Introduction

On February 27, 2025, the Traffic Investigation Division of the Osaka Prefectural Police reportedly arrested four individuals, including a Chinese national man, for allegedly exploiting the name of a legitimate taxi company to operate unlicensed taxi services using green license plates (commercial vehicle registration), commonly known as “shirotaku” in Japan. According to media reports, this operation involved approximately 100 vehicles and is reported to have generated over 35 million yen in illicit profits.

While this may appear to be merely a case concerning the transportation industry, it is deeply connected to issues that we, as administrative scriveners, deal with daily: status of residence, employment of foreign nationals, and legal compliance.

This article uses this case as a starting point to provide detailed explanations of the legal knowledge and practical considerations that foreign residents in Japan, as well as business owners and HR personnel who employ foreign nationals, should be aware of.

Overview of the Case: What Happened?

The Arrested Individuals and Charges

According to media reports, the arrested Chinese individuals (37 years old), a transportation business operator residing in Asahi Ward, Osaka City, and three others. Liu was reportedly the former representative director of a legitimate taxi company.

The charges involve alleged violations of the Road Transport Act, including prohibited name-lending. Specifically, the suspects allegedly falsely registered vehicles used by five male drivers in their 20s to 40s, with whom they had no employment relationship, as company-owned taxis, thereby enabling them to illegally obtain green license plates (commercial vehicle registration).

Business Model and Scale

According to reports, Liu collected between 80,000 and 100,000 yen per vehicle per month in exchange for lending the company name. It is believed that approximately 100 vehicles were registered under this scheme, reportedly generating a total of over 35 million yen.

The drivers primarily served Chinese tourists, transporting them from Kansai International Airport and hotels to tourist destinations such as Kyoto and Nara. The total sales are estimated to exceed 50 million yen.

Legal Issues

This case reportedly involves multiple legal violations:

  • Road Transport Act Violation (Name Lending): It is prohibited for legitimate business operators to lend their names to others.
  • Road Transport Act Violation (Unlicensed Operation): The five drivers were also reportedly prosecuted for operating taxi services without proper licenses.
  • Potential Immigration-Related Issues: Media reports do not specify the immigration statuses of those involved. However, if any driver lacked work authorization or engaged in activities not permitted under their status of residence (often loosely referred to as a “visa”), immigration-law issues could arise.

What is Status of Residence? Basic Rules for Foreign Nationals Working in Japan

Types of Status of Residence and Employment Restrictions

Every foreign national staying in Japan must hold a status of residence (often loosely referred to as a “visa”). Statuses of residence are broadly categorized into those that permit employment and those that do not permit employment.

Main Statuses of Residence Permitting Employment:

  • Engineer/Specialist in Humanities/International Services
  • Skilled Labor
  • Specified Skilled Worker
  • Permanent Resident
  • Long-Term Resident
  • Spouse or Child of Japanese National

Statuses of Residence with Employment Restrictions:

  • Student
  • Dependent
  • Temporary Visitor (tourist visa)

Employment Must Match the Status of Residence

Crucially, each status of residence specifies the types of work activities that are permitted. For example, under the “Engineer/Specialist in Humanities/International Services” status, individuals may engage in work requiring specialized knowledge or skills (such as engineering, translation, or trade administration), but they are not permitted to work as taxi drivers or perform simple factory labor.

What is Unauthorized Employment?

Engaging in activities not permitted under one’s status of residence is called unauthorized employment. To engage in such activities, one must obtain prior “Permission to Engage in Activity Other Than That Permitted under the Status of Residence Previously Granted.”

For instance, international students may obtain permission to work part-time up to 28 hours per week. However, working without permission or exceeding the permitted hours constitutes illegal employment.

Immigration-Related Issues in This Case

Were the Drivers’ Statuses of Residence Appropriate?

