5% of Foreign Business Owners Consider Closing: What Japan’s Stricter Business Manager Visa Rules
Tommy’s Legal Service｜Immigration & Foreign Entrepreneur Support in Japan
5% of Foreign Business Owners Consider Closing: What Japan’s Stricter Business Manager Visa Rules Mean
Japan’s revised Business Manager visa rules require foreign entrepreneurs to explain capital, full-time staff, Japanese language ability, business substance, tax compliance, and future sustainability more clearly. This article explains the practical impact and the transitional period for renewal applications.
The impact of Japan’s stricter rules for the Business Manager status of residence is now becoming visible among foreign-owned businesses.
According to a Tokyo Shoko Research survey, 45.2% of 299 foreign-owned companies said they would be affected by the stricter requirements, and 5.3%, or 16 companies, said they were considering closing their business. Other companies are considering hiring staff, selling or merging the business, or transferring management rights to a Japanese national or a person with a residence-based status.
- The revised Business Manager visa standards took effect on October 16, 2025.
- The revised rules focus on capital, full-time staff, Japanese language ability, business plans, and business substance.
- Current Business Manager visa holders have a transitional period for renewal applications until October 16, 2028.
- However, the transitional period should be used for preparation, not for postponing action.
1. What changed under the revised rules?
The Immigration Services Agency revised the standards for the Business Manager status of residence, and the revised rules took effect on October 16, 2025. Under the new framework, applicants are expected to show a more substantive and sustainable business structure.
Key points include capital or investment amount, employment of at least one full-time employee, Japanese language ability, the feasibility of the business plan, the applicant’s business background or academic qualifications, the actual business office, and compliance with taxes and public obligations.
| Item | Practical meaning |
|---|---|
| Capital / investment amount | A company must be able to explain capital or investment equivalent to 30 million yen or more. The source of funds and actual business use of the funds should also be organized. |
| Full-time employee | The company must have a structure to employ at least one qualifying full-time employee. Employment contracts, salary payments, social insurance, and residence status should be checked. |
| Japanese language ability | The applicant or a full-time employee must be able to prove Japanese language ability. JLPT, BJT, or Japanese educational background may be relevant. |
| Business plan | Sales, profit, cash flow, customers, licenses, staffing costs, and improvement measures should be explained concretely. |
| Business substance and compliance | The immigration authority may review the office, transactions, tax payments, social insurance, labor insurance, and required licenses. |
2. The issue is not only the 5% considering closure
The figure “5.3% considering closure” is important, but it is not the whole picture.
In the same survey, 27.4% said they would respond by hiring staff or otherwise meeting the new requirements. 11.7% said they were considering selling the company or merging with another business, and 6.3% said they were considering transferring management rights to a Japanese national or a person with a residence-based status.
This means that many foreign entrepreneurs are now facing major management decisions, including capital increase, hiring, business restructuring, transfer of management rights, or whether to continue the business.
3. Why were the rules tightened?
The purpose of the stricter rules appears to be preventing abuse of the Business Manager visa through companies with little or no actual business activity.
The Business Manager status of residence is not granted merely because a person has registered a company in Japan. It is intended for people who actually engage in business management or administration activities in Japan. For this reason, stronger checks on office, capital, employees, transactions, tax, social insurance, and required business licenses are understandable.
At the same time, the new standards may create a heavy burden even for genuine small foreign-owned businesses that have been operating, employing people, and paying taxes in Japan.
4. Current Business Manager visa holders have a transitional period
Current Business Manager visa holders do not automatically have to satisfy all revised standards immediately.
According to the Immigration Services Agency, if a current Business Manager visa holder files a renewal application during the three-year period from the enforcement date, that is, until October 16, 2028, the application may be examined by considering the company’s management situation and the likelihood of meeting the revised standards in the future, even if the applicant does not fully satisfy the new criteria at the time of application.
The transitional period does not mean that renewal will be granted automatically for three years. Applicants may need to explain the current business situation, concrete steps toward meeting the revised standards, and measures such as capital increase, hiring, Japanese language capacity, and improvement of the business plan.
The Immigration Services Agency also states that applicants may be asked to submit a document evaluated by a business management expert during the examination. After the three-year period, renewal applications must, in principle, satisfy the revised standards.
5. What should be prepared during the transitional period?
Even during the transitional period, filing a renewal application without preparation is risky. If the company does not currently meet the revised standards, it is important to explain when and how each requirement will be addressed.
- Current capital or investment amount, and timing, amount, and source of any planned capital increase
- Hiring plan, job duties, and salary level if a qualifying full-time employee will be hired
- Whether Japanese language ability will be proven by the applicant or by a full-time employee
- Improvement plan for sales, profit, and cash flow
- Revised business plan
- Status of licenses, office, customers, and contracts
- Tax, social insurance, and labor insurance compliance
- Likelihood of satisfying the revised standards before the next renewal
6. Practical measures foreign business owners can consider
1. Review capital and investment amount
The first step is to check whether the company’s registry and financial statements can support the required capital or investment amount.
