Key Takeaways
- Plan Ahead: Start your business planning in your third year of university to allow sufficient time for the 6-8 month transition process
- Meet the New Requirements: ¥30 million capital AND one full-time employee hire AND a physical office (as of October 2025)
- Build Your Network: Leverage university resources, city programs, and professional support early
- Consider Alternatives: Explore Startup Visa programs (up to 2 years preparation time as of January 2025) in cities like Tokyo, Fukuoka, Sendai, and others
Transitioning from a student visa to a Business Manager Visa has become significantly more challenging since the October 2025 reforms, but with proper preparation and strategic planning, foreign students can still successfully launch businesses in Japan. This guide covers everything you need to know about the new requirements, timeline, and proven strategies for making the switch.
CRITICAL UPDATE (October 2025): The Business Manager Visa requirements underwent major reform effective October 16, 2025. New applicants must now meet ALL of the following:
- ¥30 million capital (increased from ¥5 million)
- Hire at least one full-time employee (日本人, permanent residents, or spouse/child visa holders)
- Maintain Japanese language capability (N2 level) either through the applicant OR a full-time employee
- Demonstrate 3+ years management experience OR hold a master’s degree or higher in business/related field
- Secure a physical office space (virtual offices not permitted)
- Obtain professional verification of business plan by certified consultant (中小企業診断士, tax accountant, or CPA)
Existing visa holders: Those who obtained Business Manager Visas before October 16, 2025 have until October 16, 2028 to transition to the new standards during their renewal applications. Immigration will evaluate on a case-by-case basis during this 3-year grace period.
First Two Steps in the Transition
Step 1: Create a Comprehensive Business Plan
A robust, professionally verified business plan is now mandatory under the October 2025 reforms. Unlike the previous system where applicants could submit their own plans, the Immigration Services Agency now requires verification by certified professionals (中小企業診断士, licensed tax accountants, or CPAs).
5 Key Components of a Business Plan (2026 Standards)
- Executive Summary: Clear articulation of your business concept, target market, and competitive advantage
- Market Analysis: Data-driven research identifying your target market, competitors, and entry strategy specific to Japan
- Financial Projections: Detailed revenue forecasts, expense breakdowns, and funding allocation showing how ¥30 million capital will be deployed over 12-24 months
- Operational Strategy: Comprehensive explanation of business structure, employee roles, office operations, and growth timeline
- Professional Verification: Certification from a licensed 中小企業診断士 (SME Management Consultant), CPA, or tax accountant confirming the plan’s feasibility, market viability, and compliance with immigration requirements
For detailed guidance on creating immigration-compliant business plans, see SmartStart Japan’s Business Plan for a Japanese Startup in 8 Easy Steps.
JETRO provides free templates on its Global Connection website to help structure your plan. These templates are tailored to meet immigration requirements, ensuring your plan is professional and compliant. Check out Smart Start Japan’s Business Plan for a Japanese Startup for a step-by-step guide. Start drafting early to allow time for revisions, and consider consulting with a professional to refine your plan for municipal approval.
Step 2: Incorporate a Legal Entity
To qualify for a Business Manager Visa, you must establish a legal business entity in Japan. The two most common options for startups are the Godo Kaisha (GK / 合同会社) and Kabushiki Kaisha (KK / 株式会社). While both are viable, the choice depends on your business goals, funding needs, and growth strategy.
Godo Kaisha (GK) vs. Kabushiki Kaisha (KK):
| Feature | Godo Kaisha (GK) | Kabushiki Kaisha (KK) |
| Setup Cost | Lower (approx. ¥60,000–¥100,000) | Higher (approx. ¥200,000–¥300,000) |
| Setup Time | Faster (1–2 weeks) | Slower (2–4 weeks) |
| Flexibility | Flexible structure, ideal for small startups | More rigid, suited for larger businesses |
| Credibility | Less formal, but sufficient for visa purposes | Higher credibility for investors and partners |
| Capital Requirement | No minimum capital (but ¥30M needed for a visa) | No minimum capital (but ¥30M needed for a visa) |
Why Students Often Choose GK: Lower setup costs allow more capital to be allocated toward the ¥30 million visa requirement. However, if you plan to raise funding from Japanese venture capitalists or form partnerships with traditional Japanese corporations, a KK structure may provide better long-term positioning despite higher initial costs.
