When a foreign national launches a business in Japan, he or she is usually required to obtain a business manager status of residence. (Note that “status of residence” is a kin to a visa.) However, in order to get this residence status, the foreign national is subject to fulfilling certain conditions: securing a place of work (such as an office) and investing at least 5 million yen in the business, or, in lieu of the 5-million-yen investment, hiring at least two full-time employees. As such, the hurdles for a foreign national to start a new business right away are high.
On the other hand, in recent years various countries around the world have introduced startup visas that grant residency to foreign nationals who start businesses with advanced technology and the goal of achieving rapid growth in a short period of time. In line with this international trend, Japan also has introduced a startup visa system which is different from Japan’s conventional status of residence for business manager. This startup visa grants residence status to foreign entrepreneurs to prepare for the launch of their own businesses.
There are three categories of startups in Japan: those located within a National Strategic Special Zone; those approved by the Ministry of Economy, Trade and Industry; and those that target foreign students.
Startup Visas for Startups in National Strategic Special Zones
Japan’s Cabinet Office has introduced the Project to Promote Startup Businesses by Foreign Nationals , which approves National Strategic Special Zones to promote the acceptance of diverse foreign nationals who will become startup entrepreneurs.
If the local government in a National Strategic Special Zone verifies certain requirements from the business plan of the prospective entrepreneur, it will issue a Certificate of Confirmation of Business Startup Activities. If you apply for status of residence with this certificate attached, you will be granted a six-month status of residence for business or management. During this six-month period, you will need to prepare for the launch of a business in order to renew your business manager residence status.
Although a private office is normally required to obtain a status of residence for business manager, some local governments allow a business to start with just a co-working space for a certain period of time.
Startup Visas Approved by the Ministry of Economy, Trade and Industry
The Ministry of Economy, Trade and Industry (METI) has also introduced a Project to Promote Startup Businesses by Foreign Nationals, which allows foreign nationals to obtain residency status for preparatory activities for starting a business.
The applicants needs to apply to the relevant local government with documents such as a business plan, and, if approved by the local government, a Certificate of Confirmation of Business Startup Activities will be issued. If the applicant applies for a status of residence with this Certificate of Confirmation of Business Startup Activities, the applicant can obtain a status of residence for six months for certain specified activities.
If you want to renew the Startup Activity visa after 6 months, you must apply to the Immigration Services Agency after undergoing another examination by the local government and have another Certificate of Confirmation of Business Startup Activities issued. After completing up to one year of preparatory activities for launching your business, you can then continue to operate your business with the status of residence of business manager if you meet certain conditions for that particular interest.
Osaka and Kobe, which are Kobe Legal Partners’ stomping grounds, have both introduced this system described above.
Startup Visas for Foreign Students who Graduated from Japanese Universities
A system that prioritizes international students preparing to launch their own businesses has also been introduced. The Immigration Services Agency has introduced a system that allows international students who have been engaged in entrepreneurial activities while enrolled at universities and other institutions that known to be eager to accept excellent international students, and who wish to continue to engage in entrepreneurial activities after graduation, will be allowed to stay in Japan for up to two years under the status of residence for certain “specified activities” if they meet certain requirements.
Not all universities are eligible for this visa described in the previous paragraph. The international student must graduate from a university or institution that has been selected for or participates in the “International Student Employment Promotion Program”, or, in the alternative, a university or institution selected for the “Top Global University Project”.
In addition, even if a university graduate has used one of the above two systems, but has not launched a business within the allowed period, the international student can nonetheless still stay if he or she meets certain requirements and is allowed to stay in Japan for up to two years together with the stay based on the business in question.
We have provided an overview above of Japan’s startup visa program.
Although the businesses that are the target of the startup visa system may vary depending on the local government, most must be an industry or business that is capable of revitalizing the relevant municipality and increase its international competitiveness.
If you meet the requirements for a startup visa, you can start a business with less risk than the conventional path of obtaining a business manager visa. For this reason, we recommend that you consider applying for a start-up visa.
Please stay tuned for future blogs in which we explain this startup visa system in greater detail.