A foreign national who wants to set up a company in Japan and run it personally will usually need the Business Manager status of residence. The criteria for this status were amended with effect from 16 October 2025. The capital requirement is now JPY 30 million or more, and applicants must also employ at least one full-time employee and meet new requirements on Japanese ability, experience and expert review of the business plan.
Incorporating the company itself follows the Companies Act. But unless the company is designed to meet the immigration criteria, the company may exist while its founder cannot live in Japan to run it. Before incorporation, it is important to check the capital, staffing, office and business plan against those criteria.
When this comes up
- A business owner abroad wants to set up a company in Japan and move there as its representative.
- A foreign employee who has worked in Japan wants to go independent and run their own company.
- A founder who set up a company with JPY 5 million in capital before the amendment, and holds Business Manager status, is worried about the next renewal.
- A foreign parent company needs to decide which status its appointee as head of the Japanese subsidiary should hold.
What the Business Manager status covers
Business Manager (in Japanese, keiei kanri) is the status of residence for operating a business in Japan or engaging in its management. Foreign nationals who run a company in Japan usually hold this status.
The criteria for granting it are set out in the Ministerial Ordinance on the criteria under Article 7(1)(ii) of the Immigration Control and Refugee Recognition Act (the "Landing Criteria Ordinance"). This ordinance and the Enforcement Regulations of the Act were amended with effect from 16 October 2025 (Immigration Services Agency of Japan).
Free Tool Related to This Article
Contract Risk Checker
Try our free simulator related to this topic.
Try for free →The 16 October 2025 amendment: what changed
The Immigration Services Agency's summary of the amendment sets out the main changes as follows.
| Item | Before | After |
|---|---|---|
| Capital / total contributions | JPY 5 million | JPY 30 million or more |
| Experience or education (manager) | None | Three or more years of business management experience, or a master's-level or higher degree in business management or the relevant field |
| Employment | None (employing two or more people could substitute for the capital) | At least one full-time employee required |
| Japanese ability | None | The applicant or a full-time employee must have a considerable level of Japanese (around CEFR B2) |
| Expert review | None | The new business plan must be reviewed by an expert in business management (except, for example, for businesses on the scale of a listed company) |
JPY 30 million in capital
For a corporation, this means the paid-in capital of a kabushiki kaisha or the total contributions of a membership company such as a godo kaisha. For a sole proprietor, it means the total invested in running the business, such as securing the office, one year's salary for employees and capital expenditure (Immigration Services Agency).
At least one full-time employee
The applicant's company must employ at least one full-time employee (Landing Criteria Ordinance, Business Manager, item 2(a)). Only Japanese nationals, special permanent residents and holders of Permanent Resident, Spouse or Child of Japanese National, Spouse or Child of Permanent Resident or Long-Term Resident status count.
Caution
Japanese ability
Either the applicant or a full-time employee must have Japanese ability at or above B2 level (item 3). For this requirement, "full-time employee" includes foreign nationals on Appended Table I statuses. The Immigration Services Agency lists the following ways of showing this:
- JLPT N2 or above
- A score of 400 or more on the BJT Business Japanese Proficiency Test
- Residence in Japan as a mid- to long-term resident for 20 years or more
- Graduation from a university or other higher education institution in Japan
- Completion of compulsory education in Japan and graduation from a Japanese high school
Experience or education
The applicant must hold a doctoral, master's or professional degree (including an equivalent foreign degree) in business management or in a field needed for the business, or have three or more years of experience in managing or operating a business (item 4). The experience may include time spent on start-up preparation under the Designated Activities status.
Expert review of the business plan
When the status is first granted, the business plan must be reviewed by an expert in business management for concreteness, reasonableness and feasibility (Enforcement Regulations, Appended Table III). As of the effective date, small and medium enterprise management consultants (chusho kigyo shindanshi), certified public accountants and certified tax accountants qualify.
What the examiners look at: office, actual activity and public charges
Meeting the numbers is not enough if the business has no real substance. The Immigration Services Agency describes how it handles applications as follows.
| Point | Approach or criterion |
|---|---|
| Office | There must be an office in Japan for the business (Landing Criteria Ordinance, item 1). Using one's home as the office is in principle not accepted |
| Actual activity | Where the applicant's activity as a manager is not sufficiently real, for example because operations are outsourced, it will not be treated as Business Manager activity |
| Time abroad | Long absences from Japan without good reason will be treated as a lack of activity in Japan, and the extension will not be granted |
| Public charges | On renewal, enrolment in and payment of labour and social insurance, and payment of corporate tax, consumption tax, withholding income tax, local corporate taxes and other taxes are checked |
| Licences | Documents showing that any licences needed for the business have been obtained are required |
| Manager's pay | A person engaged in management must receive pay at least equal to what a Japanese national would receive (item 5) |
The Agency also notes that extensions have been refused where there were problems with compliance with laws such as the Labor Standards Act and the Minimum Wage Act, or with enrolment in social insurance. For employment practice after incorporation, see "Work Rules, 36 Agreements and Working Hours at a Japanese Subsidiary".
