Who is able to skip the 5,000,000 JPY capital and dedicated office space requirements of the Business Manager Visa?
As we all know, acquiring Business Manager residential status to operate a business in Japan requires fulfilling two major requirements:
5,000,000 JPY capital
Dedicated office space
So, who exactly can skip this major obstacle and operate a business without meeting these requirements?
Short answer:
Permanent Residents
Special Permanent Residents
Long Term Residents
Spouse of Japanese Nationals
Spouse of Permanent Residents
Highly Skilled Professional (HSP)
Japan Finance Corporation (JFC), the biggest public financial institution that offers loan programs for founders, conducted extensive research regarding foreign business managers in Japan last year. The number of people surveyed was well over 600.
In this research paper, the authors insist on the necessity of increasing international students, keeping them and creating a comprehensive support system after evaluating policies for bringing foreign entrepreneurs in the US, UK, Germany, and South Korea.
Kansai Bureau of Economy, Trade and Industry (近畿経済産業局) distinguishes founders into three categories.
Student turned founders
Their personnel network, cultural competence, and higher Japanese language ability make business expansion easier, but they often have issues with fundraising.Spinned-out founders from Japanese companies
Their characteristics are similar to student turned founders, but they spend more time in Japan to start a business than student turned founders.Founders landed in Japan to start a business
They only spend a small amount of time in Japan until they start a business. Their challenges are language barrier, understanding of Japanese culture and norm.
Foreign business owners in Japan
The authors referred and gathered data that TOKYO SHOKO RESEARCH, LTD has been collecting (as of October 2020). Out of 703,277 small and medium sized enterprise (SME) owners, 0.7% (5,232 owners) are originally from abroad.
The number of Business Manage Visa holders as of June 2021 was 26,943.
Owning a business without holding the Business Manager Visa status
Aside from Business Manager Visa holders, the following status holders can start a business, incorporate a company, and run businesses without meeting the 5,000,000 JPY capital & dedicated office space criteria.
Permanent Residents (793,164)
Special Permanent Residents (312,501)
Long Term Residents (204,787)
Spouse of Japanese Nationals (145,254)
Spouse of Permanent Residents (41,517)
Highly Skilled Professional (15,891)*
*JFC did not include HSP in their report.
p.65 of the report “増加する外国人経営者とその全体像”
That being said, JFC acknowledges that it is hard to guess how many actual “foreign business managers” are operating businesses in Japan, especially because over 70% of those surveyed already have Permanent Residence status, and the number of Permanent Residents far overshadow the number of Business Manager visa holders.
p.78 of the report “増加する外国人経営者とその全体像”
So where are the Business Manager Visa holders located?
The top three are Tokyo (45.2%), Osaka (9.2%), and Kanagawa (5.7%), followed by Chiba (5.0%), Aichi (3.4%), Fukuoka (3.1%), and Hyogo (2.6%).
And where are they originally from?
p.67–68 of the report “増加する外国人経営者とその全体像”
The majority (44.7%) is from China, with Korea (19.7%) coming in second. Overall, Asian countries make up 84.7%.
Distribution across the rest of the continents are as follows:
Europe 8.1%
North America 3.9%
South America 2.6%
Oceania 0.8%
As of June 2021, statistically 91.7% (24,708 out of the total 26,943) of Business Manager visa holders staying in Japan are from Asian countries according to the immigration bureau.
Age of foreign business owners
Average age of “business owners” was 51.2 years old.
p.68 of the report “増加する外国人経営者とその全体像”
When did they become “business owners”?
On average they started a business at the age of 38.
p.70 of the report “増加する外国人経営者とその全体像”
Academic background of foreign business owners
According to JFC’s research in 2020, 38.6% of foreign business owners have a Bachelor or Associate degree, and 4.5% have a Master degree.
Japanese language ability of business owners
Over 84.6% of business owners’ language ability is higher than Business Level Japanese.
p.70 of the report “増加する外国人経営者とその全体像”
JFC is one of the most friendly financial institutions for foreign business owners since the majority of mega-banks allow only Permanent Residents to take out a loan (not business manager visa holders). However, given that the 600+ surveyed consisted of mostly Permanent Residents (greater than 70%), the majority of them are originally eligible to apply for loan programs anyway. Furthermore, this survey of over 600 business owners may not perfectly reflect the latest trend of founders’ information, especially “startup founders” information given the fact that it’s hard to track how many Permanent Residents are actually owning companies.
At the same time, the completely skewed ratio between Business Manager Visa holders and Permanent Residents might be an actual reflection of the scarcity of Business Manage Visa holders, considering the limited fundraising opportunities for English-speaking foreign founders on top of the difficult-to-meet capital and office requirements specified under immigration law.
Which brings us back to our original questions:
How many founders are actually successful in holding on to Business Manager visas while naturally operating their businesses, and can Japan revitalize the economy by focusing their efforts on only supporting Startup Visa holders instead?
