actual job descriptions are unclear
A nominal officer with no real decision-making authority

③ Payment of Remuneration: Compensation as a manager

Standard:

Monthly remuneration payment to each officer
The amount should be commensurate with the workload and responsibility

Points to Note:

If there is no remuneration or it is extremely low (e.g., less than 100,000 JPY/month), substantial management participation will be questioned
Performance-based pay only (no fixed salary) also risks being judged inappropriate

Case Study: Judgment Example for Co-Founders

AI development startup, capital 10 million JPY, 5 employees

Founder A (US): CEO, technology development & product strategy → 500,000 JPY/month
Founder B (India): CTO, engineering oversight → 500,000 JPY/month

Judgment: There is a clear division of roles (technology and management), and remuneration is appropriate. → ✅ High probability of approval for both individuals.

“Business Manager” Status Renewal and Financial Status (Part 3)

Yes, it is entirely possible to have your “Business Manager” visa renewed even with a financial loss. “Loss = immediate rejection” is not the case. Immigration comprehensively judges the prospect of business continuity by looking at the financial statements for the last two fiscal periods.

📊 Judgment Flowchart

Is there a gross profit in either of the last two periods? │ ├─ YES → Go to [Pattern A Group] │ └─ NO → [Pattern B] No gross profit for 2 consecutive periods └→ Rejection in principle (exceptions for startups)

[Pattern A-1] No deficit (accumulated loss) at the end of the most recent period

✅ Renewable Cases

There is a net profit for the current period and a surplus.
Even with a net loss in the current period, a surplus remains (no deficit has occurred).

Required Documents: Only the standard financial statements

Example:

Previous Period: Net profit 5M JPY, Surplus 10M JPY
Current Period: Net loss 2M JPY, Surplus 8M JPY
→ ✅ No problem (There is gross profit, and no deficit has occurred)

[Pattern A-2] There is a deficit at the end of the most recent period

(i) Not insolvent (negative net worth)

Judgment: In principle, continuity is recognized.

Additional Documents:

Business plan for the next year
Projected income statement

Note: Depending on the content, an evaluation report from a Small and Medium Enterprise Consultant (SME) or Certified Public Accountant (CPA) may be requested.

(ii) Insolvent, but was not insolvent 1 year ago

Judgment: Continuity is recognized under certain conditions.

Mandatory Documents:

Evaluation report from an SME Consultant or CPA
- Must include a “prospect of resolving insolvency within 1 year”
- Must state the basis for the evaluation

Example:

End of Previous Period: Assets 100M JPY, Liabilities 80M JPY (Net Assets 20M JPY)
End of Current Period: Assets 80M JPY, Liabilities 90M JPY (Net Assets -10M JPY)
→ Possible if the evaluation report confirms “improvement within 1 year due to recovery of capital investment” ✅

(iii) Insolvent for 2 consecutive periods

Principle: No continuity → ❌Renewal impossible

Exception: Special case for startups (within 5 years of establishment)

Submitting the following three sets of documents may lead to a flexible judgment:

Expert Evaluation Report (SME Consultant/CPA)
- Including a prospect for improvement within 1 year
Proof of Funding
- Investment contract from VC/Angel investors
- Bank loan agreement
- Grant award notice from public funds like NEDO/JST
- *If cash on hand is sufficient, documents showing this situation
Proof of Efforts Toward Growth
- Product development milestone achievement status
- Customer acquisition records (contracts, LOI, etc.)
- Patent applications / technology evaluation documents

Success Story: Biotech company (3rd year), 2 consecutive periods of insolvency (cumulative -50M JPY)

Completed 300M JPY funding from VC
Successful preclinical trials for new drug candidate
Joint research agreement with major pharmaceutical company
→ ✅ “Reasonable grounds” recognized, high chance of renewal

[Pattern B] No gross profit for 2 consecutive periods

Principle: No continuity → ❌Renewal impossible

Reason: Judged as not earning from the core business (= not functioning as a company).

Exception: Special case for startups

Flexible judgment possible by submitting the same “three-document set” as Pattern A-2(iii).

Typical Examples:

AI R&D company pre-product (zero sales)
University venture in clinical trial phase

💡 Key Practical Point: Understanding the Terminology

Let’s accurately understand the terms used in the screening.

Gross Profit: Net Sales − Cost of Goods Sold
Surplus: Capital Surplus + Retained Earnings (including legal reserves)
Deficit: Accumulated Loss / Deficit carryforward
Insolvency (Negative Net Worth): Liabilities > Assets (Net assets are negative on the balance sheet)
Definition of “Most Recent Period”: The latest fiscal period for which financial statements are finalized at the time of application. If applying immediately after closing, it assumes accounting audits and shareholder meeting approval are complete.