Five Strategic Tips for Student Entrepreneurs
1.Start Early (Minimum 12-18 Months Before Graduation)
Begin planning your visa transition during your student years. The process can take 4–8 months, including business plan approval and incorporation. Utilize your time in Japan to research the market and refine your idea. Early preparation reduces stress and increases your chances of approval.
The transition from student to Business Manager Visa now requires 12-18 months of preparation due to the October 2025 reforms. Here’s why:
Begin planning your visa transition during your student years. The process can take 4–8 months, including business plan approval and incorporation. Utilize your time in Japan to research the market and refine your idea. Early preparation reduces stress and increases your chances of approval.
- Capital Accumulation: Raising ¥30 million takes significant time. Students should begin exploring funding sources (angel investors, family support, crowdfunding) at least 18 months before graduation.
- Business Plan Development: Creating and obtaining professional verification for your business plan requires 2-4 months.
- Company Incorporation: Legal entity setup takes 3-6 weeks.
- Office Securing: Finding and contracting a compliant physical office space can take 1-3 months.
- Employee Recruitment: Hiring a qualified full-time employee who meets residency and Japanese language requirements may take 2-4 months.
- Certificate of Eligibility (COE) Processing: Immigration review typically takes 2-3 months.
- Timeline Recommendation: Begin planning in your third year of university. Use your final year to execute incorporation, secure office space, and prepare your visa application.
2. Leverage University Resources and Startup Networks
Your student status provides unique access to entrepreneurial ecosystems that become harder to access after graduation:
University Resources:
- Startup incubators and accelerators (many Japanese universities offer foreign student-friendly programs)
- Business plan competitions with prize money that can contribute to capital requirements
- Alumni networks, particularly successful foreign entrepreneurs who navigated the visa process
- Career centers with immigration consultation services
City-Level Startup Programs:
- Tokyo: Tokyo One-Stop Business Establishment Center (TOSBEC) offers free consultation in multiple languages
- Fukuoka: Startup Café provides workspace, mentorship, and visa support
- Sendai: Startup support center with specialized foreign entrepreneur programs
- Kyoto: Focus on tech and AI startups with university partnerships
For comprehensive guidance on city-specific programs, see SmartStart Japan’s resource on 5 Japanese Cities to Consider for Incorporation.
3.Engage Immigration Specialists Early
The October 2025 reforms dramatically increased the complexity and stakes of Business Manager Visa applications. Professional support is no longer optional, it’s essential:
What Immigration Specialists Provide:
- Business plan structuring and professional verification coordination
- Capital sourcing strategy and documentation
- Entity structure selection (GK vs KK) based on your specific situation
- Office space identification meeting immigration requirements
- Employee recruitment guidance for visa-qualifying hires
- Complete COE application preparation and submission
- Municipality coordination and approval management
Cost-Benefit Analysis: Professional immigration services typically cost ¥300,000-¥800,000, but significantly reduce the risk of rejection. Given that a rejected application wastes 3-6 months and may require leaving Japan, professional support provides substantial insurance value.
SmartStart Japan specializes in student-to-Business Manager Visa transitions and offers comprehensive packages including business planning, incorporation, and visa application support. Schedule a free consultation to discuss your specific situation.
4.Consider Startup Visa Programs (Up to 2 Years Preparation Time)
As of January 2025, the Startup Visa system allows qualifying foreign entrepreneurs up to 2 years (previously 1 year) to prepare for Business Manager Visa requirements without needing to meet capital or office requirements upfront. This is particularly valuable for students transitioning after graduation.
