Japan cracks down on abuse of business manager visas

Japan’s immigration ministry is set to hike requirements for the business manager visa, which was intended for luring in foreign investments but has been accused of setting the bar too low.

The Immigration Services Agency announced that the capital requirement for the business manager visa will increase from 5 million yen ($34,000) to 30 million yen ($203,000) and require applicants to hire at least one full-time employee.

The ministry said it will discuss the changes with a panel of experts later in August and will introduce additional requirements within the year.

In 2015, the Japanese government replaced the investor/business manager visa with the business manager visa. It enables holders to reside in the country for up to five years and can serve as a pathway to permanent residency. 

Meant to attract foreign entrepreneurs into setting up businesses in the country, the business manager visa featured relaxed regulations, relatively low application fees, and a greater degree of autonomy compared to traditional worker visas.

While considered by many to be a success — agency figures show business manager visa holders have more than doubled since 2015 — it has also been criticized for being prone to abuse due to less oversight.

In July, a Sri Lankan national was arrested for allegedly helping others to illegally obtain visas using false corporate documents and shell companies. According to police, the suspect ran more than 600 businesses and appointed seasonal workers as fictitious presidents of these companies. 

Local media reports also highlight the abuse of the business manager visas for ‘minpakus’ or short-term private home rental businesses. According to the Asahi Shimbun, a growing number of foreigners are taking advantage of the visa’s lax requirements to emigrate to Japan through such enterprises.

"The consequences of a lax system that has permitted extended residency without adequate screening are now coming to light," Wako Asato, an associate professor at Kyoto University, said in an interview with the Nikkei news agency. "Although the visa was intended to boost the number of startups launched by foreign entrepreneurs, the program has not progressed as originally envisioned."

The issue of foreign workers has also become a major talking point during the recent upper house election in July, with both ruling and opposition politicians pushing for reforms.  

Justice Minister Keisuke Suzuki also told ministers in May that the business manager visa requirements fall short of peer programs in other countries and has ordered a thorough investigation into the matter.

According to government data, there are more than 74,863 foreign nationals illegally residing in Japan, a sharp decline from the peak of 298,646 recorded in 1993.