“Business Manager” Status and Compliance (Part 4)

The screening for the “Business Manager” status strictly examines not only the financial situation but also legal compliance as a business operator.

✅ Tax-Related Checklist

Corporate tax / Income tax paid
Consumption tax paid
Withholding tax paid
Resident tax / Enterprise tax paid

⚠️ Special Caution:

Heavy penalty tax for fraudulent consumption tax refund → Extremely negative evaluation (almost certain rejection)
Large or long-term non-payment → Risk of rejection regardless of criminal penalties

✅ Labor and Social Insurance Checklist

Appropriateness of Working Conditions

Preparation of labor contracts
Compliance with minimum wage
Compliance with legal standards for working hours and holidays
Verification of work eligibility for foreign employees

Labor Insurance

Enrollment in Workers’ Accident Compensation Insurance (1+ employee)
Enrollment in Employment Insurance (for eligible employees)
Payment of premiums

Social Insurance

Notification of applicable workplace for Health Insurance and Employees’ Pension Insurance
Employee qualification acquisition procedures
Payment of premiums

Common Practical Problems:

Part-time employees not enrolled in social insurance → Pointed out at renewal, required to enroll retroactively
Not enrolled in social insurance despite not paying officer remuneration → Risk of being judged as “not a substantial manager”

“Business Manager” Status and Fundraising (Part 5)

Due to the 2025 revision, startup fundraising methods such as J-KISS type stock acquisition rights can now be counted towards the “30 million JPY capital requirement” under certain conditions.

Recognized Conditions (Both required)

The payment must have no repayment obligation
- Loans or convertible bonds (CB) are not acceptable
Future capitalization must be guaranteed
- Will become capital if the right is exercised
- Will be recorded as profit if it expires
- A pledge that it will be treated as capital in either case

Required Documents

① Investment Agreement: Original J-KISS type stock acquisition right agreement, etc.
② Proof of Payment: Copy of bankbook or transaction statement
③ Pledge Letter: A pledge by the representative to capitalize upon future exercise of rights
Other: Other necessary documents may be requested.

Example: Utilizing J-KISS Type Stock Acquisition Rights

Seed-stage startup fundraising

Capital: 3 million JPY (Founder’s investment)
J-KISS type stock acquisition rights issued: 27 million JPY (Angel investor)
Total: 30 million JPY

Application Points:

Investment agreement specifies “future conversion to stock”
Proof that the 27 million JPY was actually paid in
Board resolution + pledge letter stating “will be capitalized upon conversion or expiration”

→ ✅ Judged as meeting the “30 million JPY requirement”.

Summary: Final Checkpoints Before Application

New Application (Starting a business in Japan)

Business Office: A physical lease contract (not short-term monthly)
Capital: 30 million JPY or more, or at least 1 full-time employee secured (*2025 revision)
Business Plan: A specific, feasible plan (*Must be verified by an expert)
Management Participation: Do you have substantial decision-making power?
Background: Degree in business administration or 3+ years of practical experience (*2025 revision)
Japanese Ability: Applicant or full-time staff must have N2 equivalent or higher (*2025 revision)

Renewal Application (Already residing)

Finances: Check the financial status of the last 2 periods using the flowchart above
Taxes: All tax obligations fulfilled
Labor: Enrolled and paying social/labor insurance
Business Reality: Actually conducting business at the registered address

Q1: Can a sole proprietor get a “Business Manager” visa? A: It is possible. However, just like a corporation, all requirements for the business office (lease specifying business use), the 30 million JPY requirement, and continuity must be met. The difficulty of proof is high, and it is not recommended. With the 2025 revision, Japanese ability (N2 equivalent) for the applicant or full-time staff, applicant’s background (degree or experience), and expert verification of the business plan are now mandatory.

Q2: What about co-founding where one person is Japanese and the other is foreign? A: If the foreigner’s role is “substantial participation in management,” it will be permitted. However, if the Japanese person is the substantial manager and the foreigner is a nominal officer, it will be rejected.

Q3: I heard you can renew even with a loss. How many years is that okay? A: There is no clear standard for the time limit. Immigration makes individual judgments based on the flowchart above, considering the presence of gross profit, insolvency status, and whether it is a startup.

Q4: Is an evaluation report from an SME Consultant or CPA always necessary? A: It is mandatory if you are insolvent. Even if not insolvent, it may be requested as an additional submission depending on the content of your business plan. With the 2025 revision, expert verification of the business plan for new applications is now mandatory.

