Economy Tighter business visa rules put foreign-run small businesses in Japan at risk

[thomas]

As of 16 October 2025, Japan's Business Manager Visa requires applicants to have ¥30 million (approx. $190,000) in capital, three years of management experience, a certified business plan, and to hire at least one full-time local employee. This visa is for managing or operating a company in Japan and offers a path to permanent residency.

Key Requirements (Post-Oct 2025 Updates)

• Capital/Investment: At least ¥30 million in capital.
• Office Space: A physical, independent office in Japan is required; virtual/shared desks are generally not acceptable.
• Staffing: Employment of at least one full-time employee residing in Japan.
• Management Experience: At least three years of experience in business management or administration.
• Business Plan: A detailed, feasible business plan certified by a professional (e.g., tax accountant, Small Business Consultant).
• Language/Qualification: Either the applicant or staff must have business-level Japanese (JLPT N2 or equivalent) or other qualifications.

Source: Japan's Business Manager Visa changes on October 16,2025 | Visa Immigration Lawyer Japan

This means many foreign business owners in Japan are considering shutting down. A survey by Tokyo Shoko Research (TSR) found that around 5% are considering closing their businesses. Another 45% expect some impact on day-to-day operations. The survey ran from 31 March to 7 April and drew responses from nearly 300 foreign-owned firms. At the centre of the concern is the revised business manager visa (経営・管理ビザ keiei kanri biza). The capital requirement has been raised to ¥30 million ($187,000), up sharply from ¥5 million before. Companies must also employ at least one full-time worker who is either Japanese or has stable residency, such as permanent residence.

Language is now part of the test as well. Applicants are expected to demonstrate proficiency in Japanese at approximately the JLPT N2 level. Those already in Japan need to meet the new conditions, or at least present a plan to do so, when renewing. TSR said the ¥30 million threshold stands out. Only about 1% of the roughly 140,000 companies set up in Japan in 2024 had that level of capital. About 95% were under ¥10 million. Hiring is another sticking point. The survey noted it is not easy to bring on full-time staff, especially people with the required status and language ability, at a time when labour shortages are already tight.

The Immigration Services Agency (ISA) said the tighter rules are meant to stop abuse of the system, particularly the use of shell companies to secure visas. But on the ground, smaller operators are feeling it first. Some foreign-run restaurants have already closed, and others are under pressure. In the survey, 54.8% of companies said there had been no major change to their operations so far, even as foreign-owned firms. That figure is there, though it sits next to a growing number trying to adjust. About 27% said they were raising capital to meet the new threshold. Another group, smaller but not insignificant, is weighing more drastic steps. Around 12% said they were considering selling their business or merging with others. The report points specifically to speciality restaurants. This includes small curry shops, often run by foreign owners, many of whom operate on thin margins to begin with. These businesses are expected to be hit harder than most. There are signs the strain is already showing. Bankruptcies among such eateries have been rising, and in fiscal 2025 the number reached 91 — a 30-year high, according to the report.

Small businesses likely to lose big due to stricter visa conditions | The Asahi Shimbun: Breaking News, Japan News and Analysis

Foreign business owners in Japan feeling the strain of tighter visa criteria

A survey by Tokyo Shoko Research has found that about 5% of foreign business owners are considering closing up shop while 45% expect impacts to operations.

www.japantimes.co.jp

 

[thomas]

Nikkei Asia has more info on what the Takaichi government was actually focused on:


Japan tightened its Business Manager visa rules last October. The status has for years been used as a route into the country, particularly by China's middle class. In Chinese, it is often called "run ri", a shorthand for moving to Japan. The push picked up after the strict Shanghai lockdown in 2022, which many saw as the tipping point. People were already looking, but that period seems to have accelerated things. Numbers reflect that shift. From December 2021 to June 2025, the number of Chinese residents holding this visa rose by roughly 10,000.

The tighter rules appear to be aimed, at least in part, at so-called paper companies. Earlier media reports said some of these were tied to minpaku, short-term rental operations similar to Airbnb. Activity was particularly noted in parts of Osaka where regulations had been loosened. The setup, according to those reports, often involved networks of Chinese immigration brokers, real estate agents and underground banks. The visa scheme was being used in ways not originally intended, officials have suggested, which is part of the reason for the clampdown.