How Startup Visa Works:
- Apply to participating municipality with preliminary business plan
- Receive approval for “Special Activities” (特定活動) visa status
- Use 2-year period to raise capital, develop business, and secure office space
- Transition to full Business Manager Visa once requirements are met
Participating Cities (2026):
- Tokyo: All 23 wards participate; apply through Tokyo One-Stop Business Establishment Center
- Fukuoka: Pioneering program with coworking space allowances; Startup Café support
- Sendai: Strong support for tech entrepreneurs
- Osaka: Focus on international trade businesses
- Kyoto: AI and university-connected startups
- Other participating cities: Nagoya, Kobe, Hiroshima, Niigata, and 15+ additional municipalities
Key Advantages for Students:
- Avoid immediate ¥30M capital requirement
- Remain in Japan legally while building your business
- Access to municipal startup support services
- Time to secure proper funding and partnerships
- Gradual transition from student to entrepreneur status
*Each municipality has slightly different application requirements and timelines. Research specific city programs at least 6 months before applying.
5. Maintain Meticulous Documentation. Immigration checks for Business Manager Visas is exceptionally rigorous under the 2025 reforms. Incomplete or inconsistent documentation is the leading cause of rejections and delays.
Critical Documents to Maintain:
- Capital Documentation: Complete chain-of-custody for all ¥30 million, including source of funds, transfer records, and bank statements (minimum 6 months history)
- Business Plan: Final version with professional verification certificate
- Corporate Documents: Registration certificate (登記事項証明書), Articles of Incorporation (定款), shareholder records
- Office Lease: Full contract showing business-use permission, floor plans, and landlord contact information
- Employee Records: Employment contract, social insurance enrollment, residence certificate, Japanese language certification (if applicable)
- Professional Licenses: Any industry-specific permits required for your business (飲食店営業許可, etc.)
Organizational System: Create both physical and digital filing systems. Immigration may request additional documentation during the review process, and response time is critical.
Verification note: Source of capital is heavily scrutinized. Sudden large deposits without clear origin documentation (employment history, investment records, gift letters with tax documentation) will trigger additional review and possible rejection.
Eight Key Challenges & Solutions
1. Capital Requirement (¥30 Million)
Challenge: The Business Manager Visa requires a minimum capital investment of ¥30 million, the hiring of one full-time employee. Securing this funding can be difficult for students. This will make it harder to switch from a student visa to a Business Manager visa.
Funding Sources for Students:
- Angel Investors: Japan has a growing community of angel investors interested in foreign-founded startups. Resources include:
- Japan Investor List for Foreign Founders (2024)
- University alumni networks
- Industry-specific investor matching events
Family Support: Gifts from family members are acceptable if properly documented with:
- Notarized gift letters explaining the relationship and source of funds
- Tax documentation from the home country
- Bank transfer records showing clear origin
Crowdfunding: Japanese platforms like Makuake and Campfire, or international platforms for Japan-focused projects
Government Programs: Some municipalities offer matching grants or low-interest loans for foreign entrepreneurs (inquire with local economic development offices)
Startup Visa Strategy: Use the 2-year Startup Visa period to raise capital gradually while building business traction
Alternative Structure: If you cannot secure ¥30M upfront, consider the Startup Visa route in cities like Fukuoka, which allows you to operate from coworking spaces while raising capital over a 2-year period.
*Immigration strictly scrutinizes capital sources. “Borrowed money” that must be returned after visa approval (見せ金) is illegal and will result in permanent visa rejection if discovered. All capital must be genuine, verifiable investment in the business.
Critical: Source-of-funds documentation has become a major focus since the October 2025 reforms. Expect immigration to trace the origin of funds back 12+ months. Prepare comprehensive documentation showing how the capital was legitimately accumulated or obtained.
