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Tokyo government eases regulations to attract foreign entrepreneurs


With a population of 14 million and a gross metropolitan product (GMP) valued at ¥93.1 trillion, Tokyo has great potential to attract entrepreneurs looking for new horizons in a bustling, global metropolis.

However, due to the language barriers, rigid governmental and immigration regulations, as well as complicated bureaucratic procedures, many foreign companies have found it difficult setting up businesses in Japan—despite growing interest.

In a bid to address this problem, the Tokyo Metropolitan Government (TMG) has launched a new support program aimed at foreign firms. The Program to Increase Foreign Entrepreneurs eases certain regulations and provides help through the entire process, in the hope of boosting the number of foreign startups in the capital.

Program to Increase Foreign Entrepreneurs

Foreign entrepreneurs wanting to open businesses in Japan are required to obtain a business manager visa, which serves as the legal permit allowing them to launch commercial operations in the country. Prior to recent amendments, in order to obtain this visa, entrepreneurs were required to either hire at least two full-time staff or invest a minimum of ¥5 million, in addition to securing an office in Japan upon their entry to the country. However, to fulfill these requirements, on most occasions entrepreneurs had to secure a business partner in Japan, complete real estate procedures for securing an office and arrange other documentation prior to their entry to Japan, which proved to be an arduous challenge.

Under the Program to Increase Foreign Entrepreneurs, which officially launched on January 29, 2016, prospective foreign enterprises who meet all requirements provided by TMG will be given a six-month preliminary business manager visa. This allows them to start commerce in Japan under the condition that within six months the company fulfills the requirements needed to obtain the visa. The short-term permit also provides companies time to complete the required documents, get settled and grow their business without undue pressure while they are in Japan. The visa will be renewed at the end of the period, provided the project is progressing smoothly and that all conditions have been successfully met.

Furthermore, applicants may use a legal proxy, such as approved lawyers or certified administrative scriveners, to apply for the preliminary visa.

Business Development Center Tokyo (BDCT)

To apply for a preliminary business manager visa, potential startups are requested to submit an application for confirmation of business startup activities, a plan for confirmation of business startup activities, resume, copy of applicant's passport, a document that can clarify where the applicant will be residing for six months after coming to Japan and other items necessary upon request. Although these forms must be submitted in Japanese, TMG has set up a bilingual consultation center, the Business Development Center Tokyo (BDCT), located in the capital’s Akasaka area, which provides free individual consultations on topics concerning the business development, application procedures and Japanese business etiquette and customs. The center further provides support for family-oriented issues, including real estate, healthcare and education. The BDCT can also introduce specialists in various areas, such as lawyers, translators, certified social insurance consultants and others.

Working in tandem with BDCT, the Tokyo One-Stop Business Establishment Center (also in Akasaka), serves as a unified hub for all administrative divisions one needs to access for bureaucratic procedures, such as labor, health and pension insurance, immigration, taxes and others. While previously, entrepreneurs had to visit separate venues to complete each procedure, this center unifies all departments into a single place to visit for all professional advice and support with documentation, making the process faster and smoother. The center can help file all initially required documents, including certification of articles of incorporation, company registration and notification of incorporation, taxes, social security and more at the business startup stage.

Additional advantages for setting up business in Tokyo

Foreign companies launching business in any of Tokyo’s five Special Zones for Asian Headquarters— Shinjuku station, central Tokyo/waterfront, Shinagawa-Tamachi and Shibuya station areas, as well as vacant sites around Haneda airport—can benefit from approved tax incentives. Starting a business in these special zones also makes startups eligible to apply for TMG's subsidy program for expenses related to hiring new personnel (up to 50 percent of all actual expenses incurred in setting up the company, to a maximum of ¥5 million per company), as well as free business consulting services, support in renting offices at a reduced rate, and other services.

Goals for expanding foreign business presence

At present, Tokyo is home to 2,300 foreign-affiliated companies, approximately 69 percent of all foreign firms in the country. By expanding and continuously improving support for foreign companies, TMG aspires to attract a minimum of 500 companies by the end of fiscal 2016. By enabling economic cooperation between foreign and domestic or Tokyo-based companies, TMG's ultimate goal is to promote Tokyo as the lead city for the establishment of foreign headquarters in Asia and boost Japan's economy to a whole new level. The Tokyo Metropolitan Government is introducing various benefits for foreign businesses who are interested in expanding to Japan.  

For more information, please visit: Program to Increase Foreign EntrepreneursBusiness Development Center Tokyo and Tokyo’s Special Economic Zones

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The article does not actually say what the new PIFP requires, or the conditions that have to be met; according to the website, it just seems to be a 6 month deferral on compliance with the old visa requirements. No improvements to banking and finance, import/ export and customs procedures, real-estate, personnel. It was never really hard to set up a business in Japan, the challenge was running it!

4 ( +4 / -0 )

Well said @ Wanderlust

3 ( +3 / -0 )

There are so many other Asian hubs where it is possible to do many procedures from outside the country first. Why waste time in Japan.....

2 ( +2 / -0 )

Issue free pass to the couples with young children from Singapore and Israel.

0 ( +1 / -1 )

It isn't the lack of foreign entrepreneurs that is hurting Japan, but the lack of Japanese entrepreneurs. If it is too difficult for Japanese to start businesses in their own country, what hope to foreign entrepreneurs have? Japanese are less than one-fifth as likely to start a business than an American. And if no new businesses are created, neither are the jobs and revenue the the businesses generate.

5 ( +5 / -0 )

I need the Tokyo government to lend me 15 million yen to start up my burger restaurant.

2 ( +2 / -0 )

I started a business in Japan 16 years ago (still going) and I agree with Wanderlust. Additionally a 6 month deferral for the visa is not enough. This should be 1-2 years and should be predicated on producing a workable business plan and maintaining some investment requirements. In most cases 6 months is not enough time to conceive a business and turn it into an operation capable of remaining in business for a long time.

It is not really that difficult to start a business in Japan. I think it is good the Tokyo Government is doing this and I think the best thing they could do is talk to some of us that have actually done this and we can provide input as to what the specific challenges are/were for foreigners wishing to do business here.

Some of the biggest challenges (as already pointed out) are banking, real-estate and the overly onerous customs procedures. I never found the personnel issue much of a challenge however.

In the end it is a positive thing they are actually trying to do something.

2 ( +2 / -0 )

Good comments, everyone. I've been running my business for nearly 20 years, and I actually like things hard to set up. You think I want a million competitors?

0 ( +0 / -0 )

Im currently in a Catch-22 with this, wherein having 5M yen in a Japanese account is required for this visa, but opening a bank account in Japan requires a real visa or residence status. I'll have to dig into the links to see if there is a solution

0 ( +0 / -0 )

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