What Happens to the Status of Residence When Accepting a Foreign National as a Director?

When an existing Japanese company accepts a foreign national as a director or other officer, or at the branch manager / department manager level, it considers obtaining the “Business Manager” Visa.
To have a foreign national obtain the Business Manager Visa, the key point is whether they are substantially participating in the operation or management of the business. If they hold only a title while their work content is no different from that of an ordinary employee, they must obtain a general work visa.

This article explains, when making a foreign national a director of a company, whether the Business Manager Visa or a work visa is required.

The status of residence for a director is “Business Manager”

When a Japanese company hires a foreign national as an employee, there are many cases where it has them obtain the “Engineer/Specialist in Humanities/International Services” status of residence, a general work visa; but when accepting a foreign national as a director, the “Business Manager” status of residence is, as a rule, required.

The “Business Manager” status of residence is required when carrying out activities to operate trade or other businesses in Japan, or to engage in the management of such businesses.

Generally, it becomes necessary when a foreign national establishes (starts up) a company within Japan, but it is also necessary when participating in the management of an already-established company or engaging in the management of a business.

Requirements for an officer to obtain the Business Manager Visa

When a foreign national aims to obtain the Business Manager Visa in order to start a business within Japan, the scale of the company to be established and similar factors are given importance.

On the other hand, when a foreign national assumes a position as a director or other officer of an already-established company, whether there is a necessity to have that foreign national assume the position of director or other officer also becomes a point of review.

Cases where an investment of 30 million yen or more is made

In cases where a foreign national makes an investment of 30 million yen or more into the company, acquires a majority of the issued shares, and assumes a position as a director or other officer of the company and engages in activities, there is a high likelihood of being judged to be substantially “operating the business.”

Note that, even if an investment is made, if no activities are actually carried out, or the activities are limited, they will no longer be judged to be substantially “operating the business,” so please be careful.

Cases where an investment of 30 million yen or more is not made

These are cases where the foreign national themselves does not make an investment of 30 million yen or more, but is invited to an existing Japanese company as a “hired president” or an “external director.” In this case, it is a major prerequisite that the company itself satisfies the scale described below (capital, etc. of 30 million yen or more); in addition to that, the reasonableness of “why is it necessary to go to the trouble of bringing in that foreign national as an officer?” is strictly reviewed.

In addition, the following requirement must be satisfied.

Requirements to note in connection with the October 16, 2025 (Reiwa 7) revision of the permission criteria for the “Business Manager” status of residence

As of October 16, 2025 (Reiwa 7), the permission criteria for the “Business Manager” status of residence were revised.
To obtain the Business Manager Visa, the following requirements must be satisfied.

When an existing Japanese company accepts a foreign national as a director or other officer, these requirements must also be satisfied; below we explain specifically what points to be careful about.

Capital or investment of 30 million yen or more

When accepting a foreign national as a director or other officer, the capital, etc. must be 30 million yen or more.
In the case of a Joint-Stock Company (Kabushiki Kaisha) it is the amount of capital, and in the case of a Limited Liability Company (Godo Kaisha) it is the total amount of investment, that must be 30 million yen or more.

Previously, capital, etc. of 5 million yen was sufficient, but it has been substantially increased.

If, at the time of accepting a foreign national as a director or other officer, the capital, etc. is not 30 million yen or more, you must immediately increase the capital or request investment from that foreign national.

The applicant satisfies the career or academic background requirement

The foreign national assuming the position of director or other officer must satisfy one of the following requirements.

Employment of one or more full-time employees

The company must employ one or more full-time employees.
And this full-time employee must be one of the following: a Japanese national, a Special Permanent Resident, a Permanent Resident, a spouse of a Japanese national, a spouse of a Permanent Resident, or a Long-Term Resident.

Japanese language ability of either the applicant or a full-time employee

The foreign national assuming the position of director or other officer, or a full-time employee, must have a considerable level of Japanese language ability.

If a full-time employee is a Japanese national or a person who satisfies this requirement, there is no problem even if the foreign national assuming the position of director or other officer does not have Japanese language ability.

Confirmation of the continuity of the business

When accepting a foreign national as a director or other officer of an existing company, whether that company can continue its business into the future is reviewed.
Specifically, if there is a surplus at the most recent fiscal year-end, or if there is neither a surplus nor a deficit, the business is recognized as having continuity.

On the other hand, if the company is in a state of insolvency, it is necessary to undergo an evaluation by a third party holding a public qualification recognized as having the ability to perform corporate evaluations, such as a Small and Medium Enterprise Management Consultant or a Certified Public Accountant.

Fulfillment of obligations as a business operator

The existing company is required to properly fulfill its obligations as a business operator.
Specifically, these are as follows.