Author Information

Akasaka International Law & Accounting Firm
Attorney at Law, Shinji Sumida

The following is the official content:
Please note that the content below is rough translation

Regarding the Revision of the Ministerial Ordinance on Landing Criteria, etc., for the “Business Manager” Status of Residence

Parts of the “Ministerial Ordinance Setting Standards for Article 7, Paragraph 1, Item 2 of the Immigration Control and Refugee Recognition Act (Ministry of Justice Ordinance No. 16 of 1990)” and the “Ordinance for Enforcement of the Immigration Control and Refugee Recognition Act (Ministry of Justice Ordinance No. 54 of 1981)” related to the “Business Manager” status of residence have been revised and will be enforced on October 16, 2025.

Related Materials

Main Contents of the Revision

1. Regarding the Employment of Full-time Staff

It will be necessary to employ one or more full-time staff in the company managed by the applicant (Ministerial Ordinance Setting Standards for Article 7, Paragraph 1, Item 2… “Activities listed in the right-hand column of the ‘Business Manager’ section of Appended Table 1-2” No. 2, (a)).

Note: The “full-time staff” requirement is limited to Japanese nationals, special permanent residents, and foreign nationals residing under a status listed in Appended Table 2 (“Permanent Resident,” “Spouse or Child of Japanese National,” “Spouse or Child of Permanent Resident,” “Long-Term Resident”). Foreign nationals residing under a status in Appended Table 1 are not included.

2. Regarding the Amount of Capital, etc.

Capital or equivalent of 30 million JPY or more will be required (No. 2, (b)).

Note:

If the business entity is a corporation: This refers to the amount of paid-in capital (capital amount) for a stock company (Kabushiki Kaisha) or the total amount of contributions for a general partnership (Gomei Kaisha), limited partnership (Goshi Kaisha), or limited liability company (Godo Kaisha).
If the business entity is an individual: This refers to the total amount invested as necessary to operate the business, such as securing the business office, salaries for hired staff (for one year), and capital investment expenses.

3. Regarding Japanese Language Ability

Either the applicant or a full-time staff member (Note 1) must possess a considerable level of Japanese language ability (Note 2) (No. 3).

Note 1: The “full-time staff” referred to here also includes foreign nationals residing under a status in Appended Table 1.

Note 2: A considerable level of Japanese language ability means B2 or higher on the “Common European Framework of Reference for Languages (CEFR),” and for individuals other than Japanese nationals or special permanent residents, one of the following must be confirmed:

Having passed the Japanese Language Proficiency Test (JLPT) N2 or higher, administered by the Japan Educational Exchanges and Services (JEES) and the Japan Foundation.
Having scored 400 points or more on the BJT Business Japanese Proficiency Test, administered by the Japan Kanji Aptitude Testing Foundation.
Having resided in Japan as a medium-to-long-term resident for 20 years or more.
Having graduated from a university or other higher education institution in Japan.
Having completed compulsory education and graduated from high school in Japan.

4. Regarding Background (Education/Work History)

The applicant must have obtained a doctorate, master’s, or professional degree (Note 1) in a field related to business administration or the technology/knowledge required for the business, OR have 3 or more years of experience (Note 2) in business management (No. 4).

Note 1: Includes equivalent degrees awarded in foreign countries.

Note 2: Includes the period of “preparatory activities for starting a business” (startup activities) under the “Designated Activities” status of residence.

5. Handling of the Business Plan

Regarding the business plan submitted at the time of status determination, confirmation by a person with specialized knowledge of management (Note) will be mandatory to evaluate its concreteness, rationality, and feasibility (Ordinance for Enforcement of the Immigration Control and Refugee Recognition Act, Appended Table 3… No. 1, (a)).

Note: As of the enforcement date, the following individuals qualify:

Small and Medium Enterprise Consultant (SME)
Certified Public Accountant (CPA)
Certified Public Tax Accountant (Zeirishi)

Please note that individuals other than attorneys (Bengoshi) or administrative scriveners (Gyoseishoshi) preparing application documents for submission to public agencies for remuneration may be in violation of the Administrative Scrivener Act.

Handling of Applications

1. Regarding Business Content

If the applicant’s activities as a manager are not sufficiently recognized, such as by outsourcing operations, it will be treated as not engaging in activities corresponding to the “Business Manager” status.

2. Regarding the Business Office

It is necessary to secure a business office appropriate for the scale of management activities under the revised standards. Therefore, using one’s home as a business office is, in principle, not permitted.

