Can a sole proprietor obtain a business manager visa?
We often receive inquiries about whether sole proprietors can obtain a business manager visa.The conclusion is yes.
When obtaining a Business Manager Visa, many people set up a company and apply for it. To set up a company and apply, you must prepare capital of 5 million yen or more, prepare the necessary documents, and apply for incorporation registration at the Legal Affairs Bureau. You will need to pay the fee to a judicial scrivener and a registration license tax (about 200,000 yen for the establishment of a joint-stock company) when registering.
Since just starting a company costs a considerable amount of money, among foreigners who wish to obtain a business manager visa, there are a certain number who wish to obtain a business manager visa as sole proprietors without starting a company.
When applying for a business manager visa as a sole proprietor
In principle, if you are a sole proprietor and apply for a business manager visa, you are limited to obtaining it through an application for permission to change your residence status. If you are applying for a certificate of residence status (so-called inviting someone from overseas), you cannot start a business as a sole proprietor. The reason is that you need an address in Japan when submitting the notification of starting a sole proprietorship to the tax office. Therefore, starting a business as a sole proprietor is limited to cases such as international students starting a sole proprietorship after graduating (student visa → business manager visa) or company employees who have been working on work visas such as technical, humanities, or international services visas starting a sole proprietorship.
The basic requirements for obtaining a Business Manager Visa as a sole proprietor are the same as those for obtaining a Business Manager Visa by establishing a corporation, and are as follows.
- An office or store for conducting business must be secured in Japan.
- The “size of the business” must meet one of the following criteria
(1) In addition to the proprietor, the business must be operated by two or more full-time employees residing in Japan (Japanese nationals, permanent residents, spouses or children of Japanese nationals, spouses or children of permanent residents, long-term residents).(2) The amount of capital or total investment is 5 million yen or more.
(3) It is recognized as being of a scale similar to that of (1) or (2). - The business license required for business operations has been obtained.
- You have filed the necessary tax documents.
- A business plan must be prepared that clearly demonstrates the stability and continuity of the business.
In the case of sole proprietors, the issue is point 2, “Scale of business,” which requires proving that “the amount of capital or total amount of investment is equivalent to or greater than 5 million yen.”
If you are a company, you can basically prove your business by depositing 5 million yen in your account as capital, but if you are a sole proprietor, you can become one just by filing a business start-up notification with the tax office that has jurisdiction over your place of residence, and sole proprietors don’t even have the concept of capital in the first place. So even if you deposit 5 million yen in your personal bankbook, it’s pretty meaningless.
If you are a sole proprietor, you will be required to actually invest 5 million yen in things needed for your business and spend it all before applying.
Specifically, this includes offices, stores, equipment, interior decoration, and purchasing goods. You will need to use up the 5 million yen or more and submit documents and receipts proving this to the Immigration Bureau. If you are running a store-based business such as a restaurant, it is relatively easy to use up the 5 million yen. However, if you are running a business that does not require much initial investment, it is difficult to use up the 5 million yen, so if you are running such a business that requires little initial investment, it is preferable to establish a company and obtain a business manager visa.
Compared to applying for a business manager visa as a sole proprietor, there is a disadvantage in that you must use up the 5 million yen of your capital investment in business-related investments and submit receipts. Since you need to prove that you have invested more than 5 million yen, this is a very time-consuming and difficult task, but it also has the advantage of keeping the costs of establishing a company down.
Finally.
It is common for many foreigners who apply for a Business Manager Visa to first establish a company before applying. In this case, the investment of 5 million yen can be deposited into a bank account in the name of the company, which satisfies the business scale requirement for applying for a Business Manager Visa, but it will cost money and take time to establish the company.
On the other hand, if you apply for a Business Manager Visa as a sole proprietor, you will have to spend the 5 million yen for your business first and submit receipts, but you will be able to keep costs related to company establishment low and you can start your business by simply submitting a business start-up notification to the tax office.
Whether you apply for a Business Manager Visa by establishing a company or as a sole proprietor, there are advantages and disadvantages to both, so make sure you fully understand them before applying.
