Japan Moves to Tighten Business Manager Visa Rules Amid Concerns Over Abuse

The Immigration Services Agency of Japan (ISA) has drafted a revision to the requirements for the Business Manager visa, a status of residence allowing foreign nationals to establish and run businesses in the country. The move follows growing concerns that the visa has been misused by individuals seeking residency without genuine business operations.

The ISA plan would raise the minimum capital requirement from 5 million yen to 30 million yen, require applicants to have at least three years of management experience or a master’s degree in Business Administration (MBA), mandate the hiring of at least one full-time employee, and oblige applicants to have new business plans certified by licensed experts such as SME consultants.

Currently, news reports are focusing on the tightening of Japan’s business management visas.

Let’s examine the materials from the Immigration Policy Committee that form the basis for this. They provide a clear understanding of the background.

Summary Report on the 6th Immigration and Residency Policy Council Meeting

(August 20, 2025 – Immigration Services Agency of Japan)

1. Introduction and Context

The 6th Immigration and Residency Policy Council (出入国在留管理政策懇談会) was convened on August 20, 2025, by the Immigration Services Agency of Japan (ISA). The central theme was “Towards More Appropriate and Effective Residence Management”.

Japan’s foreign resident population has expanded significantly over the last decade, now exceeding 3.76 million people at the end of 2024, accounting for 3.04% of Japan’s total population. This rise has been driven by multiple factors:

• growing demand for foreign labor across industries,

• the establishment of the Technical Intern Training “技能実習” (2010s) and Specified Skilled Worker (SSW, 特定技能) visa categories (2019),

• and the continued inflow of students, entrepreneurs, and long-term residents.

While foreign human resources are increasingly vital to Japan’s economy and society, numerous structural issues have emerged. These include:

• misuse of the Business Manager (“経営・管理”) visa,

• inappropriate dispatch work under the Engineer/Specialist in Humanities/International Services (“技術・人文知識・国際業務”) visa,

• the excessive diversification of the Designated Activities (“特定活動”) visa,

• unpaid taxes and healthcare costs by certain foreign residents,

• and the erosion of the educational focus of the student visa system.

Against this backdrop, the Council was tasked with identifying systemic weaknesses and debating reforms to balance the goals of:

1. Attracting skilled and entrepreneurial talent,

2. Preventing fraudulent or exploitative practices,

3. Ensuring fairness and accountability to Japanese society.

2. Statistical Overview

2.1 Population of Foreign Residents

• Total foreign residents (end of 2024): 3,768,977 (record high).

• Top nationalities: China (23%), Vietnam (16.8%), Korea (10.9%), Philippines (9.1%), Nepal (6.2%), Brazil (5.6%), Indonesia (5.3%).

• Visa breakdown:

  • Permanent Residents (Green Card holder): 918,000 (24.4%)

  • Technical Intern Trainees: 456,000 (12.1%)

  • Engineer/Specialist/International Services: 418,700 (11.1%)

  • Students: 402,000 (10.7%)

  • Specified Skilled Workers (SSW): 284,000 (7.5%)

  • Long-term Residents: 223,000 (5.9%)

  • Others (Spouse, Designated Activities, etc.): smaller proportions

2.2 Application Processing

• 2024 saw record-high numbers of applications for residence certificates, extensions, changes, and permanent residency.

• Processing times vary significantly:

  • Engineer / Specialist in Humanities / International Services visa: CoE application ~2 months, Renewal ~3 weeks.

  • Business Manager visa: CoE application ~3–5 months, Renewal ~1 month.

  • Specified Skilled Worker: CoE application ~2 months, Renewal ~1 month.

• The ISA emphasized the challenge of balancing speed with rigor: expediting decisions while avoiding fraud.

2.3 Information Integration via My Number

• As of early 2024, fewer than 60% of foreign residents held My Number cards.