Media reports do not specify the statuses of residence held by the five drivers. However, the following scenarios may be considered:

Case 1: Working under a status that does not permit employment
If the drivers held statuses such as “Student,” “Dependent,” or “Temporary Visitor” and worked as taxi drivers without obtaining permission for activities outside their status, this would constitute illegal employment.

Case 2: Status permits work, but job type does not match
Even if an individual holds a status such as “Engineer/Specialist in Humanities/International Services,” working as a taxi driver is not permitted under that status. This would also constitute unauthorized employment.

Case 3: Permanent residents or spouse visa holders
If the individuals held statuses such as “Permanent Resident,” “Long-Term Resident,” or “Spouse or Child of Japanese National,” there would be no restrictions on job types. However, participating in unlicensed operations itself constitutes a separate legal violation.

Risk of Revocation of Status of Residence

Under the Immigration Control and Refugee Recognition Act (ICRRA), if an individual is not engaging in activities corresponding to their status of residence and has no legitimate reason, the status of residence may be subject to revocation under Article 22-4 of the ICRRA.

Additionally, statuses obtained through false applications or fraudulent means are also subject to revocation. If the drivers in this case were working under inappropriate statuses of residence, the risk of revocation or non-renewal would be extremely high.

“Crime of Facilitating Illegal Employment” for Employers

Overview of the Crime

For companies employing foreign nationals, the most critical concern is the crime of facilitating illegal employment.

Article 73-2 of the Immigration Control and Refugee Recognition Act provides for criminal penalties—imprisonment for up to three years, a fine of up to 3 million yen, or both—for individuals who engage in the following acts:

  1. Causing a foreign national to engage in illegal employment activities in connection with business activities.
  2. Placing a foreign national under one’s control for the purpose of having them engage in illegal employment activities.
  3. Acting as a broker for illegal employment activities or the acts described in (2) above as a business.

“I Didn’t Know” is Not an Excuse

Even if an employer claims “I didn’t know,” negligence may be established if the employer failed to verify the residence card or if the employment arrangement was clearly unnatural.

Employers are required to confirm certain information—including status of residence and period of stay—when hiring a foreign national. Employers are also expected to ensure that the job duties align with the status of residence.

Damage Caused by Name Lending to Companies

“Name lending” cases like this one reportedly violate the Road Transport Act and may also raise issues under the Immigration Control Act.

Assisting in the application for a status of residence by forming a sham employment contract may be considered complicity in fraudulent application, potentially subjecting the company to criminal liability. Additionally, such conduct can result in loss of social credibility, termination of contracts with business partners, and even revocation of business licenses, delivering a fatal blow to business operations.

For Foreign Residents: Understand Your Status of Residence Correctly

Always Check Your Residence Card

First, please check the information on your residence card. The residence card includes the following:

  • Type of status of residence
  • Period of stay
  • Employment restrictions (“Employment not permitted,” “No restrictions on employment,” etc.)

If “Employment not permitted” is indicated, you generally cannot work. If permission for activities outside your status has been granted, this will be noted on the back of the card.

Do Not Trust “The Company Said It’s Okay”

Unfortunately, some unscrupulous employers tell foreign nationals “It’s okay, no problem” and have them engage in illegal employment.

However, you yourself will ultimately bear the responsibility. If the employer claims “I didn’t know,” only the foreign worker may be penalized.

Consult a Specialist if Uncertain

  • Is it permissible to do my current job under my status of residence?
  • Do I need permission to take a side job?
  • Do I need to change my status of residence if I change jobs?

If you have such questions, please consult a specialist such as an administrative scrivener or lawyer. Many offices offer free initial consultations.

For Business Owners and HR Personnel: Compliance Checklist for Employing Foreign Nationals

What Must Be Done at the Start of Employment

1. Verify the Residence Card
Check the original residence card and verify the following:

  • Name, date of birth, and nationality match the individual
  • Type of status of residence
  • Period of stay (expiration date)
  • Presence of employment restrictions

It is also important to keep a copy of the residence card.