Originally, the bar was too low for these Chinese newcomers. As Chinese social media posts once heralded, one could obtain an "entry ticket" to Japan by establishing a business with paid-in capital of just 5 million yen (about $33,000). The Business Manager visa gained significant traction, particularly among middle-aged migrants with children, due to its versatility: It requires no Japanese language proficiency, allows for immediate family sponsorship and grants holders greater autonomy than a standard employee visa. However, under the new rules, the required capital has increased sixfold to 30 million yen. On top of that, applicants must now hire at least one full-time Japanese national or permanent resident. A Japanese-language requirement was also introduced. As of June 2025, a total of 44,760 foreigners hold Business Manager visas. About half are Chinese, followed by sizable populations from Nepal, Pakistan and South Korea.

Propelled by anti-immigration sentiment, the recent policy tightening -- a near-unprecedented move for Japan -- has reversed the tide, leaving many grappling with a sudden, sharp spike in unpredictability. Many Chinese visa holders have told me that while 30 million yen can be manageable, the bigger hurdle is the hiring clause. Japan is suffering from a serious labour shortage. At the same time, this is already a headache for established Japanese firms; it is virtually a "mission impossible" for upstart small business owners from abroad.

More problematic still was the short notice given. Media reports about the policy change surfaced last August, and the revision took effect only two months later. Although current visa holders were supposedly granted a three-year moratorium, stricter screening measures have already begun to be applied at the administrative level, according to several Chinese interviewees. Those running legitimate businesses feel a sense of injustice, as they have been diligently paying taxes and social welfare fees.

Paywall alert:

The human cost of Japan's immigration pivot

Tougher visa rules are leaving thousands of foreign families in limbo

asia.nikkei.com

It still seems short-sighted. Presented as an anti-abuse measure, it can also be seen as anti-immigration. In a country facing a severe labour crunch, tightening access for small foreign-run businesses could backfire. The new regulations can also be framed as an effort to keep out certain foreign investors, especially from China.

 

[thomas]

The new requirements for business manager residence status, including a 30 million yen ($190,000) capital requirement, force many small businesses to close. Chan Ka Yee and her Hong Kong-style congee restaurant in Tokyo's Nerima Ward survived the COVID-19 pandemic and had just turned a profit when the new capital threshold struck. Chan decided to close the restaurant, San Mai San Nerima, located near Nerima Station on the Seibu Ikebukuro Line, after its final day of business on 20 May.

A March-April survey conducted by Tokyo Shoko Research Ltd. showed that 45 percent of 299 companies run by non-Japanese nationals said they would be impacted by the stricter conditions for the business manager visa, including Japanese language ability. The main concern was the sixfold increase in minimum required capital, from 5 million yen to 30 million yen. For renewals of the status, transitional measures will allow a grace period of three years, until October 2028. Even after that, approval may still be granted if the requirements are not fully met. However, many business owners live in fear that their applications will be rejected. And some have decided to close shop before that happens.

In Tokyo's Edogawa Ward, which has the largest Indian population in Japan, countless businesses are affected. While legitimate businesses have to close shop, most "shell companies," the actual target of the new regulations, survive because they have sufficient funds.

Visa capital rule forcing foreign business owners to close down | The Asahi Shimbun: Breaking News, Japan News and Analysis

 

[Lothor]

This is going to lead to a drabber, more homogeneous, more boring Japan. Why can't they just apply the rules to new arrivals in Japan, instead of to existing and often successful businesses?

 

[thomas]

It should be noted that the central government's April suspension of new foreign worker admissions to the food service industry is also increasingly hurting local businesses run by Japanese entrepreneurs. How utterly short-sighted and misguided.

Restaurant owner Shogo Tani said the central government did not understand the realities facing rural businesses after it suspended new foreign worker admissions for the food service industry in April. Tani, 48, runs two seafood izakaya pubs in Kitakami, Iwate Prefecture, with seating for 180 and 80 customers respectively. He said finding Japanese staff had become increasingly difficult as the local population declined and argued that restaurants could no longer operate with Japanese workers alone. The company currently employs six workers from Myanmar as cooks and waiters, many of them in their 20s. Tani had planned to hire more foreign staff ahead of the expected retirement of his head chef, who is in his late 60s. The government halted new applications on 13 April for the Type 1 Specified Skilled Worker visa for the restaurant industry after the number of foreign workers under the scheme was expected to reach the sector's upper limit of 50,000 in May. No timetable has been announced for when admissions may resume.

Freeze on foreign workers leaving Iwate restaurant at wit’s end | The Asahi Shimbun: Breaking News, Japan News and Analysis