• Beginning in March 2029, My Number will be linked to municipal tax data, enabling cross-agency verification of tax compliance during residence reviews.

3. Core Issues Discussed

3.1 Business Manager Visa (“経営・管理”)

Current Framework

• Eligibility requires:

  1. An established business office in Japan,

  2. Either:

     • At least two full-time employees who are Japanese or permanent residents, OR

     • At least 5 million JPY in capital investment,

  3. For managers, at least 3 years of experience in management and compensation equal to Japanese peers.

Key Concerns

• Paper Companies: Numerous cases where companies existed only on paper, with no actual business operations, no office equipment, or clear signs of commercial activity.

• Abuse by Students/Graduates: Reports of international students setting up nominal companies after graduation, securing residence without genuine business intent.

• Insufficient Economic Contribution: Minimal job creation or economic benefit in many cases, undermining the purpose of the visa.

Committee Opinions

1. Raise Capital Requirements:

   • Some argued Japan’s current threshold (5 million JPY ≈ 30,000 USD) is far too low compared to South Korea (30 million KRW ≈ 30 million JPY), the U.S. E-2 visa (USD 100,000–200,000 ≈ 15–30 million JPY), or Canada’s entrepreneur pathways (over 20 million JPY).

   • Proposals included raising the requirement to 30–50 million JPY, with mandatory 10+ Japanese employees.

2. Caution Against Excessive Increases:

   • Others warned that higher thresholds would harm legitimate small entrepreneurs (e.g., foreign-owned restaurants, small shops), while wealthy applicants or brokers could still fabricate capital.

   • They argued that field investigations and monitoring are more effective than arbitrary capital hikes.

3. Employment Requirements:

   • Some proposed strengthening mandatory Japanese employment quotas.

   • Others noted start-ups cannot always sustain full-time hires initially, and mandatory quotas might backfire.

4. Experience & Qualification Standards:

   • Opinions diverged: some advocated mandatory management experience or MBA-level education; others preferred flexible criteria to encourage young innovators.

5. Operational Measures:

   • Strong consensus emerged on:

     • On-site inspections during the first 3–6 months of business,

     • Random audits during visa renewal,

     • Closer cooperation with municipalities for field checks,

     • My Number-based verification of tax and social insurance payments.

International Comparison

• Japan: 5 million JPY or 2 full-time employees.

• Korea (D-8, D-9): 10–30 million JPY equivalent.

• U.S. (E-2): “Substantial investment,” typically 15–30 million JPY.

• Canada (Manitoba Entrepreneur): Net worth ≈ 53 million JPY + 16–27 million JPY investment.

• Japan’s low threshold stands out, sparking debate between “alignment with global norms” and “maintaining accessibility for genuine entrepreneurs.”

3.2 Engineer / Specialist in Humanities / International Services (E/H/I, 技術・人文知識・国際業務) visa

Issues Identified

• Reports of dispatch companies (Haken kaisha) misusing the category:

  • Applicants listed as “translators” or “IT engineers” but actually placed in manual labor or factory roles.

• Concerns that specialized schools (senmon gakkō 専門学校) may be used as shortcuts, channeling foreign students into E/H/I visas with minimal scrutiny.

• Suspiciously high numbers of students from certain countries (e.g., Nepalese in Okinawa), suggesting possible fraud or broker influence.

Reform Proposals

• Require graduation certificates even for hires from large corporations (to prevent fake degree claims).

• Mandate reporting of dispatch destinations and job content, enabling ISA to track actual employment.

• Restrict or ban the use of E/H/I visas for dispatch work (Haken 派遣).

• Introduce stricter inter-agency cooperation between ISA and the Ministry of Education.

3.3 Designated Activities Visa (Tokutei-Katsudo, 特定活動)

• Originally intended as an exceptional measure, the category now covers over 50 types, including:

  • Nikkei family members,

  • Foreign caregivers under bilateral programs,

  • Temporary disaster-related measures.

