SME business in Japan

This type of visa has many names in English and is often referred to as investor visa, business visa or a self-sponsorship visa. As one can judge from these names, this type of visa is meant for entrepreneurs who wish to establish their own business in Japan rather than work for a Japanese company as a highly skilled professional or a working holiday traveler. This type of visa is also suitable for those, who are going to manage an already existing business in Japan.

While business visa allows for more working and entrepreneurial flexibility compared to a traditional recruitment by the company as an employee, this type of visa poses much stricter requirements. Also, one must remember that it might be difficult for a foreigner to establish a company in Japan from outside Japan without the assistance of the professionals.

Where to apply?

Applications for an investor visa are done at the immigration office in Japan. Thus, you may apply personally if you reside in the country at the moment of application. You will need to ask for the assistance of a certified immigration official to submit your papers on your behalf if you reside outside Japan at the moment of application.

Who may help me establish and run the company?

A certified immigration official

In order to achieve the best possible result and get your company established and visa approved, you may need assistance from a certified immigration official. Using such an official is inevitable if you are applying from outside of Japan (see the paragraph above). They can also provide guidance about the most suitable company type for your business. Available options include kabushiki-gaisha or an incorporated company (Co., LTD), godou-gaisha or limited liability company (LLC), Japan branch of a foreign company, and a representative/liaison office.

The rules and requirements for establishing a company may slightly vary depending on the type of business. Gathering documents and running errands will demand the high level of understanding of Japanese laws and practices as well as advanced Japanese language skills. While there is a generalized outline for the requirements, application procedure, and a set of necessary documents which you may find below, actual investor visa applications are processed on the individual basis. Thus, getting a professional involved may positively influence the quality of your application and processing times.

A co-director

In order to establish a company in Japan, at least one of the company’s directors should be a resident of Japan (Japanese national, a permanent resident, a spouse or a child of Japanese national, a spouse or a child of permanent resident, or a foreign national with a long-term visa). If at the moment of application for establishment of a company you are residing outside of Japan, you will need to find a co-founder/co-director who fulfills this requirement. (See the list of requirements below.)

A tax accountant

It is highly recommended to hire a Japanese tax accountant to deal with such taxation matters as:

  • Undertaking the incorporation of the company
  • Filing corporate taxes after the legal establishment
  • Handling current tax and compliance matters. For example, annual returns, employees’ payrolls, social insurances, labor insurances, etc.
  • Helping with your individual tax as a company owner, and many others.

All of these procedures are done exclusively in Japanese and require a lot of precision while doing the paperwork and in-depth understanding of Japanese tax. Failing to handle your taxes in time and in accordance with the rules may create serious problems for your company and get your investor visa revoked.

Requirements

There are several types of activities you are eligible to do with your investor or business visa. Depending on your type of activity there are different requirements for applicants. Most common options are either starting your own company or managing an existing business.

Please note, that if you want to start your own business, you will have to establish a company in Japan prior to applying for your investor visa.

If you are starting your own business, you will need:

  • An investment (a paid in capital) of at least 5 000 000 yen (45 000 $). The higher the investment, the higher your chances of getting the investor visa, provided that other requirements have been met. The money you have invested will be available for use in your business when the incorporation process is complete. Investment can come from one’s own savings, family money, a bank loan, etc. If you choose to loan the money from a bank, you will also have to submit a loan contract specifying details of the loan.
  • A business plan. The nature of your business should be very clear and consistent and comply with the current Japanese legislation. Special attention should be paid to the articles of association as well as profit and loss statements. Your business plan should demonstrate that your company is operable and can yield results and profits. Make sure your business plan explains these points well.
  • Appropriate business license. Some types of businesses require appropriate certifications to operate. For example, restaurants, construction companies, financial services, etc. Make sure you have obtained all the necessary licenses to run your business.
  • Appropriate background and working history of an investor. If you are trying to establish a business in an area where you have no experience, your application may be waived. You need to have at least three years of relevant experience in the business sphere where you would like to establish your company in order to able to run your own company in Japan.
  • An office. The office should be an actual premise meant for business use. Pop-up stalls or monthly rental rooms, shared offices, home addresses, P/O boxes, virtual offices, temporary structures or any other similar options are not acceptable. Immigration office has the right to visit your business premises and check its compatibility with the requirements, as well as ask you for pictures of your office to make sure you are being truthful about its existence. You might need a guarantor in Japan to rent the right kind of office.
  • A co-director. At least one of company’s directors should be a resident of Japan (Japanese national, a permanent resident, a spouse or a child of Japanese national, a spouse or a child of permanent resident, or a foreign national with a long-term visa). If at the moment of application for establishment of a company you are residing outside of Japan, you will need to find a co-founder / co-director who fulfill this requirement.
  • Your company should have at least two full-time employees (beside you), who are residents of Japan (Japanese national, a permanent resident, a spouse or a child of Japanese national, a spouse or a child of permanent resident, or a foreign national with a long-term visa).