2.Securing a Physical Office Space
Challenge: Immigration requires a dedicated physical office space that is clearly separated from residential areas. Virtual offices, coworking hot desks, and home-based offices are NOT acceptable for initial Business Manager Visa applications. Many landlords are reluctant to rent to newly incorporated companies with foreign directors.
Finding Visa-Compliant Office Space:
- Serviced Offices with Dedicated Space: Companies like Regus, WeWork, and Servcorp offer individual offices (not shared desks) that meet immigration requirements. Costs: ¥100,000-¥300,000/month.
- Traditional Office Rentals: Conventional office leases typically require:
- Guarantor company (保証会社) instead of personal guarantor
- 6-12 months advance payment (deposit + key money + rent)
- Business registration certificate (available after incorporation)
- Startup-Friendly Properties: Some landlords specialize in startup rentals:
- Lower deposit requirements
- Month-to-month flexibility
- Foreign entrepreneur-friendly application processes
City-Specific Resources:
- Tokyo: Tokyo One-Stop Business Establishment Center (TOSBEC) maintains a list of startup-friendly properties
- Fukuoka: Startup Visa holders can use certified coworking spaces (福岡市 approved facilities) for the initial 6-month period, then must secure dedicated space
- Sendai: Municipal office space introduction program
- Kobe: Temporary office options for startups through economic development programs
Budget Planning: Expect to allocate ¥600,000-¥2,000,000 for office setup including deposits, advance rent, furniture, and utilities. This should be included in your ¥30M capital deployment plan.
Verification note: Office space must be secured BEFORE visa application. Include lease contract, floor plan showing dedicated workspace, and landlord confirmation letter in your application materials.
For assistance identifying visa-compliant office space, SmartStart Japan has partnerships with landlords experienced in supporting foreign entrepreneurs. Contact us for office space introductions.
3.Legal Documentation and Immigration Procedures
Challenge: The Business Manager Visa application involves extensive documentation across multiple government agencies:
- Immigration Services Agency (Certificate of Eligibility application)
- Legal Affairs Bureau (corporate registration)
- Tax offices (national and local)
- Social insurance offices (employee enrollment)
- Municipal offices (business notifications)
Each agency has specific requirements, forms, and timelines. Missing or incorrect documentation results in rejection, requiring complete resubmission and months of delays.
Additional Complexity Since October 2025:
- Mandatory professional business plan verification
- Enhanced capital source documentation
- Employee qualification verification (residency status, Japanese language ability)
- Proof of N2-equivalent Japanese capability within the organization
DIY Approach (Not Recommended for Students): If you attempt self-filing, expect 200+ hours of research, multiple trips to government offices, and high rejection risk due to documentation errors.
Professional Immigration Support (Strongly Recommended): Immigration specialists (行政書士) who focus on Business Manager Visas provide:
- Complete documentation checklist customized to your situation
- Business plan development and professional verification coordination
- Application form preparation in Japanese
- Direct submission and follow-up with immigration
- Response to Requests for Evidence (RFE) from immigration
- Status tracking and timeline management
Cost vs. Value: Professional services cost ¥300,000-¥800,000 but dramatically increase approval rates. Given that a rejected application wastes 3-6 months and may force you to leave Japan, professional support is a prudent investment
4. Business Plan Quality and Professional Verification
Challenge: Under the October 2025 reforms, business plans must demonstrate exceptional depth, feasibility, and market understanding, verified by certified professionals. Immigration reviews business plans from multiple perspectives:
Evaluation Criteria:
- Market Viability: Evidence-based assessment of target market size, competitor analysis, and realistic market penetration projections
- Financial Sustainability: Detailed 12-24 month financial projections showing how ¥30M capital will support operations, employee salaries, and achieve profitability targets
- Competitive Advantage: Clear articulation of why a foreign entrepreneur can succeed in this specific Japanese market
- Scalability: Demonstration that the business can grow beyond the minimum visa requirements
- City Alignment: Compatibility with local economic development priorities (particularly important for Startup Visa applications)
Professional Verification Requirement: Your business plan must be reviewed and certified by one of the following:
- 中小企業診断士 (SME Management Consultant)
- 公認会計士 (CPA)
- 税理士 (Licensed Tax Accountant)
The professional reviewer evaluates your plan for 具体性 (specificity), 合理性 (rationality), and 実現可能性 (feasibility). They stake their professional reputation on their certification, so they will not approve weak or unrealistic plans.
