- Introduction: What Is Happening to Foreign Entrepreneurship in Japan?
- Why Were the Business Manager Visa Requirements Tightened?
- What the Data Reveals: Last-Minute Rush and Post-Revision Stabilization
- What Is Happening on the Ground: A Supporter’s Perspective
- Impact on Clients: Stricter, but Also an Opportunity
- An Opportunity for Serious Entrepreneurs
- What Foreign Entrepreneurs Should Prepare Now
- Conclusion: The Revision Is Not the End, but a New Beginning
Introduction: What Is Happening to Foreign Entrepreneurship in Japan?
In October 2025, the requirements for the “Business Manager” status of residence (経営・管理, also known as “Investor/Business Manager”)—the visa category that allows foreigners to start businesses in Japan—were significantly tightened.
According to the latest analysis by Teikoku Databank, the number of businesses established by foreigners has decreased by approximately 40% compared to the period before the legal revision.
While 2025 saw a record high of around 20,000 companies established overall (the highest post-COVID figure), this was largely driven by a rush of last-minute incorporations in September (approximately 3,500 companies, 2.6 times the previous year’s figure) just before the new requirements took effect.
From November 2025 to March 2026, the monthly average of new foreign-led businesses dropped to around 800, well below the pre-revision average of approximately 1,400 per month.
This change is not just a numerical decline—it has had a significant impact on the ground for those of us supporting foreign entrepreneurs.
As an administrative scrivener (gyoseishoshi / 行政書士) based in Niseko, Hokkaido, specializing in status of residence applications and entrepreneurship support for foreigners, I witness the direct effects of this legal revision on my clients every day.
In this article, I would like to share practical insights on the intent behind the revision, the reality on the ground, and the outlook moving forward.
Why Were the Business Manager Visa Requirements Tightened?
The Growing Problem of Paper Companies
The primary reason for the legal revision was the increasing number of cases in which the Business Manager visa was abused through “paper companies” with no real business activity or “fake startups” aimed solely at obtaining residence status.
Originally, the Business Manager visa was designed to support foreign entrepreneurs who contribute to society through genuine economic activity in Japan.
However, in reality, many companies were established with little to no business substance, solely for the purpose of acquiring and maintaining a status of residence.
As noted in the Teikoku Databank report, certain areas in central Tokyo and specific districts in Osaka saw a significant proportion of newly registered companies established by foreigners, many of which lacked real business operations.
Ensuring Transparency and Fairness of the System
If such situations were left unchecked, the credibility of the entire system would be undermined, ultimately disadvantaging foreign entrepreneurs who are serious about doing business.
Moreover, an increase in people obtaining residence status through fraudulent applications would erode trust in Japan’s overall immigration policy.
To address this, the Immigration Services Agency of Japan decided to revise the requirements to enhance transparency and fairness.
Key Changes in the Revision
Specific changes include (details should be confirmed with the latest notifications and examination guidelines):
- Higher capital requirements: A significantly higher amount of capital (30 million yen) is now required in many cases.
- Additional employment conditions: Requirements to hire Japanese nationals, permanent residents, or employees/executives with Japanese language proficiency.
- Stricter examination of business substance: Greater scrutiny is applied to the feasibility of the business plan, the actual existence of the office, and the continuity of the business.
These changes mean that the approach of “just set up a company and get a visa” no longer works.
What the Data Reveals: Last-Minute Rush and Post-Revision Stabilization
The September 2025 Rush
After the revision was announced, September 2025 saw a surge in foreign-led business incorporations.
The figure of approximately 3,500 companies—2.6 times the previous year’s figure—clearly indicates a rush to “get in before the changes.”
Among these, there were likely both those genuinely committed to business and those trying to secure a visa before the stricter rules took effect.
Significant Decline After the Revision
After the revision, from November 2025 onward, the monthly average dropped to around 800 companies, down 40% from the pre-revision average of 1,400.
The total for January to March 2026 was about 2,400 companies, nearly half the 4,600 from the same period the previous year.
Looking at these numbers alone, one might interpret this as “foreign entrepreneurship in retreat.”
However, from a practical standpoint, this is not necessarily an entirely negative development.
An Increase in Quality
While the number of applications has decreased, the revision has resulted in a greater focus on cases with higher feasibility.
In other words, “fewer in number, but higher in quality.”
In fact, among the consultations I receive, more people are coming in with well-prepared business plans than before.
What Is Happening on the Ground: A Supporter’s Perspective
Clearer Assessment of Commitment
With stricter requirements, the number of “just checking it out” consultations has decreased, and the proportion of clients who are “seriously committed to business” has relatively increased.
This makes it easier for us as supporters to assess the client’s true commitment—which is not a bad thing.
Increased Importance of Business Plans
Previously, a somewhat formulaic business plan might have been sufficient, but that is no longer the case.