2. Obtain a Certificate of Authorized Employment (Recommended)
A Certificate of Authorized Employment is an official document issued by immigration authorities certifying that “this foreign national is permitted to engage in this type of work.” While optional, obtaining it can help prevent trouble.

3. Prepare Employment Contracts
Employment contracts should clearly specify the job duties. If the actual job duties differ from those stated in the status of residence application, this may be considered fraudulent application.

Considerations During Employment

1. Manage Period of Stay
Renewal procedures must be completed before the period of stay expires. If the period expires, the individual becomes an “illegal overstayer,” and the employer may also be at risk of charges related to facilitating illegal employment.

We recommend managing expiration dates in a comprehensive list using an HR management system or ledger.

2. When Job Duties Change
If job duties change significantly due to reassignment, reconfirm alignment with the status of residence. In some cases, an application to change the status of residence may be necessary.

3. Manage Side Jobs and Secondary Employment
If a foreign employee engages in side work, confirm whether it is permitted under their status of residence. Except for statuses based on personal ties (such as Permanent Resident), side work must also fall within the scope of the status of residence.

Never Engage in Name Lending

Never comply with requests such as “Just lend me your name” or “Just employ me on paper.”

This is a clear legal violation that not only destroys corporate credibility but also results in criminal liability. Additionally, if fraudulent acquisition of status of residence is later discovered, the company may be treated as an accomplice.

What Administrative Scriveners Can Do: Support for Visa Applications and Status of Residence

Specialists in Immigration Procedures

Administrative scriveners are specialists in immigration procedures (visa applications and status of residence procedures). We support the following services:

Services for Individuals:

  • Application for Certificate of Eligibility (for inviting individuals from abroad)
  • Application for extension of period of stay
  • Application for change of status of residence
  • Application for permission for permanent residence
  • Application for naturalization
  • Application for permission to engage in activity other than that permitted

Services for Companies:

  • Compliance audits for employment of foreign nationals
  • Status of residence eligibility checks
  • Assistance with employment contracts and written explanations
  • Representation in applications to immigration authorities
  • In-house training and seminars

Early Consultation Prevents Trouble

If you have even the slightest doubt—”Is this okay?”—it is important to consult a specialist early.

  • Consulting before an application is denied provides more options than consulting afterward.
  • Once illegal employment is discovered, it may be too late.
  • Following proper procedures ensures long-term peace of mind.

Conclusion: Proper Employment Protects Everyone’s Future

The “green plate unlicensed taxi case” in Osaka is superficially a case of alleged fraud in the transportation industry, but beneath the surface lie serious issues: potential improper use of status of residence, lack of actual employment relationships, and absence of compliance awareness.

For Foreign Residents in Japan

  • Correctly understand the activities permitted under your status of residence
  • Do not blindly trust “the company said it’s okay”—verify for yourself
  • Consult a specialist if you have any concerns

Involvement in illegal activities can lead to revocation of status of residence or deportation—consequences that can profoundly affect your life.

For Business Owners and HR Personnel

  • Legal compliance is absolutely essential in employing foreign nationals
  • Thoroughly verify residence cards and status of residence eligibility
  • Name lending and sham employment contracts can cause fatal damage to companies

Proper employment management is indispensable for protecting corporate brand value and building a sustainable business foundation.

The Role of Administrative Scriveners

We, as administrative scriveners, guide you on the “right path” regarding status of residence and employment, and support you so that you can continue living and conducting business with peace of mind.

No question is too small. Please feel free to contact us. Proper procedures protect everyone’s future.

Reference Article
Chinese Tourists and “Green Plate Unlicensed Taxis”: Chinese National Man and Others Reportedly Arrested for Allegedly Exploiting Legitimate Business with Approximately 100 Illegal Vehicles
https://news.yahoo.co.jp/articles/a0c8e8842f21c79359c9b2f9def4e856e8bb71fc

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Initial consultations are provided free of charge.

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