“Many people want to start a business in Japan with a friend.”
To do so, they need a residence status known as the Business Manager Visa.
That naturally raises an important question: when applying for a Business Manager Visa, how does the fact that the business is jointly managed affect the application? Or is it something you do not need to worry about at all?
What You Will Learn from This Article
In this article, you will learn the following points.
- How Business Manager Visa applications are handled in cases of joint management
- The points examined, key precautions, and example countermeasures when applying for a Business Manager Visa under joint management
- Examples of obtaining a Business Manager Visa through joint management
I Want to Run a Business Jointly
(1) Key Issues
How are Business Manager Visa applications handled when two or more foreign nationals jointly manage a business?
For example, there may be cases where multiple foreign nationals establish a company together and each wishes to obtain a Business Manager Visa, or where someone is newly appointed as an executive of an already operating company and wants to obtain a Business Manager Visa. In other words, there are various situations in which someone may want to obtain a Business Manager Visa through joint management.
With that in mind, below we explain what points are examined when multiple foreign nationals who jointly started a business each assume an executive role and apply for a Business Manager Visa, together with key precautions and examples of how to address them.
The following explanation is based on documents prepared by the Immigration Services Agency in October 2022 and revised in April 2023.
(2) How Cases Are Handled When Two or More Foreign Nationals Jointly Manage a Business
Substantive Participation
To qualify for the “Business Management” status of residence—in other words, to obtain a Business Manager Visa—the foreign national must be substantively involved in the management or administration of the business (hereinafter simply referred to as “management, etc.”).
Specifically, this refers to activities such as making important decisions regarding business operations, or engaging in the execution or auditing of the business.
Therefore, simply holding an executive title is not enough to obtain a Business Manager Visa.
A Reasonable Basis for Multiple Foreign Nationals to Engage in Management, etc.
In addition, when multiple foreign nationals are engaged in business management, each person’s activities must be recognized as having a reasonable basis for multiple foreign nationals to manage the business in order for each of them to qualify under the “Business Management” status of residence.
The key factors in determining whether such a reasonable basis exists are the scale of the business, workload, sales, and similar factors. In practice, the decision is made by considering the specific duties each person will perform, the amount of compensation to be paid in their capacity as an executive, and other relevant circumstances, in order to determine whether their activities truly constitute business management or administration.
On this point, newly established companies are often small in scale, which means that satisfying this requirement can be difficult.
Clarity of Each Person’s Duties
Another required condition is that, with respect to duties related to business management, the content of the work each foreign national will engage in must be clearly defined.
For example, if a company has multiple executives, there should be a clear division of responsibilities, such as an executive in charge of HR and general affairs, and another in charge of finance.
There is an important point to note regarding the Business Manager Visa here. If the responsibilities of multiple executives are vague and not clearly separated, and the duties performed by multiple executives overlap, the risk of visa denial increases.
One simple way to avoid this risk is to clearly distinguish the duties assigned to each executive.
Receiving Compensation
To improve the likelihood of obtaining a Business Manager Visa, it is also advisable to satisfy the condition that each foreign national will receive compensation as consideration for duties related to business management. We recommend maintaining compensation of at least ¥250,000 per month for each executive.
Standards in Cases of Joint Management
Putting the above ideas into more concrete terms, the standards are as follows.
- Considering factors such as the scale of the business and the amount of work involved, there must be a reasonable basis for each foreign national to engage in the management or administration of the business
- For duties related to business management or administration, the content of the work each foreign national will engage in must be clearly defined
- Each foreign national must be paid compensation for duties related to business management or administration, and similar conditions must be satisfied
If the above conditions are met, it is possible to determine that each of the foreign nationals qualifies for the “Business Management” status of residence.
(3) Example Countermeasures by Pattern
Based on the above, below are further examples of countermeasures depending on the makeup of the management team.
A. Joint Management by One Foreign National and One Japanese National
- The total amount of capital and investment must be ¥30 million to satisfy the requirement
- It is preferable for the foreign national to invest in a way that gives them substantive management control
(For example, by holding at least two-thirds of the voting rights)
B. Joint Management by Two Foreign Nationals
- Each person needs to invest at least ¥15 million
- The investment amounts should be approximately equal
- The division of management roles and profit distribution should be clearly defined, and decision-making authority should not be overly concentrated in one person
Reference: Two Specific Examples
Examples of obtaining a Business Manager Visa through joint management
[Case 1]
Foreign nationals A and B each invested ¥5 million and established Company X in Japan, an import miscellaneous goods business with capital of ¥10 million. A is a specialist in overseas transactions, including customs clearance procedures and import-export operations, while B is a specialist in quality control, inventory management, and accounting for imported goods.
A assesses Company X’s business operations from the perspective of overseas transactions, while B evaluates them from the perspective of imported goods management and accounting. The management policy is decided jointly through consultation between them as co-managers.
The compensation of A and B is paid out of business profits in proportion to their respective investment amounts.
[Case 2]
Foreign nationals C and D jointly established Company Y in Japan, a transportation services business with capital of ¥14 million, with investments of ¥6 million and ¥8 million respectively. After setting separate regions of responsibility for the transportation service, C and D each took charge of their own assigned region and independently managed business operations in that area.
The overall management policy of Company Y is decided jointly by C and D through consultation, and the compensation of C and D is paid out of business profits in proportion to their respective investment amounts.
Conclusion
Here is the essence of this article.
- In cases of joint management, the screening standards for a Business Manager Visa are by no means lenient. For example, you must explain why there is a reasonable basis for multiple foreign nationals to engage in management.
- You need to pay close attention to investment amounts, management control, and the division of roles.
