Japan's Business Manager Status: What Changed, and What 2028 Means

If you are already running a business in Japan on the business manager status, the change that matters to you happened on 16 October 2025, and the date you now have to plan around is 16 October 2028. This was written on 21 August 2026, which leaves a little over two years and two months.

The difficulty is not that the change was hidden. It is that the English-language material describing this status was written before it and has largely not been rewritten. Search in English today and you will still be told that five million yen in capital, or the employment of two or more full-time staff, satisfies the criteria. That was true. It stopped being true on 16 October 2025. If your plan for the next renewal rests on that sentence, the plan rests on a repealed rule.

What follows is built on the material published by the Immigration Services Agency and the Ministry of Justice, and on the ministerial ordinance setting out the criteria themselves. Where those sources do not settle a question, this article says that they do not, rather than reasoning its way to an answer. On this particular subject the cost of a confident guess is not embarrassment; it is a criminal provision and, in some cases, removal from the country. Era years are given with the western year alongside, because the official material uses them.

What the criteria say now

The criteria live in the ministerial ordinance on landing permission criteria, under the entry for the business manager status. There are five numbered requirements. Taken together they describe a materially different status from the one that existed before October 2025.

Set that against what the criteria said until 15 October 2025 and the shape of the change is easier to see. The old capital figure was five million yen, and it stood as an alternative to employing two or more full-time staff. There was no Japanese language requirement and no requirement about degrees or years of experience. Three of the five items above therefore either did not exist or existed in a substantially lighter form eighteen months ago.

One thing this table cannot do is tell you that satisfying it produces permission. The criteria are a floor, not a formula. The substance of the business, its viability, the credibility of what you say you will do, and your record as a taxpayer and an employer are all examined, and they are examined case by case.

The second requirement is two requirements

This is the point on which the most confident English-language summaries go wrong, and it is worth stating in the flattest possible terms. The ordinance requires that both limbs of item two are satisfied. The employee and the 30 million yen. Not one or the other.

The misreading is understandable, because the previous version of the rule genuinely was a choice — capital of five million yen or two or more employees — and a reader skimming the new text for the familiar structure will find two sub-items and assume the structure survived. It did not. The wording requires that the applicant falls under both.

The practical consequence is that a business which comfortably clears one limb is not partly compliant. A company with 30 million yen paid in and no qualifying employee is in the same position, as against these criteria, as a company with a qualifying employee and no capital. Both have one limb of one requirement outstanding, out of five requirements.

The thirty million yen, and what does not count towards it

The figure is precise and so is its composition, and the composition is where money gets wasted. For a company, the 30 million yen means the paid-in capital — the amount of capital and the total of contributions. It does not include the capital reserve. It does not include other capital surplus. It does not include retained earnings, however healthy they are. A business that has accumulated 30 million yen of profit over several profitable years has not thereby satisfied this requirement.

Nor can the figure be assembled from operating expenditure. Salaries paid, rent paid on the office, equipment already bought — none of these can be added together with the capital to reach the threshold. The requirement is about the assets put into the business, not about how much the business has spent.

That distinction sounds pedantic until you look at what it implies for a company that has been trading since before October 2025. Increasing paid-in capital is a corporate procedure with company law consequences, registration consequences and tax consequences, and the route that looks cheapest from an immigration standpoint is frequently not the cheapest once the other two are counted. The sequence of company formation steps and where capital sits in them is set out in the article on setting up a company in Japan, and the mechanics of getting money into a Japanese corporate account, which is a separate obstacle with its own rules, in the article on Japanese business bank accounts.

The one full-time employee, and who cannot be counted

The first limb of item two asks for one full-time employee resident in Japan, engaged in the business, other than the person engaged in its management or administration. Two separate qualifications sit underneath that sentence, and both of them rule out arrangements that owners assume will work.