If there is a shortage, possible measures include increasing capital, accepting a new investor, or reviewing the shareholder and management structure. However, a purely formal or temporary transfer of funds may create immigration risks.
If capital is increased, the source of funds, bank transfer records, relationship with the investor, shareholding structure, registration procedures, and tax treatment should be properly organized.
2. Confirm whether a qualifying full-time employee can be secured
Hiring one person is not always enough. The company should organize employment contracts, working hours, salary payments, social insurance, residence records, and the employee’s status of residence in a way that can be explained to immigration.
If the company plans to rely on a foreign employee for this requirement, it is necessary to confirm whether that person’s status of residence qualifies for the full-time employee requirement.
3. Decide who will satisfy the Japanese language requirement
The company should decide whether Japanese language ability will be proven by the applicant or by a full-time employee.
If the applicant can prove Japanese ability through JLPT, BJT, or Japanese educational background, those documents should be prepared. If the applicant cannot prove it personally, hiring a full-time employee with Japanese language ability may be considered, together with supporting documents such as language certificates, residence record, employment contract, and payroll records.
4. Rebuild the business plan
Even for an existing company, a renewal application may require a business plan that explains future sustainability.
Sales, purchases, customers, profit forecast, cash flow, staffing costs, business licenses, office, and improvement measures should be described concretely. If the company has losses, declining sales, increased debt, long suspension, office relocation, or the representative’s long absence from Japan, the reasons and improvement plan should be supported by documents.
5. Organize tax, social insurance, and labor insurance compliance
Unpaid or unhandled corporate tax, consumption tax, withholding income tax, residence tax, social insurance, or labor insurance may negatively affect renewal examination.
If there are unpaid amounts or missing procedures, the company should not leave them unresolved. Payment, installment arrangements, payment plans, social insurance enrollment, and labor insurance procedures should be reviewed with relevant professionals.
6. Check the office and required licenses
The office should have independence and continuity as the actual place of business. A home office, virtual office, short-term arrangement, or office with weak business substance may create examination issues.
If the business requires a license or permit, such as restaurant business, secondhand dealer, real estate business, construction, employment placement, or travel business, the company should check whether the license, filing, renewal status, name, and business location match the current business activity.
7. Organize the representative’s actual management activity
For the Business Manager visa, the company’s situation is not the only issue. The applicant must also actually engage in business management or administration activities in Japan.
Long absences from Japan, leaving actual management to someone else, unclear officer remuneration, or unclear daily duties may raise questions about actual activity.
The applicant should be able to explain daily duties, communication with customers and suppliers, contracts, cash management, employee management, store operations, and sales activities with supporting documents.
8. Consider business decisions if the requirements cannot be met
If it is realistically difficult to meet the capital, full-time employee, Japanese language, or business sustainability requirements, other business decisions may need to be considered.
Possible options include selling the business, merging with another company, transferring management rights to a Japanese national or a person with a residence-based status, restructuring as a joint business, reducing the business scale, considering another status of residence, or planning an orderly closure.
7. Common misunderstandings
| Misunderstanding | Practical point |
|---|---|
| “Nothing needs to be done for three years.” | Even during the transitional period, the business situation and likelihood of meeting the revised standards may be reviewed. |
| “Increasing capital is enough.” | The source of funds, actual business use, business plan, hiring, tax, and social insurance compliance may also be reviewed. |
| “Any foreign employee will satisfy the full-time employee requirement.” | The employee’s status of residence, actual work, salary, and social insurance status should be checked. |
| “A written explanation is enough even if the company is in deficit.” | The reason for the deficit, improvement measures, cash flow, customers, and future sales prospects should be supported by documents. |
8. Conclusion
The stricter Business Manager visa rules may help reduce abuse by shell companies or businesses with unclear operations. However, they also create a significant burden for small foreign-owned businesses that have been genuinely operating in Japan.
Going forward, simply having a registered company or a formal business plan will not be enough. Business substance, financial stability, employment, Japanese language capacity, tax and social insurance compliance, and future sustainability will all become more important.
Foreign entrepreneurs who already hold a Business Manager visa, or who plan to start a business in Japan, should review their situation early and prepare before the next immigration application.
Need support with a Business Manager visa in Japan?
Tommy’s Legal Service supports Business Manager visa renewals, change applications, business plans, additional document requests, and immigration consultations for foreign entrepreneurs. We review the company’s situation, financial statements, employment, tax and social insurance, office, licenses, and practical options.
・Tokyo Shoko Research, “5% of companies consider closure due to stricter visa rules”
https://www.tsr-net.co.jp/data/detail/1202771_1527.html
・Immigration Services Agency, “Revision of standards for the Business Manager status of residence”
https://www.moj.go.jp/isa/applications/resources/10_00237.html
・Asahi Shimbun, “5% of foreign business owners consider closure due to stricter Business Manager visa rules”
