Japan to Introduce New Residency Status for Angel Investors to Boost Startups
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Angel Investors Visa
The Japan government is considering a new residency status system to attract “angel investors” from overseas who will invest in Japanese startup companies. This system, particularly within the National Strategic Special Zones (国家戦略特区: Kokka Senryaku Tokku), aims to allow a maximum stay of five years and is set to be introduced in fiscal year 2024 (in other words, within March 2025).
Details of the Residency Status
[NOTE] The following information is under consideration and is not final. In addition, applications cannot yet be submitted at this time.
- Residency Period
- Up to five years (extension to be decided at the three-year mark).
- Investment Requirements
- Investment plans of several tens of millions to about 100 million yen are necessary.
- Investments must be made in startups based in Tokyo.
- Asset Requirements
- Investors must have a certain amount of assets.
- Track Record Requirements
- Investors must have experience in investing in startup companies or a track record as investors.
- Achievements in specific fields, awards, media appearances, and roles in specific associations will also be considered.
- Activity Requirements
- Investors are required to provide advice and support to startup companies.
- A certificate of no criminal record must also be submitted.
Japan Government’s Objectives
The Japan government aims to supplement the growth capital that is lacking in Japan. They seek to improve the current situation where startups struggle to raise funds by incorporating foreign capital and expertise.
Current Situation and Challenges
Although the amount of venture capital (VC) investment in Japan is increasing, it is still relatively small compared to the United States. Additionally, many Japanese startups are struggling to raise funds due to their early-stage deficits. Thus, it is crucial to promote capital supply from angel investors and support the growth of these companies.
Examples from Abroad
In the United States, there is a system where permanent residency can be obtained by investing a certain amount in specific regions. The UK also had a system allowing residency extensions with a minimum investment of 2 million pounds. Japan plans to establish a similar new residency status system based on these examples.
Role of Special Zones
This new residency status system will be experimentally implemented in the National Strategic Special Zones (国家戦略特区: Kokka Senryaku Tokku). Municipalities that house these special zones will certify and manage investors to prevent illegal activities such as money laundering. Based on the achievements within these zones, the Japan government will decide whether to establish this as a formal residency status.
Future Prospects
The government plans to finalize the specific investment amounts and requirements to strengthen the attraction of angel investors and promote the growth of Japanese startup companies. They also aim to include requirements for investors to provide advice to startups to realize more effective support.
Conclusion
By introducing this new residency status system, it is expected that Japanese startup companies will be able to raise more funds and grow. At the same time, angel investors will be able to stay in Japan long-term and contribute to the nurturing of these companies, leading to economic revitalization.
My Opinion
I have always explained to my clients that there is only a ‘business manager visa’ in Japan, but not an ‘investment visa’. The Business Manager visas and investment visas are similar and different, but were extremely difficult for clients to understand. The business manager visa is a visa that focuses on how to do business in Japan, not on the amount of investment. Active participation in ten businesses is required.
However, the investment visa does not require you to actually manage the business; it will be granted if you achieve certain results as an investor. This investment visa is being created in Japan, as it is in other countries.
This would be an attractive visa for certain wealthy individuals. As shown in this website, Japan currently has a long-stay visa for long-term tourist purposes for wealthy people. However, there are nationality restrictions on this application. It does not appear that the Angel Investors visa is intended to have nationality restrictions, so it is expected that applications from, for example, China will increase.
