Japan may ease residency rule for foreign entrepreneurs

December 10, 2017

Tokyo- The Justice Ministry is considering relaxing a key requirement that foreign nationals planning to start businesses need to pass in order to obtain resident status in Japan, Jiji Press has learned.

The ministry is poised to effectively lower the minimum capital requirement for companies that will be founded by such foreigners from the current 5 million yen, on condition that they receive support from local municipalities, informed sources said.

The ministry aims to encourage a wider range of foreigners, including those with limited financial resources such as students, to start businesses as part of its efforts to revitalize the Japanese economy, the sources also said.

The requirement for the status of residence as business manager is expected to be eased by the end of March next year at the earliest. The status is granted to company owners and people at managerial posts.

Under the new rule, the amount of business-opening costs saved through office rent cuts and other measures enabled by support from local municipalities will be counted as part of the initially required capital, the sources said.

As a result, the capital requirement will effectively drop from 5 million yen.

Due to the requirement, some students had to give up the ideas of starting businesses in Japan and return home after graduating from Japanese universities, pundits said.

In 2016, 21,877 foreigners, mainly Chinese and South Korean nationals, held resident status as business manager, up by some 8,400 from three years before.

The Oita prefectural government in southwestern Japan has applied for state approval to establish a national strategic special zone to ease the capital requirement. Jiji Press