Japan's Business Manager visa — the residence status foreign nationals use to run a company in Japan — was overhauled on October 16, 2025. The capital requirement jumped six-fold from 5 million yen to 30 million yen, and new requirements for full-time staff, Japanese language ability, and management experience were added. Existing visa holders must also adapt under a transition period that ends on October 16, 2028. This guide goes beyond the visa rules themselves and looks at the money: how a 30-million-yen capital base changes your taxes, the true cost of the mandatory full-time employee, and the exit taxes if renewal fails — all based on official sources.
What Changed on October 16, 2025: Old vs. New
The Immigration Services Agency promulgated the amended ministerial ordinance on October 10, 2025, effective October 16. Under a policy of approving "only management activity with substance," the requirements changed as follows.
| Item | Old standard (until Oct 15, 2025) | New standard (from Oct 16, 2025) |
|---|---|---|
| Capital / total investment | 5 million yen or more, or 2+ full-time employees | 30 million yen or more AND at least 1 full-time employee (both now mandatory) |
| Eligible full-time employees | (one of the alternative requirements) | Limited to Japanese nationals, special permanent residents, permanent residents, spouses of Japanese nationals, spouses of permanent residents, and long-term residents. Foreign staff on work visas do not count |
| Japanese language | No requirement | The applicant or a full-time employee must have level B2 or higher on Japan's language framework (JLPT N2 or above, BJT business Japanese test 400+, etc.) |
| Background | No requirement | A doctorate, master's, or professional degree related to business management, or 3+ years of practical experience managing a business |
| Business plan | Submission only | Must be reviewed and confirmed by a specialist such as a certified SME consultant, CPA, or licensed tax accountant |
| Office | Secure an independent office | Same, and using your home as the office is no longer accepted in principle |
Transition period: existing holders have until October 16, 2028
Applications filed before the effective date are examined under the old standards. Those already residing under the Business Manager status get a three-year transition period (until October 16, 2028), during which renewals are judged by a comprehensive assessment of business performance and the likelihood of meeting the new standards. After the transition period, the new standards apply in principle.
Renewals also come with stricter checks on tax payment and social insurance contributions. Unpaid taxes or social insurance premiums now translate directly into visa-renewal risk.
How 30 Million Yen in Capital Changes Your Taxes
In Japanese tax law, the amount of stated capital itself is a threshold in several places. The same business pays measurably more tax in the 30-million-yen era than it did when 5 million yen was enough.
1) Consumption tax: no exemption period at all
A company incorporated with capital of 10 million yen or more is a consumption-tax-paying business from its very first fiscal year (the "new corporation" special rule). Companies under 10 million yen can normally start with up to two exempt years, but a company with 30 million yen in capital gets no exemption period.
The classic Japanese incorporation technique — set capital at 9.99 million yen and put the rest into capital reserves — does not work here, because the visa requirement is based on "the amount of stated capital or total investment." You cannot have both the visa and the exemption. Plan from day one as a taxable business and compare the simplified vs. standard consumption tax methods.
2) Local inhabitant tax (per-capita levy): 180,000 yen a year even in the red
The per-capita levy of corporate inhabitant tax is a fixed cost determined by your capital. In Tokyo's 23 wards (50 or fewer employees), it is 70,000 yen a year for capital of 10 million yen or less, but 180,000 yen a year for over 10 million up to 100 million yen — an extra 110,000 yen every year, profitable or not.
3) Registration tax at incorporation: 150,000 yen → 210,000 yen
The registration and license tax for incorporating a kabushiki kaisha is 0.7% of capital (minimum 150,000 yen). At 5 million yen you paid the minimum; at 30 million yen it is 210,000 yen. A godo kaisha (minimum 60,000 yen) also pays 210,000 yen at this capital level.
4) SME tax breaks survive
On the other hand, most small-business tax benefits use a threshold of "capital of 100 million yen or less," so they remain available at 30 million: the reduced 15% corporate tax rate on income up to 8 million yen, immediate expensing of assets under 300,000 yen, and deductible entertainment expenses up to 8 million yen a year.
Estimate: extra tax burden going from 5 million to 30 million yen in capital (kabushiki kaisha in Tokyo's 23 wards)
- Registration tax at incorporation: 150,000 yen → 210,000 yen (+60,000 yen)
- Inhabitant tax per-capita levy: 70,000 yen/yr → 180,000 yen/yr (+110,000 yen/yr)
- Consumption tax: no exempt years. With 20 million yen in net sales under the simplified method (category 5), expect roughly 1 million yen a year from year one
* Consumption tax varies greatly by industry and method. Figures are rough guides.
The True Cost of One Full-Time Employee
The new standard makes hiring at least one full-time employee mandatory. Social insurance and wage trends are what make this expensive.
- Companies must enroll in social insurance: both the full-time employee and the owner drawing director's compensation join health insurance and employees' pension. The employer's share is roughly 15% of pay.
- Cost benchmark: one employee at 250,000 yen a month (3 million yen a year) costs about 3.45 million yen a year including the employer's social insurance share.
- Minimum wages keep rising: the recommended national average minimum wage for fiscal 2026 is 1,176 yen (+55 yen), so the wage floor climbs every year. Minimum wage and social insurance expansion are moving together, making a "cheap single hire" harder each year.
