Business Management Visa Requirements (1): Eligibility for Status of Residence
In this article, we will explain one of the requirements for a business manager visa, the eligibility for status of residence (activity content).
1. What is a business manager visa?
A business manager visa is a type of work visa established to enable foreigners to engage in business management work. Because business manager visas are subject to the Ministerial Ordinance on Criteria for Landing Permission (Article 7, paragraph 1, item (ii) of the Immigration Act), the eligibility of status of residence and conformity with the Ministerial Ordinance on Criteria for Landing Permission are verified during the immigration examination,
Below, we would like to explain the status of residence of business manager.
2. Eligibility for status of residence of a business manager visa
The Immigration Act stipulates the activities of a business manager visa as “Activities to operate business of international trade or other businesses, or to engage in the management of those businesses, in Japan.” “Trade” is just an example, so “Activities to operate […] businesses […] in Japan” (operation category), and “Activities […] to engage in the management of […] businesses, in Japan” (management category) are the activities of a business manager visa.
Thus, there are 2 categories of business manager visas: operation activities and management activities. Business manager visas are granted to foreigners who engage in activities of either type.
Activities “to operate business of international trade or other businesses” means activities conducted by a person who substantially participates in the business management (i.e. an officer engaging in the determination of important matters concerning the business operation, in the execution of business, or in the implementation of audits). More specifically, they are the operation of business by an officer such as the representative director, a director, or corporate auditor in case of company.
“To engage in the management of […] businesses” means activities as a staff member to engage in the management work of internal organizations that are equivalent to or higher than company departments. More specifically, it refers to the activities to manage business activities of a department as a manager of the department (e.g., a general manager, factory manager, and branch manager).
There are no restrictions on the content of the business under a business manager visa, but as a matter of course, the business must be carried out properly. In addition, business management activities must be carried out in a stable and continuous manner. For these reasons, (1) business adequacy and (2) business stability and continuity are required for the status of residence of a business manager visa.
In the next section, we will explain these requirements.
3. Business adequacy
There are no restrictions on the type of business as long as it is legal in Japan.
However, if you plan to carry out business that requires a license, you must obtain the required license. For example, if you are conducting an accommodation business, you must obtain a business license based on the Hotel Business Act. If you are running a restaurant business, you must obtain a restaurant business license.
In addition, if you wish to hire staff for your business, you need to join labor insurance and social insurance.
Moreover, it is naturally required to have a legitimate route for commercial transactions for the business activities of purchasing and selling raw materials and products, etc. This is because the status of residence should not be granted to anyone who engages in illegal black-market trade.
4. Business continuity and stability
Since the status of residences in general are granted for continuous activities during the period of stay, continuity of activities is required for any status of residence. In case of business manager visas, it is required to carry out business management activities continuously, so the business must be something that can be carried out continuously. The stability and continuity of business (which means that the business stably generates profits and is continuously carried out) are highly valued in the examination pertaining to business manager visas. Since the immigration bureaus make judgements based on the business plan, etc., it is no exaggeration to say that the contents of the business plan determine whether permission for a business manager visa will be given.
The business plan must include details of the business content (proposed sales products, potential business partners, etc.), expected sales and profits obtained from business activities, expenses required to generate profits, etc. By such business plan, it must be proved that the content of business to be carried out is concrete, rational, and feasible.
In addition to such business plan, there are other types of information which can support the stability and continuity of the business. For example, if a foreigner who is about to apply for a business manager visa has business experience or has graduated from a higher education institution majoring in business administration studies, the stability and continuity of his/her business is expected to be higher than that of those who do not have such backgrounds. This is because if a foreigner has experience in business management or majored in business administration studies, it is presumed that he/she has the sufficient knowledge for management, which leads to the evaluation that he/she has ability to continue business in a stable manner. Therefore, it is recommendable to actively submit materials to support such facts.
A business manager visa can be granted not only when starting a new business, but also when taking over a business that is already in operation in Japan. In such case, you need to submit a financial report as a material that shows the continuity and stability of your business, but you need to be careful in the case of a deficit settlement.
In particular, if your company become insolvent (i.e. a state in which the debts exceeds the assets), you must submit a corporate evaluation report regarding the prospect of improvement in its financial situation made by a person with official qualifications such as a SME management consultant or CPA. To resolve insolvency and survive as a company, it is of course important to increase profits by improving business activities, but in a short term, capital increase by issuing new shares, debt exemption, debt equity swap (i.e. trading shares for bonds), etc. can be considered. In any case, if your company is insolvent, you must proactively demonstrate the prospect of your company’s business continuity from multiple perspectives.
Unlike other work visas, academic backgrounds and experience are not required for the operation category of business manager visas. Therefore, even those who have no management experience can challenge.
Having said that, if you do not have any experience in management, the credibility of your activities will easily be doubted. In such case, the specificity and feasibility of your business plan greatly affect the examination, so it is important to prepare with specific plans of how to start a business before applying for the visa.
In addition to the requirements described above, business manager visas are subject to the requirement of conformity with the Ministerial Ordinance on Criteria for Landing Permission.
For the requirement of conformity with Ministerial Ordinance on Criteria for Landing Permission, please refer to “Business Management Visa Requirements (2): Ministerial Ordinance on Criteria for Landing Permission”.