How to Start a Company & Get Business Manager Visa in Japan - My Story
Hi everyone! A lot has happened since I last uploaded. The Japan news series that I was working on kind of withered away as I came to the realization that talking on the spot does not come natural to me In the same way as writing a script of the kind that you are listening to right now. In this video I would like to take the time to explain what has happened since I graduated from my university, which the brightest of you can probably already guess from the title. So, about the entrepreneur visa. If you are only interested in the process of actually acquiring the entrepreneur visa you can skip ahead, to hear all the juicy bureaucratic details. For all of you who are interested in my story, I will say: Get a drink and sit back, as this will be a doozy.
So yeah, I ended up starting a company in Japan and managed to get the entrepreneur visa allowing me stay here at least one year. The so-called journey from student visa to entrepreneur visa was not a straightforward one, so in order to get the full picture we need to go all the way back to 2020 march, to the time when I graduated. Having enrolled in the Yokohama City University for four years was an experience in itself and if you’re interested in my honest opinion about if it was worth it you can watch this video here. Anyway, as is the custom for senior year students, we had already started the job-hunting phase called “shukatsu” and 90% of graduates already had a job lined up for them during the march graduation ceremony. Well, I was in the 10% bracket. It is not that I hadn’t participated in this “shukatsu” ritual.
I had gone to job-hunting conferences, sent resumes, babbled at interviews and so on. Yet I hadn’t received a single job-offer. Due to my interest in economics and finance I largely applied to companies in the banking and financial sector. I participated in many company events and were invited to some interviews but never proceeded to the so-called final interview. The reason for this lack of success could have been my conflicting viewpoints about the Keynesian model or just me as a person, but nevertheless the reality soon dawned on me that I was not going to be salaryman.
As the student visa was only effective for the time of me being enrolled at the university which was until march, I had to find a way to extend it – or fail and go back Finland, which honestly wouldn’t be too bad except for the winter. The idea of starting my own company was something that had been in the back of my head during the last year at university, but looking at the requirements for getting the entrepreneur visa I quickly gave up on the idea. I only had a few months of my visa left without a solution in sight on how to extend it.
Luckily my university had an short-term answer to my predicament, in something that is called “tokutei katsudo” visa or translated “special activities”. In this case, the special activities consisted on looking for employment. This special activities visa system is usually available for foreign students who by the time of graduation have still not managed to find a job, and the visa is granted for six months with an option to extend it once by another six months, meaning you will have a total of one year to find a job or pack your bags. So, me being the prime candidate for this visa, decided to apply. To apply for this visa I needed to submit documents proving that I had been looking for a job in Japan, a letter of recommendation by my seminar teacher and a written guarantee of a third party.
On top of this I had to write a report every two weeks about my progress on job-hunting. It was around this time that I fell into this limbo where I didn’t have the motivation to work for a company but couldn’t either get myself to start working towards the entrepreneur visa. So a few months went by with me withdrawing to my small apartment, playing dark souls the board game and sending half-assed job-hunting reports every two weeks. Time passes, summer turned to fall and my special activity visa was about to expire.
Having still no job-offers it wasn’t a difficult choice to apply for another 6 months extension for the special activity visa, which I did, and which was granted to me. Slowly but surely however the pressure of whether I can stay in Japan was starting to creep in and I couldn’t escape it into dark souls anymore. The final straw was my girlfriend, who gave me a proverbial much needed firm kick to the buttocks in order to finally get me moving. It was during this time in the fall of 2020 that I decided to try to meet the requirements for the entrepreneur visa and apply. I still didn’t explain what those requirements were so here they are: First, you need to have a registered company in Japan. It doesn’t matter what type of company, as long as it is lawfully registered.
Second, you need to have a designated office space for the company. Third, you need to either A) Hire two full-time employees or B) Put 5 Million yen of capital into the company. And lastly, you need to provide a business plan with a clear business model that can be confirmed to be viable economic-wise. These are roughly the requirements for entrepreneur visa, but what I didn’t know at first is that these requirements are not absolute.
The devil is in the details and depending on those details, it seems that some of these requirements can be more or less severe. I will go over each of these requirements and explain how I think I got over them. So continuing the story, I had now decided to try to meet these criteria and apply. At this time I was on the second and last extension of my special activity visa, which allowed me stay in Japan for the time being – given of course that I kept sending more and more half-assed job-hunting progress reports to my university faculty staff. I wouldn’t have been able to prepare for the entrepreneur visa if I were in Finland, unless of course I hired some 500$/hour legal representative which probably wouldn’t have been feasible. Although I have to say that I was considering on hiring a legal representative specialized in helping foreigners apply for the entrepreneur visa but ended up going at it alone after hearing that his assistance would have set me back a modest 8000 dollars.