Creating a Strong Business Plan:
- Industry Research: Gather concrete data on market size, growth rates, competitor performance, and regulatory requirements. Use Japanese government statistics (経済産業省, 総務省統計局) to demonstrate thorough understanding.
- Financial Modeling: Create detailed projections showing:
- Capital deployment across quarters
- Monthly operational expenses (rent, salaries, utilities, materials)
- Revenue assumptions with supporting market data
- Break-even analysis and path to profitability
- Sensitivity analysis for key assumptions
- Competitive Analysis: Identify 5-10 direct competitors and articulate your differentiation clearly. What unique value do you provide that existing Japanese companies cannot
- City-Specific Alignment: If applying in Tokyo (AI/fintech focus), Fukuoka (international trade focus), or Kyoto (tech/innovation focus), tailor your plan to demonstrate alignment with local priorities.
- Professional Review Preparation: Before engaging a certified consultant, have your plan reviewed by:
- University business professors
- Mentors from startup incubators
- Successful foreign entrepreneurs who’ve completed the process
SmartStart Japan’s Business Planning Service: We provide comprehensive business plan development specifically designed to meet immigration requirements and pass professional verification. Our service includes:
- Market research and competitive analysis
- Financial modeling with Japanese market context
- City-specific opportunity assessment
- Draft plan development
- Coordination with certified verifiers (中小企業診断士)
- Immigration-ready final documentation
Verification note: Professional verification costs ¥100,000-¥300,000 and takes 2-4 weeks. Budget for this in your planning timeline and startup costs.
5.Timeline Management and Deadlines
Challenge: The COE process takes 6–8 months, and documents like the Certificate of Confirmation must be submitted within three months.
- Certificate of Confirmation (経営活動確認証明書, for Startup Visa): Must be submitted within 3 months of issuance
- Certificate of Eligibility (在留資格認定証明書): Valid for 3 months after issuance
- Student visa expiration: Must have new visa approved or depart Japan
- Employee hiring: Must be in place before visa application submission
Recommended Timeline (Working Backward from Graduation):
- 18 months before graduation: Begin capital accumulation and business concept development
- 12 months before graduation: Finalize business model, begin professional network building
- 9 months before graduation: Incorporate company, apply for Startup Visa (if using this route)
- 6 months before graduation: Secure office space, begin employee recruitment
- 4 months before graduation: Complete business plan and obtain professional verification
- 3 months before graduation: Submit Certificate of Eligibility (COE) application
- 1 month before graduation: Receive COE approval, prepare for visa status change
Contingency Planning: Build 2-3 months of buffer time. If your COE application is delayed or receives a Request for Evidence (RFE), you may need additional time to respond.
SmartStart Japan provides project management services to keep your transition on track. We maintain detailed timelines, coordinate between service providers, and ensure all deadlines are met.