3. Regarding Applications for Permanent Residence, etc.

After the enforcement date, if the revised approval criteria are not met, applications for permanent residence from “Business Manager,” “Highly-Skilled Professional 1(c),” or “Highly-Skilled Professional 2” (premised on “Business Manager” activities), and applications to change from “HSP 1(c)” to “HSP 2” will not be approved.

4. Regarding Departure from Japan During Stay

If the applicant is absent from Japan for a long period without justifiable reason during their stay, it will be deemed that there is no actual activity in Japan, and an application for extension of the period of stay will not be approved.

5. Fulfillment of Public Dues (Taxes and Social Insurance)

When renewing the period of stay, the fulfillment status of the following public dues will be confirmed:

(1) Labor Insurance application status

Fulfillment of acquiring insured status for Employment Insurance
Fulfillment of Employment Insurance premium payments
Status of application procedures for Workers’ Accident Compensation Insurance

(2) Social Insurance application status

Fulfillment of acquiring insured status for Health Insurance and Employees’ Pension Insurance
Fulfillment of the above social insurance premium payments

(3) Payment status of the following national and local taxes to be paid as a business establishment

For Corporations

National Tax: Withholding income tax and special reconstruction income tax, Corporate tax, Consumption tax and local consumption tax
Local Tax: Corporate resident tax, Corporate enterprise tax

For Sole Proprietors

National Tax: Withholding income tax and special reconstruction income tax, Self-assessed income tax and special reconstruction income tax, Consumption tax and local consumption tax, Inheritance tax, Gift tax
Local Tax: Individual resident tax, Individual enterprise tax

6. Regarding Acquisition of Licenses and Permits Necessary for Business

Submission of documents proving the acquisition status of necessary licenses and permits for the applicant’s business will be required.

Note: If there is a justifiable reason why the license cannot be obtained until after the residence permit is granted (e.g., the permit requires residence status), submission will be required at the time of the next renewal application.

Points to Note Regarding Enforcement

1. Applications accepted before the enforcement date

For applications for Certificate of Eligibility, extension of stay, etc., accepted by the day before the enforcement date of this revised ordinance and still under review, the pre-revision approval criteria will apply.

2. Regarding renewal applications from those already residing as “Business Manager,” etc.

If a person already residing as “Business Manager” applies for renewal within 3 years from the enforcement date (until October 16, 2028), even if they do not meet the revised criteria, the decision will be made based on the business situation and the prospect of meeting the revised criteria. An evaluation document from a management expert may be requested during the review.
Renewal applications made after 3 years from the enforcement date must meet the revised criteria. Note: Even if the revised criteria are not met, if the business situation is good, tax obligations are fulfilled, and the new criteria are expected to be met by the next renewal, the decision will be made by comprehensively considering the overall residence situation.
“Highly-Skilled Professional 1(c)” (premised on “Business Manager” activities) will be treated the same, as it is based on meeting the “Business Manager” criteria.

3. Handling of Change of Status from “Designated Activities” to “Business Manager”

Change from Designated Activities (No. 44 / Foreign Entrepreneur (Startup Visa))

If the confirmation certificate was issued before the enforcement date of the revised notice regarding the Startup Visa program, the pre-revision criteria will apply to the change of status application to “Business Manager”.
If the confirmation certificate is issued after the enforcement date of the revised notice, the revised criteria will apply.

Change from Designated Activities (No. 51 / J-Find (Startup Preparation))

If the application for “Designated Activities (No. 51)” was filed, or the status was held, by the day before the enforcement date, the pre-revision criteria will apply when changing status to “Business Manager”.
If the application for “Designated Activities (No. 51)” is filed on or after the enforcement date, the revised criteria will apply.

Q&A

Q1: Regarding the newly required “full-time staff,” what kind of person should I hire?

A: The “full-time staff” requirement is limited to Japanese nationals, special permanent residents, and foreign nationals residing under a status listed in Appended Table 2 (“Permanent Resident,” “Spouse or Child of Japanese National,” “Spouse or Child of Permanent Resident,” “Long-Term Resident”). Foreign nationals residing under a status in Appended Table 1 are not eligible.

Q2: How do you confirm the business scale, such as capital?

A: We confirm if the business scale is 30 million JPY or more using the certificate of registered matters, etc. Specifically, if the entity is a corporation, we check the paid-in capital (capital amount) or total contributions. If the entity is an individual, we check the total amount invested as necessary to operate the business, such as securing the office, salaries for hired staff (for one year), and capital investment expenses.

Q3: What level of Japanese ability is required? And how do I prove it?

