Japan’s Expanded Startup Visa: A New Era for Foreign Entrepreneurs

In a significant move to attract global talent and foster innovation, Japan is set to expand its Startup Visa program nationwide starting January 2025. This reform represents a game-changer for foreign entrepreneurs aiming to establish businesses in Japan, offering extended flexibility and a streamlined path to success.

By allowing entrepreneurs to stay in Japan for up to two years without immediately meeting traditional requirements such as setting up an office or securing substantial capital, this program removes significant barriers to entry. Here's a comprehensive look at what this means for foreign entrepreneurs, investors, and Japan's entrepreneurial ecosystem.

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What is the Startup Visa?

The Startup Visa is a specialized residency program designed for foreign entrepreneurs who wish to establish businesses in Japan. Historically, this visa was limited to certain regions and required meeting specific conditions such as securing office space or investing significant capital. The expanded program, effective January 2025, addresses these limitations, making it accessible nationwide with more relaxed requirements.

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The Connection Between the Startup Visa and Business Manager Visa

The Startup Visa and the 経営・管理ビザ (Business Manager Visa) are integral components of Japan's strategy to attract foreign entrepreneurs, each serving distinct roles in the business establishment process.

Startup Visa

Category	Details
Purpose	Facilitates the initial phase of business setup, allowing foreign entrepreneurs to reside in Japan while preparing to establish their business.
Duration	Traditionally granted for up to one year, with recent policy changes extending this period to two years starting January 2025.
Requirements	- Submission of a comprehensive business plan outlining the proposed venture. <br> - Endorsement from a Japanese municipality that supports the Startup Visa program. <br> - No immediate requirement to secure office space or invest a specific amount of capital.

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経営・管理ビザ (Business Manager Visa)

Category	Details
Purpose	Intended for individuals who will manage or operate an established business in Japan.
Duration	Typically issued for periods ranging from one to five years, with the possibility of renewal.
Requirements	- Proof of a dedicated business office in Japan (virtual offices generally not accepted). <br> - A minimum investment of ¥5 million (approximately USD 38,000) into the business. <br> - Alternatively, hiring at least two full-time employees who are either Japanese citizens or have appropriate residency status.

Transition from Startup Visa to Business Manager Visa

The Startup Visa acts as a preparatory stage, granting foreign entrepreneurs time to meet the stringent requirements of the Business Manager Visa.

Process:

1. Obtain Startup Visa: Apply through an approved municipality by submitting a viable business plan and receiving local government support.
2. Establish Business Foundations: During the Startup Visa period, set up the business by securing office space, making the necessary capital investment, and, if applicable, hiring employees.
3. Apply for Business Manager Visa: Once all requirements are fulfilled, apply for the Business Manager Visa to continue business operations in Japan.

Key Considerations:

• Municipal Support: The Startup Visa requires backing from specific municipalities participating in the program. Entrepreneurs should engage with these local governments to gain the necessary endorsements.
• Compliance: Adherence to Japanese business regulations, including taxation, employment laws, and corporate governance, is crucial for both visa types.
• Documentation: Maintaining thorough records, such as a detailed business plan, financial statements, lease agreements, and employment contracts, is essential for a successful transition between visas.

By understanding the distinct purposes and requirements of the Startup Visa and the Business Manager Visa, foreign entrepreneurs can effectively navigate the process of establishing and managing a business in Japan.

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Transition Process

Entrepreneurs can begin with the Startup Visa, focusing on preparation and planning. Once the business meets the necessary conditions, they can seamlessly transition to the 経営・管理ビザ to manage their operations in Japan.

Aspect	Startup Visa	経営・管理ビザ
Duration	Up to 2 years	1–3 years (renewable)
Business Requirements	No office or capital needed upfront	Requires office, ¥5M capital, or staff
Purpose	Preparation phase	Active management of business

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Key Features of the Expanded Startup Visa

Nationwide Access

Previously restricted to specific regions such as Tokyo and Fukuoka, the Startup Visa will now be available across Japan. This allows foreign entrepreneurs to explore opportunities in both metropolitan and regional areas.

Extended Preparation Period

Entrepreneurs now have up to two years to prepare their business plans, secure funding, and set up operations. This is particularly beneficial for startups in high-risk sectors such as deep tech, where extended planning and funding cycles are often required.

Integration of Existing Programs

The reform consolidates two prior initiatives:

1. National Strategic Special Zone Program (2015): Offered stays of up to 1.5 years but was regionally limited.
2. Startup Visa Program by METI (2018): Required proof of starting a business within one year and limited participants to specific localities.

The integration simplifies the process and extends the maximum stay to two years for all participants.

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Benefits for Foreign Entrepreneurs

Streamlined Entry into High-Growth Sectors

The program is especially appealing to entrepreneurs in cutting-edge fields such as:

• Artificial Intelligence (AI)
• Biotechnology
• Healthcare and Medical Technology

Addressing Operational Challenges

The reform addresses common barriers such as:

• Difficulty Opening Bank Accounts: Entrepreneurs can now open accounts even with less than six months of residency, following a directive from Japan’s Financial Services Agency.
• Flexible Use of Funds: Entrepreneurs can allocate capital to business growth instead of immediate operational costs.

Opportunities for Regional Revitalization

The government hopes the program will boost regional economies by encouraging entrepreneurs to establish businesses outside major metropolitan areas. This aligns with Prime Minister Shigeru Ishiba’s regional revitalization policy, which emphasizes economic development in Japan's rural and regional areas.

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How Japan is Positioning Itself as a Global Startup Hub

Focus on Deep Tech and Innovation

Japan’s government has identified deep tech industries, including AI and advanced healthcare, as strategic areas for growth. Initiatives like the planned Global Startup Campus, set to open in Tokyo post-2028, aim to foster collaboration between foreign startups and Japanese universities.

Global Competitiveness

Japan lags behind global leaders like the US and China in the number of unicorn companies (private firms valued at over $1 billion). By attracting foreign entrepreneurs and investors, the Startup Visa program seeks to close this gap.

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Why This Matters for Investors and Residents

For Entrepreneurs

The expanded visa program provides a clear, accessible pathway to starting and growing a business in Japan. Entrepreneurs can focus on building innovative solutions without being constrained by administrative hurdles.

For Investors

The nationwide scope and focus on high-potential industries present opportunities for long-term returns, particularly in untapped regional markets.

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A Seamless Path to Success

Japan’s Startup Visa program marks a pivotal shift in how the country attracts and supports foreign entrepreneurs. By offering time, flexibility, and a supportive environment, the government is laying the groundwork for a vibrant, globally competitive startup ecosystem.