Points to keep in mind when a foreign student sets up a company in Japan and changes to a business management visa

Kobe Legal Partners provides legal advice each year to the many foreign students, including university students, who are staying in Japan as foreign students, but want to set up a company and run their own businesses in Japan after graduation.

It is possible for a foreign student to obtain a business management visa shortly after graduation. However, since the immigration authorities conduct a strict screening when a foreign student changes his or her visa status to a business management status, it is important to prepare early and well.

Reasons Why Changing from a Foreign Student Resident Status to a Business Management Resident Status is Difficult.

The basic attitude of the immigration authorities about foreign students changing their visa status to business management is based on their assumption that the only reason foreign students want to get a business management visa is because they could not find a job.

What immigration officials require for a business management visa are aptitude and qualifications as a manager. If it is determined that a foreign student does not have the necessary aptitude and qualifications as a manager, then the change to a business management visa will not be granted. In the case of a foreign student with absolutely no experience as an adult in the real world, it is doubtful whether that foreign student is capable of suddenly running a company.

It is these types of issues that make changing from a foreign student visa to a business management visa difficult. For a change to business management status to be approved, you must dispel these concerns of the immigration officials.

Points to Keep in Mind for Changes from Foreign Student to Business Management Resident Status

Setting Up a Company

One thing you must do before applying for a business management visa is to set up a company. Although you may think that students who come to Japan on a foreign student visa cannot set up a company, in fact, that is not the case. Although you cannot actually start operations until you have a business management visa, you can set up the company and do other tasks to get it to the point right before the start of the business.

Clarify the Source of Capital Funds

One thing that foreign students must pay particular attention to is the source of the capital funds for the company.

To obtain a business management visa, a company with JPY5,000,000 capital is set up; however, it is necessary to prove how this capital amount was raised. In other words, the source of the capital funds must be evidenced by some kind of document.

A foreign student visa is a resident status that does not allow the holder to work. Even if permission is granted to engage in an activity, such as part-time work, which is outside the permitted scope of activity for a foreign student’s resident status, normally, it would not be possible to save the amount of JPY5,000,000. If the foreign student were to explain that the JPY5,000,000 had been saved from a part-time job, that foreign student would likely be suspected of having worked illegally by working hours that exceed those allowed under the permission to engage in an activity outside the scope of resident status referred to in the preceding sentence.

In reality, there are many cases where the parents assist by providing the required capital amount. Even in this case, the foreign student will need to clearly indicate whether this financial assistance from parents (or other family members) is a loan or a gift without conditions.

Preparing a Business Plan Document

The most important thing in changing to a business management visa is drawing up a precise and detailed business plan and then summarizing it in a sound written business plan.

Although foreign students are often viewed as lacking real-world experience, the preparation of a detailed business plan document can be used to convince immigration authorities of your aptitude and qualifications as a business manager.

One requirement that the immigration authorities place great importance on in the screening for a business management visa is the continuity and stability of the business, and the examination of the continuity and stability of the business is based primarily on the written business plan. If you can clearly demonstrate your vision for the business in the written business plan and use what you have learned, your expertise, experience and strong points persuasively, you will be much closer to getting your business management visa approved.

Preparing as early possible

If you are considering changing from a foreign student visa to a business management visa, you should start your preparations as early as possible.

Please keep in mind that it does take time to prepare a business management visa application.

Since having an office is also a requirement for a business management visa, you will need to find and secure an office. In addition, depending on the nature of the company’s business, it may also be necessary to obtain required approvals and licenses.

Further, planning and putting together a good business plan document will also require preparation.
If you are a foreign student who wants to open your own business and change to a business management visa, please contact Kobe Legal Partners soon for legal consultation.

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