A: B2 equivalent or higher on the “CEFR” is required. Specifically, non-Japanese/non-special permanent residents must meet one of the following:

Having passed the Japanese Language Proficiency Test (JLPT) N2 or higher.
Having scored 400 points or more on the BJT Business Japanese Proficiency Test.
Having resided in Japan as a medium-to-long-term resident for 20 years or more.
Having graduated from a university or other higher education institution in Japan.
Having completed compulsory education and graduated from high school in Japan.

To prove with a test, submit the certificate. To prove by other methods, submit documents proving identity and background (resident certificate, diploma, etc.). In the application form (For organization, Part 1) 3(11), please indicate the presence of a person with Japanese ability and specify the content, e.g., “Hiring a Japanese national,” “Manager (applicant) has JLPT N2.”

Q4: Who specifically are the experts who verify the business plan?

A: We assume individuals with public qualifications recognized for corporate evaluation. As of the enforcement date, this includes SME Consultants, CPAs, and Certified Public Tax Accountants (Zeirishi). If this changes, we will announce it on our website.

Q5: What documents are needed for renewal of the period of stay?

A: The organization’s certificate of registered matters (if a corporation) and documents proving fulfillment of public dues are needed. For details, please check here (Info page for “Business Manager” status).

Q6: What if I cannot get a necessary business license until after I receive the “Business Manager” residence permit?

A: If there is a justifiable reason why it cannot be obtained in advance, we will check the status at the next renewal. Please submit a document (free format) explaining the specific reason why it cannot be obtained.

Q7: I applied for “Business Manager” before the ordinance was revised. Will the new criteria apply?

A: Applications accepted by the day before the enforcement date and still under review will be judged using the pre-revision criteria. However, please be aware that even if approved under the old criteria, you must meet the new criteria after 3 years have passed from the enforcement date.

Q8: I am currently residing as “Business Manager” and my renewal is soon, but I cannot meet the new criteria. What should I do?

A: For 3 years from the enforcement date (until October 16, 2028), even if you do not meet the new criteria, the decision will be made based on your business situation and prospects for meeting them.

Q9: I am currently on a “Designated Activities (No. 44)” Startup Visa… Will the new criteria apply when I change to “Business Manager”?

A: If your confirmation certificate was issued before the enforcement date of the revised notice regarding the Startup Visa program (October 15, 2025), the pre-revision criteria will apply. Subsequent renewals will be handled similarly to those already residing as “Business Manager” (see Q8), with the 3-year grace period.

Q10: What is a specific example of “insufficient actual activity as a manager”?

A: For example, cases where the majority of operations are outsourced and the applicant is not involved in daily management, or cases where they are unaware of information a manager should know, such as specific business details or financial status.

Q11: Regarding long-term absence without justifiable reason, is there a specific guideline?

A: It is judged case-by-case, but generally, if you are out of the country (including via re-entry permit or special re-entry permit) for a cumulative total exceeding half of your granted period of stay without justifiable reason, it will be evaluated as a negative factor in the renewal screening.

Q12: Please tell me the breakdown of “tax items to be paid” checked at renewal.

A: We check the payment status of the following national and local taxes to be paid as a business establishment:

For Corporations

National Tax: Withholding income tax and special reconstruction income tax, Corporate tax, Consumption tax and local consumption tax
Local Tax: Corporate resident tax (prefectural/municipal), Corporate enterprise tax

For Sole Proprietors

National Tax: Withholding income tax and special reconstruction income tax, Self-assessed income tax and special reconstruction income tax, Consumption tax and local consumption tax, Inheritance tax, Gift tax
Local Tax: Individual resident tax (prefectural/municipal), Individual enterprise tax

Regarding Clarification of Residence Status Criteria for Foreign Managers

Related Materials

Regarding Clarification of the “Business Manager” Status of Residence

When a foreign national starts a business or engages in the management or administration of an existing business in Japan, their activities fall under the “Business Manager” status. This requires that the foreign national is substantially involved in the management or administration, meaning they are engaged in activities such as making important business decisions, executing business, or auditing.

Furthermore, foreigners seeking to land in Japan with this status must meet the requirements for securing a business office (existence) and business scale as defined in the Ministerial Ordinance on Landing Criteria (hereinafter “Landing Criteria Ordinance”) for the “Business Manager” category. Additionally, for applications such as extension of period of stay, screening is conducted from the perspective of whether the applicant can continue their residential activities of managing or administering the business. Those residing with this status must also properly fulfill their obligations as business operators under relevant laws.