The first qualification is about status of residence. The employee counted for this purpose must be a Japanese national, a special permanent resident, or the holder of a status listed in Appendix II of the Immigration Control Act — that is, permanent resident, spouse or child of a Japanese national, spouse or child of a permanent resident, or long-term resident. Holders of statuses in Appendix I are excluded. Appendix I is where the working statuses live, so the engineer you sponsored, the specialist in humanities on your payroll, and the intra-company transferee all fall outside the count. They are your employees in every other sense. For this requirement they are not the employee.

The second qualification is about what full-time means, and it is defined numerically rather than left to ordinary usage. The employment must involve working days of five days or more, 217 days or more in the year, and 30 hours or more per week. An arrangement that satisfies two of those three and not the third does not satisfy the definition.

The Japanese language requirement, and whose Japanese it has to be

Item three is new and it is the one most often described inaccurately, usually by being made harsher than it is. The requirement is not that the applicant personally speaks Japanese. It is that either the person conducting the management of the business, or a person engaged in the business other than a part-time worker, has ability corresponding to B2 or above on the Common European Framework. The applicant must also be resident in Japan.

So the requirement can be satisfied by a qualifying member of your staff. For an owner whose Japanese is not at that level and whose business runs in English, that is the difference between a requirement that is met by hiring correctly and one that is met by two years of study.

The ways of demonstrating the ability are specified. The Japanese-Language Proficiency Test at N2 or above; the BJT Business Japanese Proficiency Test at 400 points or above; twenty years or more of residence in Japan as a medium- to long-term resident; graduation from a higher education institution in Japan; or completion of compulsory education in Japan followed by graduation from a Japanese high school. Note the shape of those last three: they are not tests, and a person who has been here long enough or was educated here does not have to sit anything.

A degree, or three years

Item four offers a genuine alternative, and here the word or is doing the work it appears to be doing. Either the applicant holds a doctoral degree, a master's degree or a professional degree, or the applicant has three years or more of experience in the management or administration of a business.

One detail is worth having. The period spent in Japan on the designated activities status for the purpose of preparing to start a business may be counted towards the three years. For someone who came through that route and has been trading since, the arithmetic may be better than expected.

What the sources we relied on do not do is set out how experience is evidenced — what documents establish three years of management, how a period of self-employment is treated, how a directorship of a company that never traded is regarded. Those are questions for the bureau handling your file.

The office

Item one requires a business office in Japan, or, where the business has not yet started, that the facility has been secured. Attached to it is a restriction that catches a great many small operators: using a residence as the business office at the same time is, as a general rule, not acceptable.

For a consultancy or a software business run by one person out of a flat, that is a direct cost with no revenue attached to it, and it is the requirement most likely to be discovered late — usually at the point where someone reads the criteria properly in the month before a renewal. If your registered office is your home address, treat that as an item on the two-year list rather than a detail.

The business plan, and who is allowed to confirm it

Where a business plan is required, the confirmation of it is not something you can obtain from any adviser. The persons who may confirm the plan are a registered SME management consultant, a certified public accountant, or a certified tax accountant. A licensed administrative scrivener who prepares your immigration paperwork is not, for this purpose, a substitute, however good the paperwork is.

This matters for scheduling more than it looks. Professionals in those three categories are not always available at short notice, and the confirmation is the kind of step that people discover they need after everything else is ready.

The transitional measure, read as it is written

Now the part you came for. There is a transitional measure, it is real, and it is narrower than the relief people describe in forums and broader than the catastrophe they describe elsewhere.

Its operative content is this. Until 16 October 2028 — Reiwa 10 — an application to extend the period of stay will not be refused for the sole reason that the new criteria are not satisfied. Three years from the date the new criteria took effect.

Read the words "for the sole reason". They are the whole of the protection and the whole of its limit. The measure disarms one specific ground of refusal. It does not convert renewal into a formality, and it does not suspend anything else that is examined at renewal.

The second half is the part that most reporting omits entirely, and it is the half that decides what happens to you. After the three years have passed, refusal is not automatic and is not applied uniformly. Where the condition of the business is good, where the obligation to pay corporation tax and similar taxes has been properly discharged, and where there is a prospect of the criteria being satisfied by the time of the next renewal, the case is judged comprehensively. In other words, a business that is trading soundly, paying what it owes and moving in the right direction is not disposed of by a rule on a date.

