■ Introduction: Foreign Entrepreneurs Facing a Wave of Reform

“I think I’ll give up on renewing my visa.”

These are words I have been hearing more frequently in my office lately. Foreign business owners who have run their companies in Japan for many years often say them with a mixture of resignation and quiet sorrow.

In October 2025, the requirements for the “Business Manager” residence status were significantly tightened. Among the changes, the most significant for entrepreneurs is the increase in the required capital from 5 million yen to 30 million yen — a sixfold jump.

According to a Tokyo Shoko Research survey reported by Asahi Shimbun on April 30, 2026, 45% of foreign-owned companies said they are affected by the change, and 5% are “considering closing their business.” However, as a gyoseishoshi (immigration specialist) who regularly hears such concerns firsthand, I believe that 5% understates the reality.

This article outlines the substance of the reform, the realities I observe in practice, and what foreign entrepreneurs as well as Japanese business owners and HR managers who employ foreign nationals should consider going forward.

■ 1. What Has Changed: Key Points of the Reform

The main changes are as follows:

  • Required capital (or total investment): 5 million yen → 30 million yen
  • Newly introduced Japanese language proficiency requirement
  • More detailed business plan submission
  • Strengthened verification of actual business operations

The Immigration Services Agency of Japan explains that the tightening is intended to combat misuse of the system through paper companies. The goal of preserving the integrity of the system is understandable and reasonable. The problem, however, is that the new measures also affect small, long-standing businesses run honestly for many years.

■ 2. The Reality Behind the Numbers: Why 30 Million Yen Is an Extreme Bar

A key data point from Tokyo Shoko Research deserves particular attention. Of the approximately 140,000 companies established in Japan in 2024, only 1% had capital of 30 million yen or more. 95% had less than 10 million yen.

In other words, 30 million yen is a level of capital that very few Japanese entrepreneurs prepare when starting a new business. Yet this same requirement is now imposed as a continuing requirement on foreign business owners who already operate in Japan.

In addition, bankruptcies among “other specialty restaurants” (a category that includes many small curry shops and similar businesses run by foreign owners) reached 91 cases in fiscal year 2025 — the highest in 30 years — due to inflation and labor shortages. The new capital requirement is placing additional pressure on an already difficult business environment.

■ 3. The True Meaning of “5% Considering Closure”

The survey reported that 5% of foreign-owned companies are considering closure. From my daily practice, however, I must say that this figure may underestimate the reality.

There are several reasons. First, at the time of the survey, only a limited number of owners can clearly state “I will close.” Many are still searching for a way to continue. After carefully reviewing their options, more businesses may ultimately move toward closure or restructuring.

Second, those who have already given up on renewal may fall outside the scope of such surveys. Among my own clients, several have already decided not to renew their Business Manager visa.

Third, the word “closure” carries strong emotional weight. Owners who have devoted decades to their businesses cannot easily express it openly.

Behind the visible 5%, therefore, lies a much larger group of entrepreneurs struggling with hesitation, anxiety, and difficult decisions.

■ 4. Holding Onto a Visa Is Not Always the Best Choice

This is the most important point I wish to convey.

Because of my profession, I receive many requests asking, “How can I renew my visa?” Of course, when renewal is feasible, I offer my full support. Yet for some clients, holding onto a visa may not always be the best path.

For example, forcing an increase to 30 million yen through borrowing may impose repayment burdens that place excessive strain on the business. I have also seen cases where the obsession with renewal pushes family life, children’s futures, and the owner’s well-being into the background.

A visa is a system. Your life, however, should come first. Rather than fitting your life to the system, the system should support your life. I encourage every client to keep this perspective in mind.

■ 5. Options Available to Foreign Business Owners

Concretely, the following options should be considered.

Option 1: Meet the requirements and renew. If financing is realistic and the business is profitable, this remains the natural path. The quality of the business plan and proof of past performance are critical.

Option 2: Sell the business or pursue M&A. Long-cultivated customer bases, locations, and know-how are valuable assets. The owner can receive compensation while the business itself continues.

Option 3: Transfer management rights. Co-founders, family members, or trusted partners may take over operations.

Option 4: Switch to another residence status. Spouse visa, Long-term Resident, Dependent, Specified Skilled Worker, or Engineer/Specialist in Humanities/International Services may, depending on circumstances, provide a more stable foundation for life in Japan.

Option 5: Restart in the home country. Experience and networks built in Japan can be leveraged to rebuild operations abroad, turning the experience gained in Japan into an asset for the next stage.

The right answer depends on age, family situation, assets, the nature of the business, and the individual’s own wishes. For this reason, I urge clients not to face this alone but to consult an expert early.

■ 6. To Japanese Business Owners and HR Managers Who Employ Foreign Nationals

This issue is highly relevant to companies that employ foreign workers.

First, your suppliers and partners may be affected. If foreign-owned suppliers exit the market, your own business continuity may be affected.

Second, the career paths of your foreign employees are at stake. Talented foreign staff often consider independence at some point. With a higher Business Manager bar, some will continue working at companies, while others may move to countries where entrepreneurship is more feasible. HR strategy must take this into account.

Third, your approach to the environment surrounding foreign residents in Japan affects your reputation among global talent and your CSR profile.

■ 7. Early Consultation Expands Your Options

Finally, I want to emphasize timing.

When clients come only after the renewal deadline is imminent, available options become significantly limited. By contrast, if preparations begin six months or a year in advance, capital increases, succession planning, or alternative status changes can be evaluated calmly.

While owners are telling themselves “there is still time,” options may gradually disappear. If anything in this article resonates, please reach out before those options narrow.

■ Conclusion: Looking Beyond the System to the Person

Gyoseishoshi lawyers are often seen as document drafters. In truth, we engage with the lives behind those documents.

The tightening of the Business Manager residence status has created a difficult reality. Yet there is more than one path forward. Rather than clinging to a visa, choices should be made with the broader context of a person’s life in mind. I believe supporting those decisions is our true role.

To foreign entrepreneurs who feel anxious, and to executives and HR professionals concerned about the future of their foreign staff: please do not shoulder this alone. Simply organizing the situation with a professional can often reveal a way forward.

Reference article:
https://digital.asahi.com/articles/ASV4W268RV4WUTIL00BM.html

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