Feasibility of the business, validity of financial projections, precision of market analysis, outlook for job creation—the business substance is now rigorously examined.
This is also a test of our expertise as administrative scriveners.
It is not enough to simply prepare documents; we must think through the viability of the business itself and propose how to optimize it within the regulatory framework.
Higher Barriers for Small-Scale Startups
On the other hand, it is true that the hurdles have risen for those considering small-scale, individual-based startups such as cafes, guesthouses, or vacation rentals (minpaku / 民泊).
With stricter capital and employment requirements, those planning businesses with lower initial investment or wishing to start solo now face more preparation.
However, this does not mean it has become “impossible”—it means “more thorough preparation is necessary.”
With a feasible plan, adequate funding, and a demonstration of business sustainability, the path remains open.
Weeding Out Gray-Zone Operators
The stricter system has led to the weeding out of some intermediaries and application agents operating in gray areas.
This is a positive development for the overall health of the industry.
It also makes it easier for clients to choose trustworthy professionals.
Impact on Clients: Stricter, but Also an Opportunity
Higher Risk of Refusal
With stricter requirements, the risk of refusal has certainly increased for those who are underprepared or have weak plans.
The approach of “just submit and see what happens” is likely to waste both time and money.
Greater Transparency, and Proper Cases Are More Likely to Succeed
On the other hand, for cases with solid business plans, reasonable financial projections, and demonstrated feasibility, the environment has become more transparent and fair.
In other words, it has become easier to feel confident that “if you do it right, it will be approved.”
For foreign entrepreneurs who are serious about business, this is a welcome change.
Increased Value of Accompanying Support
As the system has become more complex and the required standards have risen, the value of professional accompanying support has increased.
Obtaining a visa is not the goal—it is the means to create a starting point.
Support that looks beyond visa acquisition to “business success,” “integration into the community,” and “realization of dreams” is more essential than ever.
An Opportunity for Serious Entrepreneurs
Differentiation from Paper Companies
The stricter requirements have clearly differentiated genuine businesses from paper companies and fake startups.
For those serious about business, the competitive environment has become fairer.
An Era Where High-Quality Applications Are Valued
Previously, it was an era where “just apply and you might get through.”
That is no longer the case.
High-quality business plans, viable business models, and contributions to the local community—these elements are now properly evaluated.
Visibility of Contribution to Local Economies
In the Niseko-Kutchan area, businesses established by foreigners—particularly in dining and accommodation—are vital to the local economy.
In this region, where tourism thrives, foreign entrepreneurs are expected to enhance local appeal, create jobs, and promote multiculturalism.
The increased emphasis on “contribution to the community” following the stricter requirements is, I believe, a positive shift.
What Foreign Entrepreneurs Should Prepare Now
Refine Your Business Plan
Above all, it is essential to refine the precision of your business plan.
You must be able to concretely answer basic questions such as: “What will you sell and how?” “Where is your market?” “What differentiates you from competitors?” “What are your first-year revenue projections?”
Clarify Your Financial Plan
With higher capital requirements, financial planning has become more critical.
Consider realistic funding plans, including not only personal funds but also potential loans or investments.
Demonstrate the Physical Existence of Your Office/Business Location
With stricter scrutiny of business substance, demonstrating the actual existence of your office or business location is important.
A virtual office alone is insufficient; you need to secure an actual place of business.
Specify Your Employment Plan
With the addition of employment conditions, you must clearly show what kind of personnel (Japanese nationals or those with Japanese language proficiency) you will hire, when, and how.
Job creation is also an important indicator of your contribution to the local economy.
Consult with Professionals Early
Because the system has become more complex, I strongly recommend consulting with professionals early.
Rather than waiting until just before application, consulting at the business concept stage can significantly improve feasibility.
We administrative scriveners are not mere document preparers—we are strategic supporters who connect regulations, reality, and life goals.
Our role is to provide individually optimized proposals tailored to each client’s unique situation.
Conclusion: The Revision Is Not the End, but a New Beginning
It is true that the October 2025 legal revision has raised the bar for foreign entrepreneurship.
However, this does not mean that “foreign entrepreneurship is over.”
Rather, the system has become more transparent, and an environment where those serious about business are properly evaluated is taking shape.
With clearer differentiation from paper companies and higher standards for business plans, the role of us supporters has also evolved.
Visa acquisition is not the goal—accompanying support that looks toward “business success,” “community integration,” and “realization of dreams” is now more important than ever.
In the Niseko-Kutchan area, foreign entrepreneurs remain essential to the local economy.
Even as regulations change, as long as there are people pursuing their dreams, there is always something we can do to help.
If you are wondering, “Can I still start a business under the current system?” or “Where should I start preparing?”—please reach out for a consultation.
Let’s explore a viable path together.
📄 Reference article:
https://news.yahoo.co.jp/articles/3f85d21b57bf74a0e2177f568780c72e2b8fd66a