Based on this, to improve the clarity and transparency of operations related to decisions for the “Business Manager” status, we have consolidated previously published guidelines (“Clarification of Residence Status Criteria for Foreign Managers” (2005), “Clarification of ‘Business Manager’ Status Criteria (Handling of cases where two or more foreigners jointly manage a business)” (March 2012), and “Handling of ‘Business Manager’ Status for Entrepreneurship Support by Local Governments” (January 2018)) and are now presenting guidelines on the basic approach to the “Business Manager” status from the following perspectives.

1. Regarding Securing a Business Office

Item 1 of the “Business Manager” section in the Landing Criteria Ordinance states, “A facility to be used as a business office for conducting the business must be secured in Japan” or “A business office… must exist in Japan.” Regarding business offices, the General Principles (Item 2) of the Japan Standard Industrial Classification set by the Ministry of Internal Affairs and Communications stipulate the following:

Economic activity is conducted in a fixed location, i.e., occupying one section, under a single management entity.
The production or provision of goods and services is carried on continuously with personnel and equipment.

If these two points are met, it is recognized as satisfying the “securing (existence) of a business office” requirement. However, for activities related to the “Business Manager” status, the business must be operated continuously. Therefore, using short-term monthly rental spaces or easily disposable stalls does not meet the Landing Criteria Ordinance requirements.

In the Immigration Services Agency’s judgment of compliance with Item 1 of the “Business Manager” section of the Landing Criteria Ordinance, it is common for the business office to be a rental property. In such cases, the lease agreement for the property must specify the purpose of use as business-related (e.g., for business, store, office), and the lessee must be the corporation itself, clearly indicating its use by the corporation.

However, if an incubator (an organization providing management advice, bridging business services, etc.) is providing support, and a letter of consent for use of the business office is submitted by the applicant, the securing of a temporary address or office (like JETRO’s Invest Japan Business Support Center (IBSC) or other incubation offices) lent for the purpose of supporting entrepreneurship will be treated as satisfying the “securing (existence) of a business office” requirement.

2. Regarding Handling When Two or More Foreigners Jointly Manage a Business

When multiple foreigners who co-founded a business assume officer positions, their eligibility for the status and compliance with landing criteria will be examined based on the specific activities each individual will engage in.

As stated at the beginning, to qualify for the “Business Manager” status, the foreign national must be substantially involved in the management or administration, meaning they are engaged in activities such as making important business decisions, executing business, or auditing. Simply being appointed as an officer does not automatically qualify one for the “Business Manager” status.

Furthermore, when multiple foreigners engage in the management or administration of a business, there must be a reasonable justification for multiple managers, considering the business scale, workload, sales, etc.

In practice, the judgment of whether the activities of these foreigners constitute management or administration will be based on the specific duties they will perform, the remuneration they are set to receive as officers, and other factors.

To further clarify, all individuals can be deemed eligible for the “Business Manager” status if the following conditions are met:

There is a reasonable justification for each foreigner to manage the business, considering the scale and workload of the business.
The specific duties related to management or administration are clearly defined for each foreigner.
Each foreigner is set to receive remuneration as compensation for their management or administrative duties.

3. Regarding Business Continuity

Businesses can post financial losses for various reasons, but for business continuity, it is necessary that future business activities are expected to be carried out reliably. However, in practice, financial losses may cast doubt on the continuity of the business, while in other cases… even with losses, continuity may not be affected.

Therefore, business continuity must be judged comprehensively, including the balance sheet, rather than focusing on a single year’s results. We will handle this based on the financial results of the two most recent fiscal periods as follows:

(1) When there is a gross profit in the most recent period or the period before it

a. When there is no deficit (accumulated loss) at the end of the most recent period

If there is a net profit in the most recent period and a surplus at the end of that period, there is no issue with business continuity. Even if there is a net loss in the most recent period, as long as there is a gross profit and the surplus only decreased (i.e., no deficit occurred), it is not considered to have a major impact on business continuity.

Therefore, if there is a surplus, or neither surplus nor deficit, at the end of the most recent period, business continuity will be recognized.

b. When there is a deficit at the end of the most recent period

(A) When not insolvent (negative net worth) at the end of the most recent period

Considering the potential for future business continuity based on the business plan, funding, etc., we will request the submission of a business plan for the next year and a projected income statement. Barring doubts about the business operations, business continuity will be recognized in principle. However, depending on the content of these documents, we may further request a report (including the basis for the evaluation) prepared by a qualified third party with corporate evaluation ability, such as an SME Consultant or CPA.

