Is it okay if the business manager visa is renewed in the red? We are often asked this question. When renewing a business manager visa, the company’s financial situation will be subject to review in addition to your own residence status.
In other words, if your financial statements are in the red, it will have a negative effect on the renewal of your business manager visa. This page explains how to renew your business manager visa when your financial statements are in the red.
- Prove the stable continuity of your business
- Insolvency refers to a state in which a company’s total liabilities exceed its total assets. In other words, even if all of the company’s assets are sold, the debts cannot be repaid. In the case of a listed company, insolvency can lead to delisting. If the company is insolvent even when renewing its business management visa, there is a high risk of the application being rejected even if the application is submitted as is.
- When renewing a business manager visa in red
- At the end.
Prove the stable continuity of your business
One of the examination criteria for a business manager visa is “business stability.” This requires that the company can continue to operate stably and continuously in Japan. If the company is in the red, it will be determined that it does not meet this “business stability” requirement.
In the first year of starting a business, there is a high possibility that the financial statements will be in the red. This is because in the first year, expenses inevitably increase due to capital investments, and it takes time for the business to get fully on track. I feel that the Immigration Bureau often approves the first renewal application even if the first year’s financial statements are in the red.
However, if there is a deficit in the financial statements from the second year onwards, renewal permission will not be granted easily.
Particular care must be taken if the company is insolvent.
Insolvency refers to a state in which a company’s total liabilities exceed its total assets. In other words, even if all of the company’s assets are sold, the debts cannot be repaid. In the case of a listed company, insolvency can lead to delisting. If the company is insolvent even when renewing its business management visa, there is a high risk of the application being rejected even if the application is submitted as is.
Insolvency refers to a state in which a company’s total liabilities exceed its total assets. In other words, even if all of the company’s assets are sold, the debts cannot be repaid. In the case of a listed company, insolvency can lead to delisting. If the company is insolvent even when renewing its business management visa, there is a high risk of the application being rejected even if the application is submitted as is.
As explained above, if you are insolvent, it will be difficult to renew your business management visa. Whether you will become insolvent can be predicted to some extent by your business performance before the closing of the fiscal year. Therefore, it is possible to take some measures in advance. Below are two measures to avoid becoming insolvent.
Increase in capital
Since capital is treated as a company asset, there are cases where it is possible to avoid insolvency by increasing capital. However, if the amount of debt is too large, it will be difficult to avoid insolvency by increasing capital.
Reduction of executive compensation
Reducing executive compensation It is possible to reduce so-called liabilities by reducing executive compensation.
If your company’s executive compensation is too high given its circumstances, consider reducing it.
When renewing a business manager visa in red
When renewing a business manager visa in red, there is a high risk of the application being rejected if you simply submit the necessary documents published by the Immigration Bureau. Therefore, it is advisable for the applicant to submit additional documents by themselves. Below we will explain the documents that may be required when renewing a business manager visa in red.
business plan
First of all, the most common document to submit when renewing a business manager visa with a deficit is a business plan. This business plan describes the reason for the deficit, how the company will be operated in the next fiscal year, and how to make the company profitable. Of course, supporting documents should also be submitted.
A company evaluation report prepared by a small and medium-sized enterprise management consultant or certified public accountant
If the company continues to be in the red, it may be asked to submit a written evaluation by a qualified person who specializes in corporate evaluation, such as a small and medium-sized enterprise management consultant or a certified public accountant. This is a document in which a knowledgeable third party objectively evaluates the company’s management and evaluates the outlook for the company’s future operations.
In other words, if the contents of this evaluation report have a positive effect on the renewal of your business manager visa, submitting it will increase the chances that your renewal application will be approved.
At the end.
On this page, we have explained whether business management can be updated even if the company is in the red.
If it’s in the red, it will definitely be more difficult to update.Therefore, in addition to the required documents published by the Immigration Bureau,You will need to decide for yourself what documents will be beneficial and submit them.
If your financial statements are in the red, you will need to prove how you can improve your business in the next financial statements and stabilize it. Calculate your return carefully and create a business plan that you think you can objectively achieve.
Also, be careful about reducing executive compensation in order to make the financial statements profitable. In extreme cases, if you set executive compensation to 0, then it will be judged that you do not have the funds to live in Japan, so set the amount of executive compensation to 200,000 yen or more per month.
Our office supports the renewal of business manager visas, so if you have any concerns about renewal, please feel free to contact us.
