A Complete Guide to Business Manager Visa Renewal Requirements｜The 3-Year Grace Period and 5 Key Points

— Many business owners have probably heard news or rumors like this and feel anxious.

However, in fact, the “real reason” a Business Manager Visa cannot be renewed is not a failure to meet the new requirements.

In this article, an administrative scrivener thoroughly explains how the “3-year grace period” for existing visa holders actually works, together with the “5 key requirements” that are truly examined when deciding whether to grant a renewal. Let’s organize what you should start improving and preparing now, ahead of your next renewal.

What Is the 3-Year Grace Period?

In this way, existing Business Manager Visa holders are given a three-year grace period. The fact that you do not currently meet the new requirements does not mean your renewal application will immediately be denied.

Cases that do result in denial are those where some other problem appears to exist — for example, where the holder is not personally engaged in management activities, or is insolvent yet has presented no improvement plan. Someone who is conducting their activities properly and in accordance with the law will not have their renewal denied outright, so it is important to prepare based on accurate information.

How Things Work After the Grace Period

For applications to renew the period of stay that are filed after three years have passed from the effective date, the post-revision approval criteria must be met. In other words, for renewal applications from October 2028 onward, the new requirements must, in principle, be satisfied.

However, there is a proviso: even where the post-revision approval criteria are not met, when all of the following requirements are satisfied, the decision will be made by comprehensively considering the applicant’s other residence circumstances.

*The same treatment applies to “Highly Skilled Professional (i)(c)” (which presupposes “Business Manager” activities), since meeting the “Business Manager” approval criteria is a prerequisite for it as well.

However, the operational standards for this proviso have not yet been determined. That is, what will be assessed as a business being “in good condition,” and what will be judged as showing a “prospect of meeting the requirements by the next renewal” — these are matters that the Immigration Services Agency will define going forward and disclose as appropriate.

The 5 Requirements for Obtaining Renewal Approval

From here, we explain, one by one, the 5 requirements that are actually checked in the renewal examination. Even if you do not meet the new requirements, your renewal will not be approved unless you also satisfy the following 5 requirements.

1. Compliance with Tax-Related Laws

You must be properly paying both national and local taxes. The payment status of the following national and local taxes payable by your business will be checked.

For corporations

For sole proprietors

Any unpaid amounts among these can become grounds for denial. If any of this applies to you, please complete the payment procedures immediately.

2. Compliance with Labor and Social Insurance Laws

* For a sole proprietor who is not obligated to enroll in social insurance, you do not need to submit each employee’s National Health Insurance enrollment status. However, you must explain that you do not fall under a mandatorily covered establishment for social insurance, and you must submit the sole proprietor’s own National Health Insurance enrollment status.

Where there is non-compliance with tax-related laws, labor laws, or social insurance laws

If a failure to fulfill an obligation, or a suspicion of one, is found, the applicant will be asked by Immigration to submit, as a supplementary document, a “Confirmation of Corrective Status.” This is a document through which Immigration checks “what the situation is” with respect to matters such as taxes not being paid, labor or social insurance not being enrolled in, or amounts being unpaid. The business owner then takes action toward correction, and whether the renewal is granted will depend on the outcome of that action. There are three categories of treatment:

The specific treatment for categories (1)-(3) is redacted (blacked out) in the Immigration examination guidelines, and the details are not disclosed. As a practical inference: (1) means no problem; (3) constitutes grounds for denial; and (2) — provided you can prove that there is a reasonable reason for the non-fulfillment and that you are currently in the process of correcting it — will be treated as no problem this time, with the situation to be scrutinized at the next renewal.

3. Business Continuity

Without business continuity, a renewal will naturally not be approved. Business continuity is judged, in principle, based on your financial results. For an existing company, the criteria are as follows.

Financial situation	Treatment / required action
At the most recent fiscal year-end there is a surplus, or there is neither a surplus nor a deficit	No problem with business continuity
At the most recent fiscal year-end there is a deficit, but the company is not insolvent at the most recent fiscal year-end	A business plan and materials showing projected earnings are required
At the most recent fiscal year-end there is a deficit and the company is insolvent, but it was not insolvent at the end of the fiscal year before the most recent one	Submission of a document in which a Registered Management Consultant (SME management consultant), a Certified Public Accountant, or the like has assessed the outlook for improvement is required
At the most recent fiscal year-end there is a deficit, and the company is insolvent at both the most recent fiscal year-end and the end of the fiscal year before it	Business continuity is not recognized. (Exceptional measures may apply to emerging companies deploying distinctive technologies or services, new business models, and the like.)

