Japan tightens visa requirements for entrepreneurs

TokyoThe Japanese government has approved a reform that significantly tightens visa requirements for business manager (business manager), the usual and preferred route for foreigners who want to found and manage companies in the country. Starting this October, the minimum capital threshold has been multiplied by six: from five million yen (about €29,000) to 30 million yen (€172,500). It is also required to hire at least one full-time worker who is a Japanese citizen or long-term resident, and a minimum requirement of Japanese language proficiency is set. The government defends this tightening as a measure to curb the fraudulent use of this residence permit.

The regulation, which came into effect on October 1 after a brief period of public consultation, comes within a context of growing pressure from the right and far right over immigration policy. However, it opens a fundamental debate: to what extent it can hinder foreign investment and the creation of small business initiatives. Critics warn that the new regulation will penalize projects with little capital and make it difficult for young entrepreneurs who until now found this visa a viable option for establishing themselves in the country. It also creates uncertainty about what will happen to the tens of thousands of current holders and their families, who often depend on this permit to live in Japan.

The reform also introduces another requirement: business plans will have to be evaluated by a management consultant, except in the case of large companies equivalent to a listed company. Until now, it was sufficient to establish a company and prove five million yen in capital or hire two full-time employees. The visa allowed stays of up to five years and was renewable. The new professional filter may contribute to improving the quality of projects, but it also makes the process more expensive: fees and technical requirements add obstacles that, combined with the six-fold increase in minimum capital and the hiring requirement, could make this path unviable for many small foreign companies.

The Immigration Services Agency (ISA) justifies the review by citing an increase in fraudulent cases. Some members of parliament had described the visa as an "easy route" for foreigners seeking to settle in Japan at low cost. The creation of shell companies or the submission of false documents for renewals are often cited. However, the ISA itself admits that it lacks concrete statistics that would allow us to gauge the true magnitude of the problem, something that weakens the official justification and fuels the debate about whether the measure responds more to political and social pressure than to a demonstrated need.

The government has also presented the reform as aligning with the standards of other advanced economies, which often set higher investment thresholds and subject to stricter scrutiny of project viability. The official argument is to strengthen Japan's international competitiveness and attract "high-quality" entrepreneurs: people with the resources and capacity to drive initiatives with a substantial impact on the national economy.

Critical Voices

However, critics believe this calculation is flawed: tightening the barrier to entry does not protect the market, but rather limits innovation and discourages foreign investment. An entrepreneur with five million yen could create a start-up technology, a specialized consulting firm, or a service business with the capacity to generate employment. Demanding thirty million, according to the most skeptical analysts, excludes the majority of these projects: those of the global entrepreneurial middle class who don't have a lot of initial capital but do have ideas, ambition, and a capacity for risk. Furthermore, along with the increase in bureaucratic obligations, it represents a regressive strategy that contradicts the principle of an open and competitive market.

Experts emphasize that skilled immigration is a proven catalyst for prosperity. Instead of indiscriminate obstacles, they call for more precise instruments to combat fraud: selective controls, rigorous audits, exhaustive documentary verification, and exemplary sanctions against those who fail to comply. "The problem isn't the visa itself, but the misuse by some: penalizing an entire category of entrepreneurs for isolated cases is, quite simply, a mistake," a legal consultant from Tokyo, who prefers to remain anonymous, told ARA.

Ultimately, critics of the new measures believe that the official argument based on the "inappropriate use" of the system lacks concrete data to assess its magnitude. They also warn that Japan has opted for a restrictive approach that could have unintended side effects: while many countries compete to attract talent and innovative projects, Japan is raising its entry barriers and risks being left out of the global entrepreneurial ecosystem. "Time will tell if the measure truly succeeds in curbing fraud or if, on the contrary, it merely breaks a path that until now allowed many professionals to contribute value to the Japanese economy and open up new opportunities," the consultant notes.