(B) When insolvent at the end of the most recent period, but was not insolvent at the end of the prior period

Insolvency generally reduces a company’s creditworthiness and threatens its survival, making business continuity difficult to recognize. However, if insolvency has not persisted for more than one year, continuity may be recognized, provided there is a prospect of concrete improvement (resolving the insolvency) within one year.

Specifically, if the company is insolvent at the end of the most recent period but was not at the end of the prior period, we will request the applicant to submit an evaluation report (including the basis for the evaluation) from a qualified third party (SME Consultant, CPA, etc.) assessing the prospect of improvement (including resolving insolvency within one year). We will judge business continuity based on this report.

(C) When insolvent at the end of both the most recent and the prior periods

If the insolvency has not been resolved after persisting for more than one year, the financial situation remains severe, and sufficient improvement has not been made in one year. Therefore, in principle, business continuity is not recognized.

However, startups (defined as domestic, unlisted companies within 5 years of establishment; hereinafter the same)… are expected to incur losses in their early stages. Therefore, for startups, we will request the applicant to submit the following documents, and if they provide a reasonable explanation for the insolvency, we will judge business continuity flexibly:

An evaluation report from a qualified third party (SME Consultant, CPA, etc.) assessing the prospect of improvement (including resolving insolvency within one year).
Documents showing fundraising efforts (e.g., investment/loans from investors, VCs, banks; public subsidies/grants).
Documents showing efforts in product/service development or customer base expansion.

(2) When there is no gross profit in either the most recent or the prior period

When sales are lower than the cost of goods sold in the main business, it is not considered normal corporate activity. Even if a profit is secured through non-operating or extraordinary income/losses, it does not stem from the core business. While a lack of gross profit might occur in a single period due to special circumstances, a lack of gross profit for two consecutive periods means the company is not deemed capable of sustaining its main business. Therefore, in principle, business continuity is not recognized.

However, for startups… (as mentioned above), we will request the applicant to submit the following documents, and if they provide a reasonable explanation for the lack of gross profit, we will judge business continuity flexibly:

An evaluation report from a qualified third party (SME Consultant, CPA, etc.) assessing the prospect of improvement (including achieving gross profit within one year).
Documents showing fundraising efforts (or documents showing sufficient cash on hand if fundraising is not currently necessary).
Documents showing efforts in product/service development or customer base expansion.

*Explanation of Main Terms

Term	Explanation
Most Recent Period	The most recent period for which financial statements are finalized
Period Prior to Most Recent	The period immediately preceding the most recent period
Gross Profit (Loss)	Amount after deducting cost of goods sold from net sales
Surplus	All capital surplus and retained earnings, including legal reserves
Deficit	Unprocessed loss at end of period, accumulated loss
Insolvency (Negative Net Worth)	A state where liabilities (debt) exceed assets (property) (Total liabilities exceed total assets on the balance sheet)

4. Regarding Fulfillment of Obligations as a Business Operator

Foreign nationals residing with the “Business Manager” status are expected to operate their business properly. Their organization (including sole proprietorships) must comply with laws related to fulfilling various public obligations as follows:

(1) Compliance with Tax-Related Laws

National taxes (income tax, corporate tax, etc.) and local taxes (resident tax, enterprise tax, etc.) must be paid appropriately.

Failure to fulfill tax obligations, such as being penalized for non-payment, or even without penalties, cases of large or long-term non-payment, will be evaluated as a negative factor. Furthermore, organizations that have received a heavy penalty tax for actions like fraudulent consumption tax refunds will be evaluated as an especially negative factor due to the malicious nature of the act.

(2) Compliance with Labor and Social Insurance Laws

Working conditions for employees (including part-timers) must comply with labor laws. If the business is subject to labor insurance, proper enrollment and payment are required. Furthermore, if subject to health insurance and employees’ pension insurance, proper enrollment procedures for the business and qualification acquisition for employees, as well as appropriate payment of premiums, are required.

Non-compliance with these labor and social insurance laws will be evaluated as a negative factor.

5. Regarding Funds Raised Through Issuance of Paid Stock Acquisition Rights

Item 2(b) of the “Business Manager” section of the Landing Criteria Ordinance sets a standard of “total assets available for the business… being 30 million JPY or more.” If the paid-in capital (capital amount) for a stock company or the total contributions for a Gomei/Goshi/Godo Kaisha is 30 million JPY or more, this requirement is met.

Regarding this, payments received from issuing stock acquisition rights can be counted toward the “30 million JPY” requirement in Item 2(b) of the “Business Manager” section, provided that the amount meets both of the following conditions:

It is a payment received for issuing stock acquisition rights that has no repayment obligation.
A pledge has been made to capitalize this payment, regardless of whether it becomes paid-in capital (if the rights are exercised) or profit (if the rights expire without being exercised).