If you are simply in the red (there is a deficit but no insolvency), there is no problem as long as you submit a business plan and materials showing projected earnings. If you have fallen into insolvency at the most recent fiscal year-end, you will need to be sure to submit an improvement plan and, together with it, attach an assessment document from a Registered Management Consultant, a Certified Public Accountant, or the like.

If you have been insolvent for two consecutive fiscal periods, business continuity is, in principle, not recognized. However, exceptional measures may apply to emerging companies deploying distinctive technologies or services or new business models. Rather than giving up here just because you have been insolvent for two consecutive periods, you are expected to properly submit your future business model, plans, and improvement documents.

* Where there is no gross profit in both the most recent fiscal period and the one before it

If there is no gross profit in the company’s main business — that is, if sales revenue falls below the cost of sales — this is not recognized as normal corporate activity. In principle, business continuity is judged not to exist.

4. Genuine Business Activity (Real Operational Substance)

Under the old requirements, because the bar was so low, “applications with no real management substance” — aimed at relocation or medical care — were rampant. This time, this “substance of activity” has been clearly defined in the guidelines.

If, through outsourcing operations and the like, insufficient substance of activity as a manager is recognized, the applicant is not deemed to be engaging in activities that fall under the “Business Manager” status of residence.

For example, cases where the majority of operations are outsourced externally and the applicant does not carry out day-to-day management activities themselves, or where the applicant does not grasp information they should inherently grasp as a manager — such as the specific business content and financial status — are assumed to fall under this.

5. Time Spent Outside Japan During Your Stay

If, during your period of stay, you have spent long periods outside Japan without a legitimate reason, you will be treated as having no substance of activity in Japan, and renewal of your period of stay will not be approved. This, too, has now been clarified in the guidelines.

The judgment is made according to each person’s individual residence circumstances, but as a general rule, if you have left Japan under a re-entry permit (including departure under a special re-entry permit) for a cumulative period exceeding half of your granted period of stay, then — except where there is a legitimate reason — this will be evaluated as a negative factor in the examination of your period-of-stay renewal.

These two points — “substance of activity” and “time spent outside Japan during your stay” — are extremely important. Until now, you might have been granted a renewal as long as you had invested and were doing a little management activity. From now on, however, that will no longer work at all. After investing, you must carry out management activities yourself. Buying real estate or minpaku properties, handing them over to a management company, and only helping out slightly yourself — this will not get you a renewal. Being in Japan and carrying out management activities yourself: this is the approval requirement for renewal. If you currently leave everything to a management company and have no real management substance, you will not be able to obtain a renewal as things stand, so you will need to switch to a business accompanied by real management substance.

Summary

In this article, we explained the “real reason” a Business Manager Visa cannot be renewed, along with each of the renewal requirements.

As explained, the three years until October 16, 2028 are a grace period, and even if you do not meet the new criteria, the renewal decision will be made based on your business situation, your future prospects, and other factors. Furthermore, even after the grace period ends, there is a relief provision under which, if your business is in good condition, you are paying taxes properly, and there is a prospect of meeting the criteria by the next renewal, the decision will be made by comprehensively considering your residence circumstances.

In other words, the real reasons a visa can no longer be renewed lie in fundamental rule violations such as the following:

There is no need to give up quickly and wind down your business just because “the capital is insufficient.” What matters most, above all, is to firmly fulfill the basic, obvious obligations — paying taxes and insurance, proving the substance of your management activities, and so on.

That said, the bar for the specialized responses now required has certainly risen — responding to a “Confirmation of Corrective Status” in the event of any failure to fulfill obligations, the business plan required when you are in the red or insolvent, and the submission of assessment documents from a Registered Management Consultant or the like.

If you have any concerns about your next renewal, please consult us early

If you have even the slightest concern about your next renewal, or you are unsure how to deal with a loss-making settlement, please consult a specialist early, before it is too late. Touch Immigration Law Firm, which specializes in international services, will provide support to protect your valuable business.