How to Actually Relocate to Japan and Build a Japan-based Startup
Whether the world knows it or not, Japan wants to become a place where startup unicorns can be born. However, starting a company in Japan isn’t as easy as founders would like, especially if you are not from Japanoriginally and even more so if you don’t speak the language.
With all that in mind, the Japanese government made an unprecedented announcement back in July 2015 that the ystarted a program to promote startups founded bynon-Japanese if the business was built in one of the designated special strategic zones.
As with most of the announcements Japan makes to the world, it seemed amazing on the surface, but as foreign founders got into the weeds of the program, it was revealed that the government had made it harder than before to relocate to Japan and start a company.
Whether you are just starting or already have a growing business, foreign companies interested in the Japanese market look to send someone (the founder, a co-founder, an executive) to Japan to get things up and running. When we speak with founders and executives, everyone always thinks the Start-up visa is the only solution. A common misconception is that a Start-up visa is just a 6-month Business Manager visa. It is not a unique visa category from the perspective of the immigration office so while the Japanese government makes it seem like the Start-up visa is a straightforward way to bring your business to Japan, it comes with some significant complexities that can create major headaches for those who apply.
Let’s break down the process of applying for a Start-up visa:
Steps To Successfully Apply for a Japan Start-Up Visa
Like all visas in Japan, the Start-up visa requires that the applicant obtain a document called the Certificate of Eligibility (“COE”) to enter the country. This is normally the first step to any work visa, but unique to the Start-up visa scheme is a new first step where the applicant must obtain a “Confirmation Certification of Business Startup”. This adds an extra month to the already long application process for a Business Manager visa. Details of the lengthy process are written below:
Step 1: Acquiring a Confirmation Certification of Business Startup Requires You to Prepare the Following:
- Plan for Confirmation of Business Startup Activities
- Applicant’s Resume (with photo and email address)
- Documentation detailing the applicant’s place of residence for 6 months after arriving in Japan
- Passport Copy
- Bank Certification of Deposit (Transaction History)
- Signed application form
- Power of Attorney (your signature required)
- Documents of your company outside of Japan (if any)
From here a gyoseishoshi (Immigration Lawyer) will translate the documents and submit the application to the Japan Immigration Office.
Once you have your Confirmation Certification of Business Startup, you move onto Step 2.
Step 2: Acquiring a Certificate of Eligibility (COE) Requires These Actions:
- Prepare the following documents:
- COE Application Form (with photo and signature)
- Confirmation of Business Startup
- Have an Immigration Lawyer file the Application for COE to the Tokyo Immigration Office (screening time is 3 months on average).
- Once approved, the Immigration Lawyer will send your COE via overseas courier. The COE is valid for 3 months after issuance.
- Take the COE to your local Japanese Embassy or Consulate and apply for the 6-month visa
Once you have your COE, you can book a flight to come to Japan!
What To Do When You Enter Japan
Once you land at the Japan airport you present your COE to immigration, and they give you your alien registration card (zairyu card)! Congratulatoins!, you have your 6 month Business Manager Visa (a.k.a. the Start-up Visa). Unfortunately, there are still some strings attached. Since the Start-up visa is just a Business Manager visa in the eyes of the Immigration Bureau it comes with the requirement of having to lease independent office space in Japan which must be done immediately! And, the government will arrange visits to ensure you follow through on this, so you must be sure that your space is not shared office space and the lease is for at least 6 months (we recommend at least 12 months to be safe). We have joined our clients during the government visits. They are real. The truth is Japanese property owners do not want to rent space to new companies with no financial history so meeting this requirement is extremely difficult.
This 6-month period is also when your entity establishment should be completed so you can begin the next steps of opening a bank account, completing initial tax filings, and registering your company at the social insurance offices. Finally, the government also expects that you apply to renew your Business Manager (Start-up) visa before the 6-month mark to upgrade it to a 12-month Business Manager visa. All of this, including running the business, hiring staff and bringing in revenue is a LOT to do in only 6 months. At the end of 12 months, the government also expects you to be making a profit and if you are not, there has to be a good reason for it otherwise your visa may not be renewed. Most startups do not make a profit in their first 12 months of existence so yes, this point of judgement isn’t practical.
What The Start-up Visa Can’t Do
You may feel this visa scheme could be a great shortcut to enter Japan for 6 months to meet with potential clients and potentially train your first hires in person. You could even skip getting physical office space and just return to your home country once the 6 months are up, right?
The government will be often checking in on your activities and following up on the status of your physical office space and renewal for a Business Manager visa to prevent foreigners abusing this visa type.
This scheme is only meant for those who plan to relocate to Japan long-term and build their business.
The Most Restrictive Aspect of The Japan Start-up Visa
The most restrictive aspect of the Start-up visa is that once you enter Japan, the government starts a timer. You have 6 months to complete your entity setup, build substance and get everything in place.
While professionals like those working with weConnect can complete your entity incorporation very quickly (as fast as 10 business days), other providers usually cannot work this fast. We have even heard horror stories of companies who sent an executive here on a Start-up visa without having their service providers identified or even a place for them to stay. Because they weren’t organized, they missed their 6-month deadline.
What happened? Well, the visa expired, and an extension was rejected, their man on the ground had to move out of his brand-new apartment, return to his home country, and headquarters watched a very large investment get washed down the river. When they started again, it was back at square one. Trust us when we say, this is not something you want to experience.
At this point, you may be asking yourself “Is this the only way to get my Japanese work visa and start a business?”. Happily, the answer is no. weConnect has an alternative that can make the entire process shorter, easier, and ensure that you don’t have to keep jumping through hoops once you are in Japan.
How weConnect Makes It Easy
The application process for a regular Business Manager and the Japan Start-up visa is never simple. The government is very strict about which applications they approve. If you are lucky enough to get approved, you are still under scrutiny during your early operations and the timer to complete your entity establishment and meet all requirements is ticking.
Luckily, a Humanities work visa is far easier to apply for and weConnect can help you fill every requirement needed to get one. The key to this solution is having our CEO be the representative director of the company we will establish for you in Japan. Even with us as the representative director, you will control the full power of attorney of your new company in Japan and our in-house gyoseishoshi (Immigration Lawyer) can handle the visa application process in parallel of setting up your legal entity. With this creative approach, you can avoid all the headaches of the Business Manager and Start-up visa.
Those burdensome requirements to apply for the Startup visa like the “Certification Confirmation of Business Startup” and the need to contract an independent office space? Gone. With a humanities visa, you’ll be able to work from home or in engage cheaper and more flexible co-working spaces through weConnect’s network in Japan.
As an added value, we can set up a bank account for you and handle all the compliance that comes along with having a company in Japan including accounting, payroll and tax compliance. We support all our clients in native English so running your new Japanese business is completely headache free.
Feel free to contact us below to learn more.