The periods of stay available for this status are five years, three years, one year, six months, four months and three months. Which of them you are given at a particular renewal obviously changes what the 2028 date means for you in practice — a five-year grant and a one-year grant put you in quite different positions relative to it. We were not able to find published guidance setting out the criteria on which the length of period is decided, so we are not going to describe a pattern we cannot source.

The claim the Agency has publicly denied

One sentence has done more damage than the rule change itself: that anyone who cannot put together 30 million yen by 2028 will have to leave Japan.

The Immigration Services Agency has addressed that claim directly in its published questions and answers, and its answer is that it is not true. Not softened, not qualified into unlikeliness — stated as not being a fact.

It is worth understanding why the claim is wrong rather than only knowing that it is, because knowing why protects you from the next version of it. The claim assumes that the transitional measure is a countdown with a single outcome at the end. It is not. It removes one ground of refusal for three years, and after that the assessment is comprehensive on the terms described above. A business in good condition, with tax obligations discharged and a credible prospect of meeting the criteria, is in a position the rumour does not describe.

None of which is a reason to do nothing, which brings us to the other half of the misunderstanding.

What the transitional measure does not do

The mirror image of the panic is the assumption that the measure means nothing needs attention until October 2028. That reading is as wrong as the first, and it fails more quietly, because the failure shows up at a renewal rather than in a headline.

Everything examined at renewal before the change is still examined. The condition of the business. Whether tax has been paid. Social insurance. Whether the activity you are actually carrying out is the activity the status is for. The transitional measure says nothing about any of these, because it addresses one ground of refusal and only one.

Look again at the description of what happens after the three years. The two things named explicitly are the condition of the business and the proper discharge of tax obligations. Those are not things that can be assembled in the final quarter. A renewal in, say, 2029 will be looking at a filing history that is being created now. If your consumption tax position is drifting — and the consumption tax rules themselves change on 1 October 2026, which is the subject of a separate article on the October 2026 revision — then the immigration consequence of that drift is not immediate, but it is not absent either. The two systems do not talk to each other. The immigration side does, however, look at whether the tax side has been satisfied.

Being a director in the register is not the same as holding the status

A separate confusion travels alongside this one, and it deserves clearing up because it produces expensive mistakes at incorporation.

The commercial register and the residence status system are administered by different bodies and answer different questions. The Legal Affairs Bureau decides whether a company may be registered. The Immigration Services Agency decides what activities a person may carry out in Japan. Passing the first tells you nothing about the second.

Registration itself has become markedly easier for people abroad. Incorporation is accepted even where all representative directors reside overseas, a change made by the notification of 16 March 2015 which abolished the previous treatment. Payment of capital may be made into an account in a third party's name, under the notification of 17 March 2017. A signature certificate may substitute for a seal registration certificate, under the notification of 28 June 2016. Any one of those removes an obstacle that used to stop foreign founders at the first step.

What none of them does is confer permission to manage a business in Japan. On the residence side, the Agency states in terms that merely being appointed as a director does not, by itself, mean that a person falls under the business manager status. Being in the register is not the qualification.

How the appointment is evaluated in the other direction — what it means for the residence status of a foreign national who holds some other status and becomes a director — is a question we return to below, in the section on what we could not confirm, because that is where it belongs.

Activity outside your status, and the questions we could not answer

Readers who hold this status usually have a second set of questions: about a spouse who wants to help with the business, about a friend on a work status who wants to start something on the side, about whether they can take a directorship in someone else's company. These are the questions where confident English-language answers are easiest to find and most dangerous to rely on.

Start with what is established. Permission to engage in an activity other than that permitted under the status previously granted is provided for by Article 19, paragraphs 1 and 2, of the Immigration Control Act. The application is made to the regional immigration services bureau with jurisdiction over the place of residence. There is no fee. The standard processing period is two weeks to two months, which is long enough that treating it as an afterthought does not work.

