Starting Your Own Business in Japan
December 17, 2014
Are you a so-called "plus one“ who came with your partner to Japan, but is itching to be something other than a homemaker? Are you keen to work but don’t know how to get legal permission? Do you have an idea for your own business but no idea how to get started? Rest assured: while it might be tricky to find your way, it is certainly not impossible.
Savvy talked to an immigration lawyer and legal advisor who helps foreign nationals in Japan to set up their businesses and apply for the appropriate visa status. She explained what’s behind the cryptic “permission to engage in activity other than that permitted under the status of residence previously granted,“ why it’s probably best for foreigners to refrain from opening a restaurant in Japan, and why she encourages her clients to give their careers a try here.
Compared with other countries, is it harder or easier here to set up a business or get a working visa?
In places like Hong Kong or Singapore it seems to be easier to set up a company. It takes about a week and requires less paperwork there. That’s why some people come to Japan and have this idea of setting up a business really easily. This is not the case. There is a lot of paperwork and many steps to go through. But once you know the procedure it is quite straightforward. If you are guided correctly, it is not too much of a hassle. It takes about one month to register a company. You have to go to the registry office which is dependent to the Ministry of Justice.
If you have specific skills as a foreigner is it easy to get a working visa in Japan?
There are different kinds of working visas. If you work as an employee, basically all you need is a university degree. In most cases you don’t even need to have professional experience if you work in an office environment. There are some exceptions like if you work as a cook, then you need to have 10 years of experience. If you work as a sports instructor, you need three years’ experience. If you work as an employee, your company will generally sponsor your visa and take care of all the paperwork for you.
What visa do you need if you want to set up your own business?
The visa for business owners is called the “investor and business manager visa.” To get one, you don’t need any degree or experience, but you need to invest at least five million yen into your company’s capital and you need to have a physical office that is separate from your home. You can apply for this investor visa after having registered your company. To begin with, you will be given a one year visa, and after that it depends on the company’s performance. If the business is doing well, you will most probably get a three year visa, but if the company is making no profit or a loss, the visa will be only extended for one year. For each renewal you need to provide your financial status.
How big of an obstacle is it if you don’t speak any Japanese?
Many of my clients don’t speak a word of Japanese, and some of them are really successful. It could help, though, if you have some experience with running a business in your home country. Obviously you don’t do all the paperwork yourself, so you need to hire someone to go through all the procedures, as it is all in Japanese. Most of my successful clients work with foreign companies overseas.
I do not see many of them having Japanese partners, because it is difficult to find the right partner who shares the same values. The difference in working cultures could be a reason for that.
What kind of business would you advise to set up?
A lot of people think that running a restaurant would be an easy thing. But that’s actually the hardest business you could ever imagine to run, because it requires a lot of investment, there is a lot of competition, and importing food products to Japan is quite complicated.
The best activity is something which does not require a huge amount of investment, like any service industry, something which does not involve making things, which would mean you need to have a warehouse. Many people engage in IT-related services; they just have these skills and provide their services. Some offer consultant services. One of my successful clients buys things in Japan and sells them overseas. I think selling to Japanese people is difficult.
If you only have a dependent visa because you came here with your partner, and yet you want to work part time, do you also need to get visa sponsorship?
No. Only if you work full time. If you wish to work part time you can apply to get permission to do so on your current visa status. It allows you to work up to 28 hours per week. You get it at the immigration office. It has got a really long name: “permission to engage in activity other than that permitted under the status of residence previously granted.” But even if it sounds quite complicated, it is actually not. And it is free. You just need to fill out the form, take your passport and residence card to the immigration office, and then you can apply.
Can you tell us about any success stories?
Definitely. A British man is doing business consulting between Japanese companies and European companies; a British and a Canadian guy are running ski lodges in Hakuba, in the Nagano region, targeting mainly foreign tourists. A French guy buys secondhand luxury bags, like Chanel, and sells them overseas. Apparently the quality of secondhand products in Japan is good, as people take good care of their items here.
What is your own experience with setting up a business?
What I really want to say is that you should give it a try. I never thought of starting my own business and when I actually did it, it was much easier than I thought. There are a lot information and tools on the internet. Even if you just stay here for a few years, what you have tried in Japan might be useful in other countries. It’s all about getting the experience. Even if it does not work in Japan, you can start already here with ideas, doing research, a bit of trial.
When I started myself I gave myself one year to see how it works and I was sure that it wouldn’t. After one year it was not really great, but I saw that things were moving forward, more people were sending inquiries, looking at my website. And the second year worked really well. So I just kept going.