So, about the requirements. The one that I was always discouraged by most was the two employees or 5 million yen requirement. Usually when you start a business you can’t even pay for your own salary for the first year or two, let alone two full-time employees, to whom you have to pay the minimum salary along with the social benefits each month. That was not possible, so I decided to focus on scraping together the 5 million yen capital. To gather this capital I sold a large chunk of my crypto investments and being the responsible adult that I am, maxed out the student loan debt. I should also mention that when you put capital into your own company it is not the same as owning that capital personally.
But I will get to this point later own. Anyway, having cleared this hurdle I now set my sights on registering the company and finding an affordable office space. This was also a big problem as I couldn’t afford to rent both an apartment to live in and another one for office, not to mention that I didn’t need a dedicated office space anyway, as the business that I was trying to start was video productions. All I needed was my camera and a computer to edit with (although I can’t deny the extensive amount of gear that I have bought ever since). So, trying to save a penny I decided to look for a SOHO apartment, meaning it would serve both the purposes for living and working. But can you get an entrepreneur visa with a SOHO apartment? Well, actually no… But actually yes! Let me explain Depending on the website and the person who I talked to I would get different answers to this question.
You remember earlier how I mentioned that the devil is in the details? Well this was one of those devils. Gathering information, I still couldn’t get a final answer, but many sources claimed that depending on the type of company and the apartment, it is possible to get an entrepreneur visa with a SOHO apartment. The requirement for getting an entrepreneur visa with a SOHO apartment seems to be that you have to be able to separate the space you use for living from the space that is going to be your office.
The office also has to look like an office and have a company sign board to indicate the presence of an office. The apartment contract also needs to include the words “SOHO allowed” and the rental contract must be signed on behalf of the company you registered as opposed to you as an individual. So being the cheapskate that I am, I decided to take my chances… I actually took it a bit further by asking my university fellow non-salaryman friend if he wanted to be roommates, thus reducing the rent burden even further.
He took on the offer and together we set off to search for an apartment. So, two unemployed guys searching for an apartment in Japan… with one being a foreigner. Should be a piece of cake, right? Not quite. On top of the fact that we weren’t quite the ideal type of a tenant I had a strict criteria for the apartment so I could have a fighting chance to get the visa. First, the apartment had to have the words “Use for SOHO available” in the contract, which is pretty rare in Japan. I actually had a lengthy discussion with the real-estate agent about why so many landlords don’t want to rent their apartments for SOHO use and the reason seems to have something to do with wanting to separate private living quarters from the hectic work life.
In addition to this, the apartment needed to have enough rooms so that I could designate one room as the company office space. This room also needed to be different from the room that I sleep in. My roommate also had his criteria and obviously we wanted separate bed rooms – so the scope for the apartment we were looking for quickly turned into a single family sized house. I also had to sign the rental contract using the company name, which meant that I had to first register the company into legal existence.
Strangely enough registering the company aka the legal incorporation was probably the easiest part in this whole adventure. No need for a guarantee this time, although I had to submit a bunch of legal documents which if I remember correctly were: The application for registering a company, the articles of incorporation – this document is basically the judicial rules for the company. I decided it best to have a legal specialist take a look at this document which cost me around 50$. Although I later found out that the registration bureau offers free consultation in these matters. Then there was a document about registering a company specific stamp, because Japan is still a stamp culture country, A document about the capital provider, document about the breakdown of the capital and a proof of funds, and that was pretty much it. The registration fee for the type of company I registered which is 合同会社 or LLC was six hundred dollars and it took about a week to complete the process.
I should also mention that depending on the type of company you register the paperwork, and the registration fee will differ. All the documents were of course in Japanese and I would think it to be quite a nightmare to try to register a company here if you don’t speak Japanese or have someone to help you. So I was doing the company registration while searching for an apartment, and after being laughed at during the first few open house sessions, we lucked out in finding a desperate landlord who had had the house empty for over a year now.
The house was in the condition you would expect a house to be when no-one had lived or cleaned there for over a year, so we felt bold enough to do some negotiating about the rent. In terms of our criteria the house was just right, as it had the necessary written exception to allow SOHO as well as many rooms and I could have one room designated as the company office. Once I got the confirmation that the company registration was complete and the landlord’s agents had verified our backgrounds and bank accounts, we signed the contract. Another requirement met. Or at least in theory. The annoying part about applying for the entrepreneur visa is that you have to gather the capital, register the company, find an office and only then you can apply – meaning that should you get a refusal you will end up wasting a hefty sum of time and money.
But escaping reality and blocking this quite likely outcome from entering my thoughts I carried on with the process. So first we had to move to the new apartment. Figuring it would probably be best to hire a moving company I asked a few companies for a quote on the price.