• Criticisms:

  • The system has become overly complex and opaque,

  • Some subcategories function as loopholes to other visa types.

Proposals:

• Reorganize into clearer categories,

• Separate temporary/emergency uses from permanent programs,

• Publish periodic reviews of permitted activities to maintain transparency.

3.4 Taxation and Healthcare Non-Payment

• Rising concerns over unpaid taxes, insurance premiums, and hospital bills by certain foreign residents.

• ISA acknowledged that current systems check tax compliance only for some visa types (e.g., Specified Skilled Worker), but not systematically across all categories.

Proposals:

• Use My Number integration to check all foreign residents’ tax and insurance contributions.

• Reflect compliance in visa renewals.

• Some members suggested creating a separate private insurance scheme for foreigners, mandatory at entry.

3.5 Student Visa and Part-Time Work

• The original principle: up to 28 hours per week of part-time work, provided study remains the main purpose.

• Problems identified:

  • Many students work the full 28 hours or more, effectively using the visa as a low-wage work permit.

  • Some schools do not monitor attendance properly, enabling “sham enrollment.”

  • Students sometimes drop out early to focus on work.

Proposals:

• Stricter monitoring of part-time work hours.

• Stronger supervision of educational institutions.

• Clearer rules to prevent “study visa” abuse as a backdoor for unskilled labor.

4. Cross-Cutting Themes

From the diverse discussions, several common threads emerged:

1. Balance of Strictness and Flexibility

   • Policies must deter fraud without excluding legitimate entrepreneurs, innovators, or students.

2. Field-Level Verification

   • Reliance on paperwork alone is insufficient. On-site inspections, audits, and municipal cooperation are key to effective control.

3. Information Integration

   • The My Number system is central to improving oversight of tax, insurance, and residency compliance.

4. Transparency and Simplification

   • Overly complex categories (e.g., Designated Activities) need reorganization to restore clarity.

5. International Competitiveness

   • Japan must maintain global attractiveness for high-level talent while raising barriers against abuse.

5. Conclusion

The 6th Immigration and Residency Policy Council highlighted Japan’s dual challenge:

• On the one hand, it must protect the integrity of its immigration system, ensuring foreign residents contribute fairly and preventing misuse.

• On the other hand, Japan cannot afford to close itself off from talented entrepreneurs, students, and workers who can invigorate its economy and society.

The discussions revealed divergent views: some advocated bold measures such as tripling capital requirements for Business Manager visas, while others cautioned that such moves would primarily hurt small but genuine entrepreneurs, without solving the core problem of fraudulent brokers.

Consensus formed around the need for:

• Enhanced monitoring (field inspections, tax/insurance checks),

• Closer inter-agency and municipal cooperation,

• Transparent visa frameworks that align with both international standards and domestic needs.

Ultimately, the Council underscored that immigration policy is not merely a legal-technical issue but a strategic balancing act between economic dynamism, social fairness, and national credibility.

The reforms to come—whether in tightening the Business Manager visa, restructuring the Designated Activities category, or modernizing student visa oversight—will profoundly shape the future of Japan’s immigration landscape in the years ahead.

This English summary preserves the key details, statistical evidence, international comparisons, and contrasting viewpoints expressed in the Council documents.

Source:

• 資料　出入国在留管理政策懇談会第６回会合（在留管理の一層の適正化に向けた検討について）Materials: 6th Meeting of the Immigration and Residence Management Policy Consultation Committee (Regarding Discussions on Further Improving the Appropriateness of Residence Management)
• 出入国在留管理政策懇談会第６回会合資料における補足説明　Supplementary Explanation in the Materials for the 6th Meeting of the Immigration and Residence Management Policy Consultation Committee
• 委員事前提出意見（在留管理の一層の適正化に向けた検討について）Opinions Submitted in Advance by Committee Members (Regarding Discussions on Further Improving the Appropriateness of Residence Management)