Photo/Illutration Justice Minister Keisuke Suzuki addresses the Lower House’s Judicial Affairs Committee on April 16. (Takeshi Iwashita)

The Immigration Services Agency will hike requirements for the business manager visa, which aims to lure entrepreneurs but is accused of setting the bar too low.

It will increase the capital requirement to 30 million yen ($203,000), up from 5 million yen at present, and require holders to employ at least one full-time worker.

“I have instructed that the appropriateness of the 5-million-yen requirement be examined thoroughly, taking into account the actual situation of the system and similar overseas systems,” Justice Minister Keisuke Suzuki told the Upper House’s Budget Committee in May.

The Immigration Services Agency will discuss the changes with a panel of experts this month. It aims to amend the ministerial ordinance and introduce the new requirements within the year.

The business manager visa is designed to attract entrepreneurs and sharpen Japan’s international competitiveness.

However, its requirements have been relatively lax compared with those of other countries. Some visa holders have done little more than launch a “minpaku” apartment rental, opening the system to allegations of abuse.

Therefore, the decision was made to tighten the requirements, multiple government sources said.

A holder of the visa can remain in Japan for periods ranging from three months to five years. They are allowed to bring family members, and they can renew the visa when it expires.

Currently, the requirements include securing a business office, and either “having capital of 5 million yen or more” or “employing two or more full-time staff members.”

The changes would hike the capital requirement to “30 million yen or more” and make it mandatory to hire “at least one full-time employee.”

Japan wants to bring in highly skilled foreign personnel. By tightening the visa requirements it may become less attractive, so exceptions will be allowed.

For example, holders of two classes of visa--the startup and future creation individual visas--will be able to transition to the business manager visa under current criteria.

The startup visa is granted as part of the foreign entrepreneurial activity promotion program approved by the economy ministry. The future creation individual visa is available to graduates of world-class universities who come to Japan to look for a job or conduct entrepreneurial-type preparations.

The government has looked at how countries do it. The sources said many countries expect applicants to be flush with cash.

South Korea requires a minimum capital of 300 million won (32 million yen), the United States $100,000-$200,000 (15-30 million yen) and Singapore SG$100,000 (11 million yen).

In 2015, the Immigration Services Agency renamed the investor/business manager visa to business manager visa to attract highly skilled workers.

Since then, the agency has relaxed the regulations. For example, business manager visa holders are no longer required to manage companies with foreign capital, and funds raised by sales of shares can now be included in the capital requirements.

Depending on how it is looked at, the visa has been a success. Agency figures show the number of people holding a business manager visa more than doubled over 10 years, from about 18,100 at the end of 2015 to 41,600 by the end of 2024.

But abuses came to light. Paper companies were repeatedly discovered, including in July when Kanagawa prefectural police cracked down on Sri Lankan nationals fraudulently acquiring the visa.

Political will for change came easily. There was a focus on foreign residents during this year’s ordinary Diet session, which closed at the end of June. Voices from ruling and opposition parties alike called for a review of the visa requirements, saying that the entry cost of 5 million yen was too low.

It was pointed out that a growing number of Chinese nationals have taken advantage of the lax requirements for the visa by establishing a “minpaku” short-term accommodation rental business and emigrating to Japan.

However, there has been no surge in Chinese visa holders when broken down by nationality. Chinese nationals account for roughly half of them, holding steady at 48-53 percent over the past decade.

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