6. Finding and Hiring a Visa-Qualifying Employee
Challenge: The October 2025 reforms require hiring at least one full-time employee BEFORE visa approval. This employee must meet specific criteria:
Employee Eligibility Requirements:
- Japanese citizen, permanent resident, OR holder of spouse/child visa (日本人の配偶者等, 永住者の配偶者等, 定住者)
- NOT eligible: Other work visa holders (技術・人文知識・国際業務, etc.), student visa holders, dependent visa holders
- Full-time employment: Minimum 30 hours/week, 217+ days/year, social insurance enrollment
- Capability: Either the employee OR the business owner must possess N2-level Japanese language ability
Why This Is Difficult for Student Entrepreneurs:
- Most students’ networks consist of other visa holders who don’t qualify
- Japanese citizens with appropriate skills typically have stable employment
- Salary requirements must be competitive (minimum ¥250,000-¥350,000/month depending on role and location)
- Employee must be genuinely necessary for business operations (not just “paper hiring” for visa purposes)
Recruitment Strategies:
- University Career Centers: Post positions through university job boards targeting Japanese students
- Hello Work (ハローワーク): Japan’s public employment service, free job posting
- Recruitment Agencies: Specialized agencies for startup hiring (costs typically 25-30% of annual salary)
- Professional Networks: Tap into entrepreneurship communities, coworking spaces, startup events
- Family Members: If you have a spouse or family member who qualifies, they can fulfill the employee requirement
Making the Position Attractive:
- Equity compensation packages (stock options)
- Flexible working arrangements
- Clear growth path as the company scales
- Opportunity to build something new
Documentation Required:
- Employment contract showing full-time status and salary
- Social insurance enrollment (健康保険, 厚生年金)
- Employee’s residence certificate (住民票)
- Japanese language certification (if employee is meeting the N2 requirement)
Alternative: If you cannot hire immediately, consider applying for a Startup Visa first. This gives you 2 years to build your business and revenue, making it easier to offer competitive salaries and attract qualified employees before transitioning to the full Business Manager Visa.
SmartStart Japan can assist with recruitment strategy, draft employment contracts compliant with Japanese labor law, and coordinate social insurance enrollment. Contact us for employee hiring support.
7. Employee Recruitment and Qualification
Challenge: Limited Japanese proficiency and unfamiliarity with business culture can complicate the application process. Risks: Miscommunication can lead to errors or delays.
Solution: Partner with bilingual consultants or join programs like Fukuoka’s Startup Café for English-language support. Attend cultural workshops offered by JETRO.
Resource: An article published by Scaling Your Company provides an insightful breakdown of Japanese corporate culture.
8.Language/Cultural Barriers
What Immigration Evaluates During Renewals:
- Progress toward meeting new ¥30M capital requirement (or explanation if not possible)
- Steps taken to hire qualifying full-time employees
- Business sustainability and revenue growth
- Tax compliance and social insurance participation
- Demonstrated intention to meet new standards
Renewal Strategy by In Timeline:
- 2026-2027 Renewals: Show concrete progress toward new standards. Even if you can’t immediately increase capital to ¥30M, demonstrate:
- Revenue growth and business viability
- Plans for capital increase or employee hiring
- Professional consultant assessment of business trajectory
- 2027-2028 Renewals: Immigration expects substantial movement toward compliance. Marginal businesses may receive shorter renewal periods (1 year instead of 3-5 years).
- Post-October 2028: Full compliance with new standards expected. Businesses that cannot meet requirements may face non-renewal.
If you’re a current visa holder who cannot immediately meet ¥30M + employee requirements:
- Increase Capital Gradually: Document a clear plan to increase capital through:
- Revenue reinvestment
- New investor fundraising
- Convertible notes or equity arrangements
- Hire Strategically: Even if you can’t afford a ¥350,000/month employee initially, show progression toward this goal
- Maintain Excellent Compliance: Perfect tax and social insurance records become even more critical
- Professional Consultation: Obtain a 中小企業診断士 assessment of your business showing growth potential and path to new standards compliance
- Consider Alternative Structures: Some businesses may benefit from restructuring or merger to meet capital requirements
SmartStart Japan assists existing Business Manager Visa holders with renewal strategy, compliance documentation, and capital structuring options. We help you navigate the transitional period and position your business for continued renewal success. Contact us for renewal consultation.Verification note: The grace period does not guarantee renewal. Immigration assesses each case individually based on business viability, compliance history, and demonstrated progress toward new standards.