The following documents are required for this:

The investment agreement concluded for the issuance of the stock acquisition rights (e.g., J-KISS type agreement).
Proof of the amount actually paid under the agreement (copy of bankbook or transaction statement).
A pledge letter, etc., stating that the amount claimed toward the “30 million JPY” requirement will be capitalized upon future exercise of the rights.

Regarding Measures for Entrepreneurial Activities by International Students Graduated from Japanese Universities, etc.

Following the “Basic Policy 2020 for Overcoming COVID-19 and Building a New Era” (Cabinet decision, July 17, 2020), which called for facilitating entrepreneurship by international students in Japan, we have decided to allow a stay of up to 2 years for students continuing entrepreneurial activities after graduation, under certain conditions.

1. Overview

International students who were engaged in entrepreneurial activities while enrolled at universities(*) recognized for their proactive acceptance of excellent international students in Japan, and who wish to continue these activities after graduation, will be granted the “Designated Activities” status for up to 2 years, provided they meet the requirements in 2(1) below.

* Schools participating in the “Program to Promote International Students’ Job-Searching” or schools selected for the “Top Global University Project” (universities, graduate schools, junior colleges, or colleges of technology).

Additionally, foreign nationals who graduated from a Japanese university, etc. (university, graduate school, junior college, college of technology, or specialized course at a professional training college (Specialist degree)) and subsequently resided in Japan using the “Foreign Entrepreneurship Promotion Project” or the “National Strategic Special Zone Foreign Startup Promotion Project” but did not start their business within the period, will also be allowed to transition to this new measure. This allows a combined total stay of up to 2 years (including the time on the previous program), provided they meet the requirements in 2(2) below.

2. Requirements

(1) Using this system immediately after graduating from a Japanese university, etc.

The applicant must have graduated or completed studies at a school selected for the “Program to Promote International Students’ Job-Searching” or the “Top Global University Project”… *Check the links below for eligible schools: Program to Promote International Students’ Job-Searching: https://www.mext.go.jp/a_menu/koutou/ryugaku/1394574.htm Top Global University Project: https://www.mext.go.jp/a_menu/koutou/kaikaku/sekaitenkai/1360288.htm
The applicant was engaged in entrepreneurial activities while enrolled at the university in 1.
The university in 1. recommends the applicant’s entrepreneurial activity.
The university in 1. provides support for the applicant’s entrepreneurial activity.
The applicant reports their entrepreneurial activity status to the university in 1.
The university in 1. provides guidance and support for the applicant’s return to their home country if the entrepreneurial activity becomes difficult.

Note: Requirements 2-6 are judged based on the Pledge (Reference Form 1) submitted by the university in 1.

(2) Using this system after utilizing the Foreign Entrepreneurship Promotion Project or National Strategic Special Zone Foreign Startup Promotion Project

The applicant graduated or completed studies at a Japanese university, etc. (university, graduate school, junior college, college of technology, or specialized course at a professional training college (Specialist degree)).
The applicant resided in Japan under the Foreign Entrepreneurship Promotion Project or the National Strategic Special Zone Foreign Startup Promotion Project immediately after graduating from the university in 1.
The applicant utilized the project in 2. but did not start the business, and now wishes to continue entrepreneurial activities in Japan.
When transitioning to the new measure, the managing local government (from the project in 2.) must provide a reasonable explanation for the failure to start the business and evaluate that there is a high probability of starting the business in the future.
The local government in 4. or the university in 1. recommends the applicant’s entrepreneurial activity.
The local government in 4. or the university in 1. provides support for the applicant’s entrepreneurial activity.
The applicant reports their entrepreneurial activity status to the local government in 4. or the university in 1.

Note: Requirements 3-4 are judged based on the Evaluation (Reference Form 2) submitted by the local government in 4.

Note: Requirements 5-7 are judged based on the Pledge (Reference Form 3) submitted by the local government in 4. or the university in 1. Please note this form is different from the one in (1).

3. Required Documents

Please check this page.

4. Points to Note Regarding This Measure

The maximum period of stay allowed under this measure is 2 years, during which you must complete your business startup. Once the business is started, please apply for a change of status of residence to “Business Manager”.

5. Points to Note Regarding This Measure

If the dependent family (spouse, child) of the foreigner using this measure wishes to continue residing in Japan, they must apply for a change of status to “Designated Activities.” The required documents for this application are the same as for a “Dependent” status renewal.

You are welcome to contact us via the Contact Form to discuss and for more information.