Permission comes in two forms. Comprehensive permission — the familiar one, attached to statuses such as student and dependent — allows work within 28 hours a week. Individual permission is granted for a specified activity, and the Agency's own list of examples of activities requiring individual permission includes operating as a sole proprietor. Preparation to start a business by a student is likewise given as an example of an activity falling under individual permission, not under the comprehensive 28 hours. Activities at premises of adult entertainment businesses are outside the scope of permission altogether.

One further point of structure is worth knowing because it is frequently stated backwards. Holders of statuses in Appendix II — permanent resident, spouse or child of a Japanese national, spouse or child of a permanent resident, long-term resident — are not addressees of Article 19, paragraph 1. The Agency states this expressly. Permission to engage in another activity is therefore not something they apply for, because the restriction the permission lifts does not apply to them.

Now the honest part. There are four questions in this area that we could not answer from official sources, and we are not going to answer them anyway.

Whether a person holding the engineer, specialist in humanities or international services status may run a sole proprietorship on the side: we could not find a direct official statement of the Agency's position. Whether a person on a specified skilled worker or technical intern training status may operate a business or take on side work: we found nothing official addressing it. How the appointment of a foreign national who does not hold the business manager status as a company director is evaluated for residence status purposes: not established. Whether receiving director's remuneration requires permission to engage in another activity: not established.

Those four gaps are not stylistic modesty. Here is what sits underneath them.

That is the reason for the reticence. An article that guessed on any of those four questions and guessed wrong would be exposing its reader to a criminal penalty and, at the far end, removal from Japan. The last row of that table is why "probably fine" is not a publishable answer. If one of the four describes your situation, the resolution is a call to 0570-013904 or an appointment at the bureau with jurisdiction over your address, and it costs you an afternoon.

Note also the fourth and sixth rows for a reason unrelated to side work. Item 6 revokes the status where the permitted activity has not been carried out continuously for three months or more, absent a justifiable reason. For a business manager whose business has gone quiet, that provision is closer to home than the criminal ones.

Where an article stops and the bureau or a professional starts

Much of the above is settled information a careful reader can act on: what the five requirements say, which statuses can be counted towards the employee requirement, what the numerical definition of full-time is, what does not count towards the 30 million yen, what the transitional measure protects against and what it does not. The following are not that kind of question. If any of them describes what you are trying to decide, the next step is a conversation rather than more reading.

Applying the transitional measure to your own case, which depends on facts about your business that no general description reaches. Designing how the 30 million yen is to be met, where company law, tax and immigration all bear on the same decision. Selecting the person and the employment arrangement for the full-time employee requirement, where an Appendix I status means the person does not count however genuine the job is. Deciding whether you may begin a business while holding your current status of residence — the most dangerous question on this list, and the one behind the four gaps described in the previous section. Incorporating while resident abroad and then becoming involved in managing the business from Japan, where the registration side and the residence side diverge. And anything involving director's remuneration, joint management, or holding directorships in more than one company at the same time.

Six items. The fourth is the one that produces the worst outcomes, because it is the one people feel most confident answering for themselves.

What the next two years are for

Take the five requirements in turn and mark which ones your business does not currently satisfy. Most owners find the list is shorter than they feared and different from what they expected — the language requirement in particular is often already met by someone on the payroll, and the experience requirement is often already met by the years already spent running the business.

Where the assets requirement is outstanding, treat it as a project with a lead time rather than a payment. It touches your capital structure, and it is the item least amenable to being handled in the final months.

Where the employee requirement is outstanding, check the status category of the people you already employ before you conclude that you need to hire. That check takes an hour and occasionally ends the problem.

Where the office is your home, deal with it early, because it is the one item on the list that can be solved with a signature and a monthly cost, and the one most likely to be forgotten until a renewal is imminent.

Then keep doing the unglamorous things the assessment after October 2028 explicitly names: run the business properly and pay the tax on time. Those two are not a fallback for failing to meet the criteria. They are what the comprehensive judgment is made of.

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