9.Demonstrating Business Sustainability
Challenge: Immigration no longer evaluates Business Manager Visas solely on meeting technical requirements. They now assess whether your business is genuinely viable and can sustainably support you and your employee(s).
What Immigration Reviews:
- Revenue sufficient to cover operational costs plus owner and employee salaries
- Consistent business activity (not sporadic projects)
- Appropriate business scale relative to your capital and business type
- Tax payments and social insurance contributions
- Growth trajectory or stability for established businesses
For New Applicants: Your business plan must convincingly demonstrate path to revenue. Vague projections are insufficient, immigration wants to see:
- Identified customers or market segment with purchase data
- Pricing models backed by competitive analysis
- Sales timeline with realistic lead times for Japanese market
- Marketing and customer acquisition strategy with budget allocation
For Renewal Applicants: Actual financial performance becomes the focus:
- Positive cash flow or clear path to profitability
- Revenue trend (growth is strongly positive, stability is acceptable, decline requires explanation)
- Appropriate owner compensation (too high relative to revenue raises concerns; too low suggests non-viability)
Building Business Viability:
- Pre-Launch Customer Development: Before incorporating, validate demand through:
- Pilot customers or letters of intent
- Pre-sales or crowdfunding campaigns
- Partnership agreements with established companies
- Market research demonstrating specific demand
- Conservative Financial Planning: Build 12-18 months of operational runway into your ¥30M capital plan:
- Office rent: ¥1,200,000-¥3,600,000/year
- Employee salary: ¥3,000,000-¥4,200,000/year
- Owner salary: ¥3,000,000-¥6,000,000/year
- Other operations: ¥2,000,000-¥4,000,000/year
- Total: ¥9-18M/year operational costs
- Remaining capital for growth investments and buffer
- Revenue Milestones: Set and track clear revenue targets:
- Month 3-6: First customers, proof of concept
- Month 6-12: Consistent revenue stream established
- Month 12-18: Path to profitability visible
- Month 18-24: Sustainable operations without continued capital injection
- Professional Financial Management: Hire a qualified tax accountant (税理士) from day one to:
- Structure finances properly
- Ensure accurate tax filings
- Generate immigration-ready financial documentation
- Provide independent assessment of business health
For Service Businesses: Professional services (consulting, IT development, trading) must demonstrate client pipeline and contract flow.
For Product Businesses: Show production capability, supplier relationships, and customer acquisition channels.
For Restaurant/Retail: Demonstrate location analysis, target customer demographics, and realistic revenue per customer projections.
10. Employment Law and Social Insurance Compliance
Challenge: Hiring your required full-time employee creates mandatory compliance obligations under Japanese labor and social insurance law. Non-compliance can result in visa denial or non-renewal.
Mandatory Requirements:
- Health Insurance (健康保険): Enrollment within 5 days of employment
- Pension Insurance (厚生年金保険): Enrollment within 5 days of employment
- Employment Insurance (雇用保険): Enrollment within next month after employment
- Workers’ Compensation Insurance (労災保険): Enrollment before business operations begin
- Employment Contract: Written contract specifying role, salary, hours, benefits
- Work Rules (就業規則): Required when you have 10+ employees (not immediately applicable to most student startups)
Cost Impact:
- Employer social insurance contributions: Approximately 15% of employee salary
- For a ¥300,000/month employee: Additional ¥45,000/month in employer contributions
- Administrative costs: Tax accountant fees ¥30,000-¥50,000/month for payroll processing
Immigration Verification: Immigration actively checks social insurance compliance during both initial applications and renewals. You must provide:
- Social insurance enrollment certificates
- Payment records (納付書)
- Employment contracts
- Payroll records
Social Insurance Setup Process:
- Pension Office Registration (年金事務所): Register company as applicable establishment
- Labor Standards Office (労働基準監督署): Register for workers’ compensation
- Hello Work (ハローワーク): Register for employment insurance
- Employee Enrollment: Submit paperwork for each required insurance program
- Monthly Compliance: Make timely payments, maintain records, file reports
Professional Support Recommended: Most startups engage a licensed social insurance consultant (社会保険労務士) to handle:
- Initial registration process
- Monthly payroll calculation
- Insurance payment coordination
- Immigration documentation preparation
- Compliance monitoring
Cost: Social insurance consultant fees typically ¥30,000-¥50,000/month for small startups.
