Navigating the Status of Residence “Business/Management” in Japan

Attaining “Business/Management” Through Collaborative Investment

We frequently receive inquiries about joint ventures involving two or more foreign nationals, each of whom seeks to secure the Status of Residence “Business/Management.” Below, we outline a scenario involving joint investments.

In cases where multiple foreign nationals jointly initiate a business without additional employees and each aspires to serve as a board member, it’s crucial to understand that merely holding the position of a board member does not automatically guarantee eligibility for the Status of Residence “Business/Management.” This is because this particular Status of Residence necessitates active involvement in the management and administration of the enterprise.

For each foreign national’s activities to qualify for the Status of Residence “Business/Management,” it must be substantiated that there are legitimate grounds for multiple foreign nationals to engage in the management or administration of the business. This determination is made through a comprehensive evaluation that considers factors such as the business’s size, the nature of the work involved, the anticipated executive compensation, sales projections, and other relevant aspects.

The Immigration Services Agency has provided illustrative cases where such arrangements are considered acceptable:

Case 1:

Foreign nationals A and B each invest 5 million yen in the establishment of X Corporation, which boasts a capital of 10 million yen. A specializes in overseas transactions, including import/export operations and customs clearance procedures, while B excels in quality and inventory control of imported goods and accounting. A evaluates Company X’s business situation concerning overseas trading, while B assesses the management of imported goods and handles accounting matters. The management policies are jointly determined, and the remuneration of A and B is sourced from business profits in proportion to their respective investments.

Case 2:

Two foreign nationals, C and D, invest 6 million yen and 8 million yen, respectively, to jointly establish Company Y, capitalized at 14 million yen. They delineate regions of responsibility for providing transportation services. C oversees operations in one region, and D manages another. The overarching management strategy for Company Y is collectively decided by C and D, and their remuneration is derived from business earnings in proportion to their individual investments.

Navigating Business Establishment and Management for Foreign Nationals in Accordance with Japanese Law

For foreign nationals to successfully set up and operate a business in Japan, compliance with a variety of rules is necessary. This entails adherence not only to the Companies Act but also the Immigration Control and Refugee Recognition Act, due to considerations related to residency status. Specifically, a deep understanding of the Immigration Control and Refugee Recognition Act is imperative. Consequently, it can be challenging for foreign nationals to embark on business ventures in Japan compared to their Japanese counterparts.

Nonetheless, RSM Shiodome Partners boasts extensive experience, having assisted more than 100 foreign nationals annually in establishing companies. We have also aided numerous foreign nationals from Asia, Oceania, Europe, and the Americas in acquiring work statuses such as Status of Residence “Business/Management” and ” Engineer/Specialist in humanities/International services.” RSM Shiodome Partners offers comprehensive support to foreign national entrepreneurs in Japan, encompassing services related to company establishment, Status of Residence applications, accounting and taxation, personnel and labor affairs, and legal matters.