- The hiring pool is limited: only Japanese nationals, permanent residents, long-term residents, and similar statuses count. Staff on ordinary work visas (such as Engineer/Specialist in Humanities) do not, so recruiting and managing in Japanese is the practical premise.
How much you pay yourself also shifts the balance among corporate tax, income tax, and social insurance. See how to set director's compensation and how corporations interact with social insurance premiums.
The Source of the 30 Million Yen Is Also Scrutinized — and Taxed
Parking money in an account temporarily to "show" it will not pass. Examiners ask how the funds were formed (earned, gifted, or borrowed), and each answer has different tax consequences.
- Borrowed money is not capital: capital must be equity with no repayment obligation. A balance built with loans does not satisfy the requirement.
- Gifts from family can trigger Japanese gift tax: if relatives fund your investment after you start living in Japan, the way you receive it can make it subject to Japanese gift tax (above the 1.1-million-yen annual exclusion). Whether it is taxable depends on the donor's and recipient's residence, visa status, and where the assets are located — check the gift tax exclusion rules and how Japan taxes foreigners' gifts and inheritances in advance.
- Loans to your own company are different: money you lend the company after incorporation is a liability, not capital. Converting it to capital requires registration and a registration tax (0.7% of the increase, minimum 30,000 yen).
For the full breakdown of incorporation costs themselves, see the cost of setting up a company in Japan.
If Renewal Fails: The Taxes on the Way Out
If you cannot realistically meet the new standards by October 16, 2028, there are three broad options — and each comes with its own tax bill.
Option 1: Increase capital to meet the standard
Raising an existing company's capital to 30 million yen incurs registration tax on the increase (0.7%, minimum 30,000 yen), and once capital exceeds 10 million yen the per-capita levy bracket rises. Budget for the heavier consumption tax and inhabitant tax after the increase.
Option 2: Switch to another residence status
Changing to a work status such as Engineer/Specialist in Humanities/International Services is possible, but those statuses are for being employed — you generally cannot keep running your own company. That means resigning as director (see the retirement-pay taxation below) and considering transfer or succession of the business.
Option 3: Close the company and leave Japan
Winding up and returning home triggers taxes in this order:
- Dissolution and liquidation: corporate tax filings continue until liquidation is complete. When residual assets are distributed, the portion exceeding stated capital is treated as a deemed dividend subject to withholding.
- Director's retirement pay: taking retirement pay before liquidation can reduce the burden via the retirement income deduction and half-taxation — but directors with 5 years or less of service do not get the half-taxation, which limits the benefit for short-stay exits. See how retirement pay is taxed and the retirement pay take-home tables.
- After departure: if you keep Japanese real estate as a non-resident, you must appoint a tax agent (foreigners and Japanese real estate taxes). If you leave holding 100 million yen or more in securities, Japan's exit tax on unrealized gains may apply (taxes for wealthy foreigners moving to Japan).
A clean tax record is a renewal asset: transition-period renewals are a holistic review. Beyond the financials, examiners check whether corporate tax, consumption tax, inhabitant tax, and social insurance have been paid. Even in a cash crunch, avoid falling behind on taxes and social insurance — and if payment is genuinely difficult, apply for a payment deferral with the tax office or pension office first. Protecting your tax record protects your visa.
What to Do Today
What to do today
- Pull your company's registry certificate, confirm the current stated capital, and write down the gap to 30 million yen plus your status on the employee, language, and background requirements
- Verify that corporate tax, consumption tax, inhabitant tax, and social insurance are all paid up (clear any arrears before a renewal application, or book a payment consultation)
- Count back from your visa expiry date and schedule a meeting with a tax accountant and immigration specialist to choose your route: capital increase, status change, or wind-down
FAQ
Q. Can I keep capital under 10 million yen for the consumption tax exemption and still get the Business Manager visa?
A. No. The visa requires stated capital or total investment of 30 million yen or more, so the classic technique of capping capital at 9.99 million yen with the rest in reserves is incompatible. A 30-million-yen company pays consumption tax from its first fiscal year.
Q. I already hold the Business Manager visa. Do I need to raise capital to 30 million yen immediately?
A. There is a transition period until October 16, 2028, during which renewals are judged holistically on business performance and the likelihood of meeting the new standards. Note that tax and social insurance payment records are checked more strictly than before, so clearing any arrears comes first. After the transition period, the new standards apply in principle.
Q. Can the full-time employee be a foreign national?
A. Yes, if they are a permanent resident, special permanent resident, spouse of a Japanese national, spouse of a permanent resident, or long-term resident. Staff employed on ordinary work visas such as Engineer/Specialist in Humanities/International Services do not count.
Q. Can I fund the 30 million yen with a loan?
A. No. Capital must be equity with no repayment obligation; loans or temporary "show money" do not qualify, and examiners require documentation of how the funds were formed. If the money comes as a gift from family, check whether Japanese gift tax applies before you receive it.
Sources
* This article is general information. For decisions on your own taxes or residence status, consult a licensed tax accountant, immigration specialist, or the tax office. Rules and figures may change with future amendments.