If you are going to manage an existing business, you will need:

  • Lesser investments. Your financial participation can drop to 2 500 000 yen (22 500$)
  • One full-time employee (beside you), who is a resident of Japan (Japanese national, a permanent resident, a spouse or a child of Japanese national, a spouse or a child of permanent resident, or a foreign national with a long-term visa).
  • A salary that is the same or higher as the salary of Japanese person in the comparable position.

More information about the exact set of requirements specifically for your company can be found at the immigration office.

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Duration of an inverstor visa

Investor visa can be granted for 1, 3, or 5 years. Its prolongation and duration depend on the performance and profitability of your business.

Application procedure

You can apply from outside or in Japan. Applying for an investor visa is quite simple once you have gathered all the necessary documents:

  1. Establishing your company before applying for an investor visa. You might want to use a help from a certified immigration professional and a tax accountant to help you run the errands.
  2. Applying for an investor visa Certificate of Eligibility (hereinafter COE) at the immigration office and waiting for a confirmation. A certified immigrant official can do it for you if you reside outside Japan at the moment of application.
  3. When your COE is ready, pick it up from the immigration office and exchange it for an investor status or residence (hereinafter SOR). This can be done at the Embassy or a Consulate of Japan.

Finding an office and a co-director is easier when you are in Japan. Thus, you might want to consider obtaining a four-month startup visa first to make all the necessary preparations. After everything has been set, you may apply for a change of your SOR and obtain an investor visa.

What documents do I need?

Depending on the type of the company you are intending to run and your financial situation you might need some of the following:

  • Investment information. For example, a loan contract if you choose to finance your business this way, or other documents proving your investment.
  • Well written, clear and coherent business plan, explaining the nature of your business, terms of association, projections of profits and losses, etc.
  • Company registration documents, including its capital, registered address, and information about directors.
  • Appropriate licenses should your business need them (for example, restaurants, construction companies, financial services, etc.)
  • Documents about applicant’s professional background.
  • Office rental documents, including photos of premises
  • Employee-related documents, such as payroll information, and others.

To get a detailed list of documents that you personally will need to establish your business consult a certified immigration specialist as the list of necessary papers may vary.

How long does it take to obtain an investor visa?

An establishment of a company may be a lengthy process. There is no time estimate for that since it depends on too many other factors, such as finding an office, finding a co-director, doing all the paperwork, etc. It will take 2-3 months to get a COE and another two weeks to get the SOR. If you are changing your SOR while being in Japan, you will not be able to travel outside Japan during these two weeks.

Summary

Investor visa is meant for people who are considering starting their own business in Japan or taking over the management of the existing company. In both cases, you will need to make an investment in the business, acquire appropriate licenses, and consider your team members: at least a co-director and a tax accountant.

The duration and possibility of prolongation of this visa type depend on the sustainability and performance of your company. It might be a good idea to get a startup visa and make all the necessary preparations before applying for an investor visa.

Japanese Investor Visa FAQ

I already live in Japan and I want to start a company. Can I do that?

Yes. Once you have settled your company registration, you can apply for a change of SOR to an investor or a business manager.

Can I handle application procedures on my own?

Yes, if you are residing in Japan at the moment of application. There is no official regulation demanding an applicant to cooperate or hire a certified immigration assistant or a tax accountant.

No, if you are residing outside of Japan. Applications for investor visa can only be submitted to immigration offices in Japan. Embassies and Consulates are not dealing with these issues. Thus, you will have to have a certified immigration officer to assist you.

One should remember that the complicated nature of the application and the language barriers can potentially stagnate and/or jeopardize your investor visa application. Since the stakes on opening your business in Japan are quite high and take a lot of time and effort, investing in a professional who will assist you may be a wise choice.

Do I need to be proficient in Japanese to run my company in Japan?

It depends solely on the contents of your business and a target customer. However, being able to communicate in Japanese at least the basic level will widen the pool of your possibilities in many regards: it is easier for you to communicate with co-workers, clients, and locals. You will most probably need someone with advanced Japanese language skills and understanding of Japanese legal structures to handle your business paperwork and taxation. Remember that English language skills are not so widespread in Japan. If you speak neither Japanese nor English, finding your way in Japan may be extremely hard, and you might want to consider hiring highly-skilled translators and/or interpreters.

Can I bring my family with me to Japan?

Yes, your spouse and children can come with you with the dependant visas. Remember that Japan has a different system of registration (koseki) that recognizes only official marriages. Bringing your civil spouse is not possible. Bringing a same-sex spouse with you may also be difficult since Japanese laws addressing these questions are fairly new and also vary from region to region. You can find more details about it from your local immigration office in your region of residence.

Can I bring a housekeeper or a nanny with me?

Holders of investor, legal or accounting services visas, diplomats, holders of official visas, as well as some highly skilled foreign professionals and certain members of US military can sponsor a personal helper and bring them to Japan. They will need to prove the need for having a foreign assistant with them. For example, having children less than 13 years of age in the family, or family members with severe health conditions. See more details about the personal helper visa in this article.