Incorporating the company: the Companies Act procedure
Separately from the immigration application, the company itself is formed under the Companies Act. The differences between a kabushiki kaisha and a godo kaisha are explained in "Comparing Company Types in Japan".
| Step | Kabushiki kaisha (KK) | Godo kaisha (GK) |
|---|---|---|
| Articles of incorporation | Drawn up and signed or sealed by the incorporators (Companies Act, Article 26(1)) | Drawn up by the prospective members (Article 575(1)) |
| Notarisation | Required. The articles have no effect unless certified by a notary (Article 30(1)) | Article 30 does not apply |
| Contributions / liability | Paid in full without delay after subscription (Article 34(1)) | The articles state that all members have limited liability (Article 576(4)) |
| Coming into existence | On registration of incorporation at the head office location (Article 49) | Likewise on registration of incorporation |
| Organs | At least one director. A board may be established in the articles, and then at least three directors are needed (Articles 326 and 331(5)) | Members manage the business |
Where a KK is incorporated without public solicitation of subscribers, registration of incorporation must be made within two weeks of the later of the date the directors at incorporation finish their investigation and the date set by the incorporators (Article 911(1)).
Key point
Check FEFTA for investment from abroad
Where a "foreign investor", such as an individual living abroad (a non-resident) or a foreign corporation, acquires shares in a Japanese company, prior notification under the Foreign Exchange and Foreign Trade Act (FEFTA) may be required depending on the business sector, and a post-investment report may be required in other cases (FEFTA, Articles 26, 27 and 55-5). Where a foreign parent or other foreign investor will invest, check whether a notification or report is needed before the investment. See "Foreign Investment in Japanese Companies (FEFTA)" for details.
The process
- 1
Decide the plan and structure
Decide how the JPY 30 million capital, at least one full-time employee and the Japanese ability requirement will be met (Landing Criteria Ordinance).
- 2
Secure an office
Arrange an office suited to the business that is not part of your home.
- 3
Incorporate the company
Draw up and notarise the articles, pay in the capital and register the incorporation (Companies Act, Articles 26, 30, 34 and 49). For investment by a foreign investor, check FEFTA notification or reporting.
- 4
Have the business plan reviewed
Ask a business expert such as an SME management consultant, CPA or tax accountant to confirm the plan's concreteness, reasonableness and feasibility.
- 5
Apply for the status
Apply to the Immigration Services Agency with the business plan and the expert's review.
- 6
Keep up filings and payments after opening
Keep labour and social insurance enrolment, tax payments and any licences in order ahead of renewal.
People already holding Business Manager status
For people who held Business Manager status before the amendment, until three years have passed since it took effect (until 16 October 2028), an extension will not be refused merely because the new criteria are not met. Applications accepted by the day before the effective date are assessed under the old criteria.
Important
On the other hand, the Agency states that permanent residence will not be granted from Business Manager status where the amended criteria are not met. Anyone considering permanent residence should plan any capital increase or hiring early.
For cross-border matters in general, see "International & Cross-Border"; for acquisitions of and investment in Japanese companies, see "M&A and Corporate"; and for the forms of entry into Japan (branch or subsidiary), see "Entering the Japanese Market".
What you can do now
- 1
List the requirements
Check capital, full-time employee, Japanese ability and experience against your plan, one line each.
- 2
Check employees' statuses
Confirm from residence cards that the people you plan to hire are Japanese nationals, special permanent residents or hold Appended Table II statuses.
- 3
Gather proof of experience
Collect degree certificates, employment certificates and other documents showing a degree or three years of management experience.
- 4
Review the office lease
Make sure the office is not part of a home and suits the scale of the business.
- 5
Current holders: check the dates
Compare your next renewal date with 16 October 2028 and plan any capital increase or hiring.
When to talk to a lawyer
- You cannot decide in what order to incorporate the company and apply for the status.
- A foreign parent company will invest, and you are unsure whether a FEFTA notification is needed.
- Your existing company's capital or staffing falls short of the new criteria, and you are worried about renewal or permanent residence.
- You want to put shareholdings and control arrangements with co-founders or investors into a contract.
- An extension has been refused, or you have been asked to submit further documents.
We advise foreign founders and Japanese subsidiaries of overseas companies on incorporating and running companies in Japan, and on related contracts and employment matters, in English and Japanese. Please contact us through our inquiry page.
FREE CONSULTATION
Corporate Law: your first 30 minutes are free
- ・Handled by Yusuke Abe, admitted in Japan and New York
- ・Online (Zoom etc.) or at our office in Otemachi, Tokyo
- ・In English or Japanese
Frequently asked questions
Do sole proprietors also need JPY 30 million in capital?
For a sole proprietor, the test is not capital but the total invested in the business, such as securing the office, one year's salary for employees and capital expenditure (Immigration Services Agency). There is no capital as such to put up.
Does hiring foreign staff satisfy the full-time employee requirement?
Staff on Appended Table I statuses such as Engineer/Specialist in Humanities/International Services do not count. Only Japanese nationals, special permanent residents and holders of Permanent Resident, Spouse or Child of Japanese National, Spouse or Child of Permanent Resident or Long-Term Resident status count (Landing Criteria Ordinance, item 2(a); Immigration Services Agency).
Can I obtain Business Manager status without speaking Japanese?
The requirement is met if a full-time employee, rather than the applicant, has Japanese ability at or above B2 level (item 3). For this purpose, full-time employees include foreign nationals on Appended Table I statuses.
I held the status before the amendment. Do I need JPY 30 million right away?
Until three years after the amendment (16 October 2028), an extension will not be refused merely because the new criteria are not met. For later extensions too, business performance, tax payments and other circumstances will be considered as a whole.
Can I apply using my home as the office?
The Immigration Services Agency states that an office suited to the scale of the business under the amended criteria is needed, so using one's home as the office is in principle not accepted. Even before the business starts, a facility to be used as its office must be secured in Japan (Landing Criteria Ordinance, item 1).