(Uploaded 2025/10/8)

Impact of the tightening of Business Manager Visa requirements on taxes

Many foreign entrepreneurs residing in Japan acquire a Business Manager Visa and run their businesses in Japan.
Until now, the requirement for obtaining a Business Manager Visa was to have capital of JPY 5,000,000 or more for the corporation established in Japan.
However, under the new system, the requirements are expected to be capital of JPY 30,000,000 or more, and the employment of at least one full-time employee.
This change is scheduled to be implemented in October 2025.
Now, this change will also result in modifications from a tax perspective because the amount of capital affects several taxes.

1. Registration and License Tax (Tōroku Menkyozei)
The Registration and License Tax is the tax paid to establish a company. This is a one-time tax paid upon establishment, not an annual payment.
The tax amount changes depending on the amount of the company’s capital. Also, most companies choose either a Kabushiki Kaisha (KK) or a Gōdō Kaisha (GK), and the tax amount changes depending on which one is chosen. If the capital was JPY 5,000,000, the tax is JPY 150,000 for a KK and JPY 60,000 for a GK (The calculation method for the Registration and License Tax is 0.7% of the capital amount, but the minimum amounts differ between a KK and a GK).
If the capital is JPY 30,000,000, the tax will be JPY 210,000 for both a KK and a GK.

2. Corporate Resident Tax (Hōjin Jūminzei)
A portion of the Corporate Resident Tax is incurred regardless of whether the company is profitable or in deficit. For a company with 50 employees or less, if the capital is JPY 10,000,000 or less, the annual amount is about JPY 70,000 (this varies slightly depending on the company’s location).
On the other hand, if the capital is JPY 30,000,000, the company must pay about JPY 180,000 annually. This is the minimum tax incurred to maintain the company.

3. Consumption Tax (VAT)
The rules regarding consumption tax are complex, but there are companies that must pay consumption tax and those that do not.
Generally, newly established companies often do not have to pay consumption tax for about two years.
However, one of the cases where the obligation to pay consumption tax arises is based on the amount of capital.
Among newly established companies, if the capital is JPY 10,000,000 or more, the obligation to pay consumption tax arises.
In the context of the Business Manager Visa, while there was often no consumption tax liability when capital could be JPY 5,000,000, the requirement of JPY 30,000,000 or more in capital will automatically create an obligation to pay consumption tax.
The amount of tax required will depend on the company’s sales and expenses, but this will fundamentally be disadvantageous for the company.

Summary
The tightening of the Business Manager Visa requirements in Japan has an impact on taxes.
I have covered the Registration and License Tax, Corporate Resident Tax, and Consumption Tax.
All of these taxes fundamentally have a negative impact on the company.
Furthermore, though not mentioned here, the requirement to employ a full-time employee means the company will also have to bear a portion of their social insurance premiums in addition to their salary.
In short, the tightening of the Business Manager Visa requirements will increase the company’s financial and time burden.