Tag: Economy of Japan

In response to the abuse of visa processes and cases of fraud committed by some foreigners, Japan recently tightened the rules for applying for the Business Manager Visa and also raised the capital requirement by six times, according to varied sources. To put things in perspective, the said visa was launched by Japan over a decade ago in order to attract foreign entrepreneurs who can contribute a lot to building up the national economy and create new jobs.

To get yourselves oriented, watch the English-language analytical news video of NHK World by clicking here. To put things in perspective, posted below is an excerpt from NHK’s English news report. Some parts in boldface…

Japan’s business manager residence status, introduced a decade ago to lure entrepreneurs from overseas, has become increasingly popular. More than 41,000 people held it last year.

But concerns have grown that the status was being misused as an easy path to immigration, prompting the government to tighten rules this month – including a steep increase in capital requirements.

Worries about abuse – With the number of business manager visas issued more than doubling in ten years, worries have grown that it was being misused – a view highlighted by then-justice minister Suzuki Keisuke earlier this month.

“It was pointed out that the residential status is abused by some foreigners as a means of moving to Japan, as permit standards are lax compared to the same systems in other countries.” (Suzuki Keisuke)

How have the requirements changed? – Japan introduced this visa 10 years ago to attract foreign entrepreneurs. The goal was to boost investment and create jobs. But new rules for the visa were introduced in October.

The capital requirement was raised six-fold, from 5 million to 30 million yen. That means incoming applicants will need nearly 200,000 dollars in the bank.

The rules also require companies to hire at least one full-time employee, who must be, for example, a Japanese citizen or permanent resident.

It also requires that applicants have at least three years of business management experience or hold at least a master’s degree.

Why tighten the rules? – Authorities said the capital requirement was too low. In addition, they’ve seen a number of fraudulent applications using shell companies that aren’t actually operative in the real world.

“Someone who has no intention of engaging in business activities can obtain business manager residence status as a means of immigrating to Japan. But that is not acceptable from our viewpoint. We made these changes because we believe the previous requirements were too loose.” (Ito Junji)

Over 41,000 people had business manager residence status last year. That number has more than doubled over the last decade.

Social situation in China may be one cause of the increase – More than half of the people holding this residence status are Chinese. Of course, there are legitimate applications. But the visa has also been widely advertised on social media as a means of moving to Japan.

And some Chinese residents are looking for a way to escape their country’s harsh rules. For example, Beijing’s strict lockdown policies during the coronavirus pandemic pushed people away. And China’s high-pressure “entrance exam war” is another reason why people want to leave China. They want to raise their children in Japan to avoid that kind of pressure.

Meanwhile, The Japan News (of The Yomiuri Shimbun) published an editorial about the recent tightening of rules regarding the Business Management Visa. Posted below is an excerpt. Some parts in boldface…

A status of residence originally created to help Japan’s economic growth by accepting entrepreneur-minded foreign nationals is being abused.

The system must be changed in line with its original intent, while authorities must firmly crack down on illegal residency.

The Justice Ministry has tightened the requirements for obtaining the business manager visa, a type of residence status, by revising a ministerial ordinance under the Immigration Control and Refugee Recognition Law.

This type of visa was created in 2015 for foreign nationals who launch businesses in Japan. The number of business manager visa holders has continued to increase, reaching 44,800 in June this year.

In recent years, there have been cases where foreign nationals have reportedly obtained this visa fraudulently by establishing shell companies. The Immigration Services Agency investigated 300 applications suspected of fraud and found that 90% of them had irregularities such as having no actual business operations.

It is believed that the holders of this visa in those cases have come to Japan under the guise of starting businesses with their real purpose being to bring their families for advanced medical treatment or to provide their children with high-quality education. This situation where the system’s original intent is being disregarded cannot be overlooked.

Previously, the government granted this status of residence for up to five years if applicants had an office in Japan and met either of these requirements: having capital of ¥5 million or more or hiring two or more full-time employees.

Under the revised ministerial ordinance, the minimum capital requirement has been raised to ¥30 million and it is now mandatory to hire at least one full-time employee. A certain level of Japanese language ability is another new requirement.

In South Korea, obtaining a similar visa requires about ¥32 million in capital, and in the United States, about ¥15 million to ¥30 million in capital is needed. Compared to other countries, Japan’s lenient visa criteria may have contributed to the rampant abuse.

There are other areas that need to be changed. Currently, screenings for the visa have been conducted primarily through documents alone. If illegal acquisition is suspected, why not conduct interviews with the applicants in addition to on-site inspections?

It is also important to check business operations regularly after the visa is granted. To that end, strengthening the system for immigration checks is indispensable.

Some people say that because screenings of registrations for companies and other entities have been lax in the first place, shell companies have been used as covers for money laundering and other purposes. The loose screening system must be overhauled.

As you can see in the above editorial excerpt, cases of abuse and fraud were spotted by Japan’s government already. In related to the findings, watch the China Observer YouTube video below.

The China Observer video pointed out that a lot of foreigners who applied for Japan’s Business Manager Visa before were Chinese nationals. Some Chinese nationals see the said visa as a shortcut to immigration into Japan and get away from mainland China where their lives allegedly have been hard and restrictive. It is also widely reported that China has been having serious economic problems for years now.

Going back to the Japanese authorities, the changes made on the Business Manager Visa were meant to prevent further fraud from happening, to ensure that companies have substantial operational capability, and prevent the proliferation of shell companies. Along the way, the authorities want to make certain that those who applied for the visa have at least 3 years entrepreneurial experience or have a master’s degree in business management, so that the foreigners (who secretly have no intention to contribute to Japan’s economy) can be prevented from entering.

When it comes to the abuses of the Business Manager Visa, Japanese authorities discovered cases of fraud such as some small buildings in Tokyo and Osaka had as many as fifty different company names registered with the same address, and often with no real staff present. These visa-related fraud cases only add to the endless problems Japan already has. That being said, Japanese authorities did the right thing with tightening the rules and adjusting requirements for the Business Management Visa.

Let me end this piece by asking you readers: What is your reaction to this development? Do you think that too many foreigners abused the Business Management Visa already? Did you notice any foreigners who want to migrate to Japan with a hidden agenda that would only lead to trouble? Do you think other countries should follow Japan’s example?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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