Securing of a place of business

The place of business is required to satisfy the following requirements.

You must have a place of business appropriate to the scale of a company with capital of 30 million yen or more.
Please note that a home-cum-office arrangement is basically not recognized.

Points to note when assuming an officer position at an existing company and obtaining the Business Manager Visa

When a foreign national assumes an officer position at an existing company, the Business Manager status of residence is required.
However, assuming an officer position does not automatically mean falling under the Business Manager status of residence. Business Manager is a status of residence for cases where a foreign national is “substantially participating” in the operation or management of a business.

Specifically, it is necessary to be involved in

and the like.

If a person is merely given the title of director or other officer but does not exercise such authority, they cannot obtain the Business Manager status of residence, so caution is required.
In addition, the points introduced below also need to be considered.

Whether the assigned duties are clear

In the case of a large company, there is often a portfolio of responsibilities set for each director, such as the human resources division or the finance division. In this case, clearly state the area in charge.
On the other hand, in a small company, there may be only a few directors and the division in charge may not be clear; but even in such cases, the work content must be clearly indicated so as not to be regarded as a director in name only.

Note that even calling it a small company, unless it is of a scale of about 10 or more employees, there is a possibility of being judged that there is little necessity to newly appoint a foreign national as a director. In this case, you must specifically describe the necessity of having that foreign national engage in activities as a director.

Whether the volume of assigned duties is appropriate

The point is whether the person routinely performs duties as a director or other officer.

If the person is merely given the title of director or other officer but spends most of their time engaged in the same duties as other employees, or does not even come to work at the company in the first place, they cannot be said to be engaging in activities as a director or other officer, and therefore cannot obtain the Business Manager status of residence.

In the case of small and medium-sized enterprises, it is common for directors and other officers themselves to be involved in the same work as other employees. When a foreign national works in this manner, even after assuming an officer position, it may be necessary to take the approach of keeping them on the “Engineer/Specialist in Humanities/International Services” status of residence, a general work visa.

Because “Business Manager” and “Engineer/Specialist in Humanities/International Services” can only be obtained one or the other, if you are unsure which is appropriate, consult an Administrative Scrivener, a specialist.

The flow up to obtaining the Business Manager Visa

When an existing company accepts a foreign national as a director or other officer, the following two patterns can be considered.

In the former case, an application for permission to change the status of residence from “Engineer/Specialist in Humanities/International Services,” etc. to “Business Manager” is required.
In the latter case, the “Business Manager” status of residence is newly obtained.

In the case of an application for permission to change the status of residence (recruitment of domestically residing personnel)

When making your company’s foreign employee a director or other officer, the company’s management holds discussions with the person and decides on the work content.
The key point is not merely to have them assume the position of director, but also to clearly decide the assigned duties and have that foreign national substantially participate in the operation or management of the business.

Once the discussions with the person are settled, after going through a resolution to appoint the director at a shareholders’ meeting, you apply for the officer change registration for the director appointment.

After that, you make an application for permission to change the status of residence to “Business Manager.”

The application for permission to change the status of residence is basically made by the person themselves, but because there are many required documents and the review is strict, you should receive the support of an Administrative Scrivener, a specialist.

In the case of a new “Business Manager” status of residence application (recruitment of overseas-residing personnel)

When inviting a foreign national residing overseas and making them a director or other officer, first, the company’s management holds discussions with the person and decides on the work content.
Once the discussions with the person are settled, after going through a resolution to appoint the director at a shareholders’ meeting, you apply for the officer change registration for the director appointment.

After that, you make a new application for the “Business Manager” status of residence.

This procedure may also be carried out by the company on behalf of the person, but because there are many required documents and the review is strict, it is most reliable to entrust it to an Administrative Scrivener, a specialist.

For obtaining the Business Manager Visa, please consult an Administrative Scrivener

When a Japanese company accepts a foreign national as a director, a change to or new application for the Business Manager Visa that conforms to the latest ministerial ordinance is indispensable. However, the hurdles are by no means low—such as proving substantial participation in the operation and management of the business, capital of 30 million yen or more, and confirmation of the business plan by a specialist.

There are many cases that are difficult to judge, such as “We will have them become a director, but they also concurrently serve as an officer of the company in their home country, so their volume of duties in Japan is limited,” or “We are unsure whether to obtain the Business Manager Visa or a work visa.”

If you aim to reliably obtain a visa under the current law with its stricter requirements, please consult an Administrative Scrivener, a specialist. At Administrative Scrivener Corporation Touch, in a free consultation we carefully listen to each client’s situation, propose the optimal status of residence, and provide our full support all the way through to the completion of acquisition.