Critical: Do not attempt “paper employment” without genuine social insurance enrollment. Immigration cross-checks with pension office databases and will detect fake hiring arrangements.
SmartStart Japan coordinates with licensed social insurance consultants (社会保険労務士) to ensure complete employment law compliance from day one. We handle all registration, enrollment, and ongoing compliance requirements. Learn more about our HR compliance services.
Verification note: Social insurance non-compliance is one of the top reasons for Business Manager Visa renewal rejection. Budget for these costs from your initial planning stage.
Three big reasons why your Business Manager Visa is getting denied
Next Steps:
Schedule a free consultation to discuss your specific situation. We’ll assess your timeline, business concept, and capital access, then provide a customized roadmap for your transition from student to successful business owner in Japan.
Your entrepreneurial journey in Japan starts with a conversation. Let’s begin.
Reason for change: Restructured conclusion to provide actionable next steps rather than generic encouragement, emphasized timeline reality (12-18 months), created clear value proposition for SmartStart services specific to student transitions, strengthened call-to-action with specific next step (free consultation), removed generic “start early, meet requirements” language in favor of a concrete action plan.
Frequently Asked Questions: Student to Business Manager Visa Transition
Can I incorporate a company while still on a student visa?
Yes, you can incorporate a company while on a student visa. However, you cannot engage in business management activities (signing contracts, conducting negotiations, receiving compensation) until you obtain Business Manager Visa approval. Think of it as “building the structure” during your student period, but not “operating the business.”
What happens if I can’t raise ¥30 million before graduation?
Consider the Startup Visa route first. This gives you up to 2 years to raise capital, develop your business, and meet full requirements. Available in 26+ Japanese cities including Tokyo, Osaka, Fukuoka, and Kyoto.
Can I work part-time while preparing my business?
On a student visa, you can work up to 28 hours/week with “Permission to Engage in Activity Other Than That Permitted” (資格外活動許可). However, this part-time work cannot be related to managing your future business. Once you switch to Business Manager Visa status, your part-time work restrictions change significantly.
Is the Highly Skilled Professional (HSP) Visa a better alternative?
For students with advanced degrees and high-paying job offers, HSP may be easier to obtain than Business Manager Visa post-October 2025 reforms. HSP doesn’t require ¥30M capital and offers point-based assessment. However, it requires employment, not entrepreneurship. Consider this if business launch is delayed.
Can I operate as a sole proprietor instead of incorporating?
Yes, sole proprietorship is possible for Business Manager Visa, but you must demonstrate ¥30M total investment in business operations (office, equipment, employee salaries, etc.) and meet all other requirements. Most students find incorporation easier for capital documentation.
What if my business plan gets rejected during professional verification?
Work with the certified consultant (中小企業診断士, CPA, or tax accountant) to revise your plan. Common issues include unrealistic financial projections, insufficient market research, or unclear competitive advantage. Budget 2-4 weeks for revision cycles.
Can two foreign students co-found and both get Business Manager Visas?
Yes, but each must meet ALL requirements individually:
- Each needs to demonstrate ¥30M capital contribution (¥60M total company capital)
- Company must hire at least one additional full-time employee beyond the two co-founders
- Each founder must have clear, distinct management responsibilities
- Both must meet experience/education requirements
What happens to my student visa while the Business Manager Visa is processing?
Your student visa remains valid until you receive the Certificate of Eligibility (COE) and change status. Do not let your student visa expire before COE approval. If timing is tight, apply for “Designated Activities” status to bridge the gap.
