Japan Tightens Business Manager Visa Rules to Curb Abuse, Raising Concerns Among Foreign Entrepreneurs

Tokyo, May 6, 2026 — Japan has significantly strengthened eligibility criteria for its Business Manager residence status, a visa category designed for foreign entrepreneurs. The changes, which took effect last October, aim to prevent misuse of the system while restoring integrity — but critics warn they may deter legitimate foreign investment and talent.

The Business Manager residence status allows overseas nationals to establish and operate companies in Japan, with the goal of fostering innovation and job creation. However, rapid growth in applications, particularly from Chinese nationals, raised red flags about shell companies and immigration-oriented misuse.

Japan tightens Business Manager visa rules – capital now 30 million yen, full-time employee required.

Major New Requirements

Since October 2025, applicants must now meet the following conditions:

• Capital investment of at least 30 million yen (approx. $190,000) — a sixfold increase from the previous 5 million yen threshold.

• Employ at least one full-time staff member (Japanese national or permanent resident).

• Demonstrate Japanese language proficiency.

Existing visa holders have a three-year grace period to comply with the new rules.

Widespread Investigations Reveal Problems

Immigration authorities have stepped up enforcement. Between September 2023 and December 2024, the Tokyo Regional Immigration Services Bureau investigated around 300 suspected cases and found issues in approximately 90% of them, including lack of actual business activity and nonexistent offices.

In one case documented by NHK World in Ibaraki Prefecture, officials visited an address provided by a South Asian applicant and found no trace of the claimed design firm. Similar “doorknock” inspections across regions, including Osaka, have uncovered numerous shell companies.

Surge in Applications, Especially from China

The number of Business Manager visa holders reached approximately 45,000 as of mid-2025 — 2.7 times higher than a decade earlier. Roughly half are Chinese nationals.

Many Chinese applicants were motivated by dissatisfaction with China’s strict COVID-19 policies and intense educational competition. Advertisements on Chinese social media previously promoted the visa as “easy and low-cost,” contributing to the sharp rise in applications.

Challenges for Current Business Owners

The stricter rules have created anxiety among existing holders. At a December 2025 consultation session in Osaka, Chinese business owners expressed distress:

• A restaurant owner said the sudden changes could force him to leave Japan.

• A trading company owner worried about his child’s education after enrolling in a Japanese junior high school.

Many struggle particularly with the full-time employment requirement amid Japan’s labor shortage. Ma Xiaoqing, a Chinese shop owner in Tokyo selling Japanese crafts with annual sales of around 15 million yen, relies on part-time help and doubts she can afford or attract a full-time Japanese employee.

Legal experts report that some foreign business owners have already closed companies or switched to other residence statuses.

Balancing Act for Authorities

Ito Junji, Director of the Residency Management Division at the Immigration Services Agency, acknowledged the difficulty:

"The business manager residence status was initially designed to accommodate specialized foreign professionals. However, there are now indications that the system might be misused. Achieving the right balance has proven to be very challenging."

Expert Concerns

Professor Matsushita Namiko of Suzuka University supports the need for reform but cautions about long-term effects:

"Young foreigners interested in doing business might choose to start their ventures in other countries instead of Japan. We should consider and discuss various issues by envisioning the future we desire for Japanese society."

Japan faces a shrinking population and severe labor shortages, with foreign workers now exceeding 2.5 million. The country must carefully calibrate its policies to attract genuine entrepreneurs while preventing abuse.

Outlook

While the crackdown aims to restore trust in the immigration system, the tighter rules may reduce new applications and push some legitimate businesses away. Immigration authorities and policymakers will likely continue monitoring the impact in the coming months.

For the latest Japan immigration news and analysis, visit: visasupdate.com/blog

This evolving situation highlights the ongoing challenge many developed nations face: welcoming global talent while safeguarding against system exploitation.