Long story short, hiring a professional is expensive so why not do it yourself with a rental car which you then crash into a utility pole. Sure. After the moving day, we still had to come into terms with the fact that the landlord had refused to clean the house, which could have been a revenge for our aggressive negotiation tactics so we had the pleasance of cleaning the house every day for the first two weeks in order to get it into human accommodable state. Having now successfully registered the company and signed a SOHO rental contract, I decided to shape my newly founded business into a little bit more representable state before actually submitting my entrepreneur visa application. In addition to the visa application , I now had new mandatory paperwork to submit to the tax and city officials, so I might as well talk a few words about that. I would guess its similar in other countries, but after starting a new company in Japan you have to submit the application of “starting a new company” to the tax office as well as join the social security programs at the local pension and city office.
You also have to decide on the amount of your salary as the CEO. The higher the salary, the higher the monthly pension and health insurance costs are going to be, so obviously I wanted to set my salary as low as possible. I had heard someone mention that applying for the entrepreneur visa with a salary under 180,000 yen would cast suspicions, as the immigration bureau would think it isn’t enough to cover your living expenses.
Although the real reason just might be that they want you to pay. Still, wanting to increase my chances for success I decided to go with a salary slightly above this amount. As I mentioned earlier, having 5 million yen is not the same thing as having a company with 5 million yen in capital. Having a company you are obliged to report taxes every year which might include information on how you have been spending this capital. As a video production company, I could write off expenses related to video making but it would be difficult to explain to the tax officials if I had to use the company cash to visit maid cafes. On top of this when I pay my own salary every month, I have to pay for my health insurance and pension in a way that the company pays for half and me as an individual pays for the other half.
Also a child support fee, even though I’m pretty sure I don’t have children This leftover amount is then finally income taxed which I pay as an individual. So advice for everyone who has any money and just wants to enjoy it, don’t start a company in Japan. While I was doing all of this social security extravaganza, I also started purchasing gear for video making and building a work-station to my SOHO office. When I had researched about the possibility of obtaining entrepreneurship visa with a SOHO office, many sources claimed that the office room should be office-like. When I asked the immigration bureau worker about what it means to be “office-like” he couldn’t specify beyond that, but I'm pretty sure I got the idea Also, I heard that you had to have a company signboard so I ordered one from amazon and put it on the door - so now my roommate could see that this is where my headquarters was located. To apply for the entrepreneur visa I still had to prepare a business plan which explained the business model and proved that it would be viable.
To make my infant company look just a little bit more legit I also started to work on creating my own company website and by working on I mean searching for someone who I can pay to work on the website. I eventually found someone on a site that’s similar to Craigs list but the web designer went M.I.A before actually finishing the website… I also had a few clients here and there, which I could then show-off in the business plan to convince the immigration bureau that there indeed was demand for my business. For the business plan document itself there is no designated form and it’s completely up to you to make the business plan from the scratch.
I didn’t have any experience writing business plans so I searched for a template online which I then filled and asked my girlfriend to proof-read it for me. I will put the template link in the description, in case anyone is interested. Having the business plan ready which meant that I should now have everything I needed to submit the application for the entrepreneur visa. There was also a requirement to submit a document that detailed the company financial statement of the previous year but as one year hadn’t passed from starting the company, instead I needed to write to a Statement of reason for why I couldn’t submit this document...
Other documents I needed was the Company registry of records that you receive after registering the company, all pages from my SOHO apartment contract and photos of the company office from multiple angles. To be exact I didn’t at first know that I needed to submit all of the pages from the apartment contract or pictures of the office, so after initially submitting the documents I got mail from the immigration bureau asking me to send these additional documents, which I did. It was quite nice of them to allow me to amend the application, instead of just a straight-up cold refusal.
3 weeks go by and I receive a letter from the immigration bureau asking me to bring my passport, the certificate of submitting the documents, 4000 yen revenue stamp and the letter itself. This was the same kind of letter that I had received in the past which indicated that the application had been successful, but I didn’t want to get crushed by disappointment, so I headed to the immigration bureau while trying to manage my expectations. There the actual moment of receiving the visa was quite anti-climactic. After giving the documents to the official he gave me a number to wait in line.
I waited for a 10-15minutes, and then “here’s the visa, goodbye”. But this was the moment I was striving for. Although the visa itself is valid for only one year, and each year you have to make a new application and prove that you are still viable as a business and have been paying your social security and taxes, for the moment I could relax I’m thinking of applying for a permanent residency some day so I don’t have to keep doing this application dance every year but this application has its own complicated requirements and different kind of devils in the details.
Maybe if I ever get the permanent residency I'll make another video about that Anyway, this story is already way longer than I initially intended it to be, so I hope that you learned something about the entrepreneur visa or found the story amusing. Have a great day and I’ll see you in the next video.
2021-04-24 12:45
