From 5 million yen to 30 million yen: Japan’s business visa hike pushes foreign entrepreneurs to look elsewhere

Japan’s tougher visa rules are forcing more foreign business owners to rethink staying in the country as visa costs rise and Japan faces a labour shortage. New regulations that took effect on Thursday raised the cost of a business manager visa from 5 million yen (US$31,666) to 30 million yen, South China Morning Post reported.

The permanent residency fee has also increased 20 times to 200,000 yen. Applicants now face additional requirements, including an annual income of 5.75 million yen, higher pension contributions and Japanese language requirements.

953 foreign nationals in Japan who previously held business manager visas left the country in the first half of this year, almost four times the number recorded in the same period a year earlier. Applications for business manager visas also fell 96 per cent in the five months after the changes were announced.

Sarah, a British business owner who has lived in Japan for more than 10 years, said she and her husband are now bringing forward their plans to leave.

“We have always had a dream of setting up a godo kaisha [the Japanese equivalent of a limited liability company], but these changes mean that it is out of reach now,” Sarah said. She did not give her real name due to concerns about possible complications during her next visit to the immigration office.

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“To operate our business as a godo kaisha, we would need either permanent residency or a business manager visa, and the new regulations make either of those hard to get,” she said.

Why Japan is tightening the rules

Prime Minister Sanae Takaichi had made tackling the growing number of foreign residents a key issue in her manifesto ahead of the February general election, which her ruling Liberal Democratic Party (LDP) won by a landslide.

Takaichi said the changes were aimed at addressing concerns and feelings of “unfairness” and ensuring policies towards foreign nationals are orderly.

Officials have said the higher visa fees are necessary because previous figures were too low compared with other countries.

However, economists warn that the tougher rules could make it harder for Japan to attract foreign workers at a time when the country faces a falling birth rate, an ageing population and labour shortages.

“There is a lot of frustration among small business operators and managers, people who have come to Japan to build a business but now face far higher capital requirements and are leaving,” said Martin Schulz, chief policy economist for Fujitsu’s Global Market Intelligence Unit.

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“It was already difficult to find these people because the yen is weak and wages are low in comparison with other countries, and firms are going to struggle even more to attract talent,” he said.

Foreign business owners also say immigration enforcement has become stricter. Andy Lunt, owner of the Shin-Hinomoto izakaya bar in Tokyo’s Yurakucho district, said his business had been raided twice and two employees were taken away.

“They are checking up on people’s papers a lot more, and the message I’m hearing is that Japan is not going to tolerate this any more,” Lunt said.