What are the conditions for Chinese people to obtain a business manager visa for the real estate business? Check the requirements and points to note

Can I get a business manager visa for real estate business?

In recent years, the number of foreigners who want to obtain a business manager visa for the real estate business is increasing. This need is especially high among Chinese people.
In principle, even foreigners can freely purchase real estate in Japan. It is a very attractive investment target for Chinese people.
In addition, the “Business Manager” residence status (hereinafter referred to as the Business Manager Visa) is granted to foreigners who manage and administer businesses in Japan. For that reason, many people think that “investing in Japanese real estate” → “Since I’m doing business in Japan, I can obtain a Business Manager Visa.”

In fact, it is possible to obtain a business manager visa for a real estate business. However, not everyone can easily obtain a business manager visa by investing in real estate. Let’s take a closer look at the requirements and points to note for obtaining a business manager visa.

Requirements for obtaining a Business Management Visa

To obtain a business manager visa, you must meet the following three requirements:

1) Securing a place of business

You must have an independent office in Japan. A rental office is acceptable, but it must have a separate, private space. In addition, if you rent a property, the purpose of use must be “business” and not “residential.”

As a general rule, a home office is not permitted, but it may be permitted if certain conditions are met, such as the home being a detached house with a clear division between the office space and the living space.

2) Business continuity and stability

The business is required to have continuity and stability. Continuity and stability are judged mainly based on the contents of the business plan, so the business plan is a very important document in the review.
We will explain business plans in more detail later.

3) A certain business scale

The third requirement is that the business scale must be above a certain level. Specifically, the investment must be at least 5 million yen, or there must be at least two full-time employees.
However, as we will explain in more detail later, if you are obtaining a business manager visa for a real estate business, the amount required as initial costs will be significantly more than 5 million yen. You should pay particular attention to this point.

What should you pay attention to in order to meet all of these requirements? Let’s take a closer look.

Points to note when running a real estate business

When obtaining a business manager visa for the real estate business, the most important point is the scale of the business.
To obtain a business manager visa, the business that the company is trying to conduct must be of a certain scale or larger. If the business is too small, the business manager visa will not be granted.

What is the business scale required for a business manager visa?

Specifically, what is the required business scale?
For example, consider a company with one employee, a representative director, whose executive compensation is 3 million yen per year. If the business revenue is less than 3 million yen per year, the company will not even be able to cover the representative director’s compensation, and will be in the red.
In addition, running a business requires various expenses, such as property maintenance and management costs, property taxes, office rent, and social insurance premiums. To run a company continuously and stably, it is necessary to generate enough revenue to avoid a deficit even after deducting these expenses.
Let’s assume that the total amount of necessary expenses is 4 million yen. If the rate of return is 4% per year, then to earn 4 million yen in rental income, you would need to purchase a property worth 100 million yen.
In other words, to obtain a Business Manager Visa for a real estate business, you need to purchase real estate worth at least 100 million yen. Having the financial means to make this amount of initial investment is one of the conditions for obtaining a Business Manager Visa for a real estate business.

Consider combining with other businesses

If you can’t expect a stable income from real estate rentals alone, consider combining it with other businesses. For example, private lodging. This article explains private lodging in detail.

https://touch.or.jp/keiei/viza/minpaku-visa/

Other points to note①Purchasing profitable real estate

I mentioned earlier that you will need to purchase a property worth at least 100 million yen, but if you choose a property with a high yield, it may be possible to keep the initial investment amount even lower. The important thing is how profitable the property is.

On the other hand, this also means that no matter how expensive a property you purchase, if it is not profitable, it will not be viable as a business. If you are considering obtaining a Business Manager Visa, you should focus on the profitability of the property rather than its asset value.

Other points to note② Setting appropriate executive compensation

It may be tempting to think, “I want to cut expenses as much as possible, so I’ll keep my executive compensation low,” but be careful with this line of thinking. If executive compensation is too low, it will be deemed that the manager is not making a living, making it more difficult to obtain a visa.
When applying for a visa, it is considered desirable to set executive compensation at 250,000 yen per month (3 million yen per year) or more.

Other points to note③ The person in question is the actual manager

Only those who substantially participate in the management of a business can obtain a Business Manager Visa. In other words, simply being the owner of real estate does not meet the requirements for a Business Manager Visa. You must directly manage the business, not entrust the management to someone else.

Other points to note④ Outsourcing management operations

Those who obtain a Business Manager Visa are expected to devote themselves to managing the company.
The business manager himself cannot perform management tasks such as cleaning the property he owns, repairing equipment, or security. If the business manager performs such tasks himself, he will be considered to be engaging in activities outside of his status of residence (operating a business that generates income that is not included in his current residence status), and this will cause his visa to be rejected when it comes time to renew it. He will need to outsource these tasks to an outside company or hire employees.
A solid income and expenditure plan must be prepared in advance so that there will be sufficient profits even after factoring in these expenses.

Other points to note⑤ Check whether any business operations require licenses or permits

If you are buying and selling real estate or acting as an intermediary in real estate sales as a business, you will need to obtain a real estate transaction license. Be careful not to inadvertently carry out work that requires a license without a license.
Also, if you are considering a business such as private lodging, you should check in advance the relevant laws and regulations, such as the Inns and Hotels Business Act and the Private Lodging Business Act, and obtain the necessary permits.

Creating a business plan for real estate investment

So far, we have looked at the points to note when applying for a business manager visa for a real estate business. Many people may have thought that it is “surprisingly difficult.”
The business plan is emphasized when examining a visa application. In the case of a real estate business, the income and expenditure plan is particularly important.
Simply owning real estate does not mean you are running a business. You need to show with figures how much income you can make from the property you own, and whether you will be in the black even after incurring necessary expenses.
If you can create a convincing income and expenditure plan, you will be able to prove the continuity and stability of your business, and the chances of being granted a business manager visa will increase.

Please consult with an administrative scrivener to obtain a business management visa.

When applying for a business manager visa, it is important to keep in mind the key points of the examination. In particular, the business plan must be persuasive enough to convince the Immigration Bureau. In addition, the creation of articles of incorporation is thought to be very difficult for foreigners.
If you have any concerns about visa applications or company establishment procedures, we recommend that you first consult with a highly specialized administrative scrivener.