Japan's move to sharply raise the bar for foreign entrepreneurs is spilling beyond blocking new entrants into an exodus of existing operators. After requirements for the "business manager" residency status were tightened last autumn, those unable to clear the higher threshold appear to be shutting down one after another. Among foreigners who had run companies and restaurants in Japan, 953 closed their businesses and left the country in the first half of this year alone.
The Nihon Keizai Shimbun, or Nikkei, reported on the 2nd that its analysis of Immigration Services Agency data showed 953 holders of the "business manager" status departed Japan in the first half of 2026, from January through June, without filing for re-entry permission — 3.9 times the figure from a year earlier. Skipping the re-entry process means they wound down their businesses with no intention of returning.
The timing lines up with the rule change. The Immigration Services Agency revised the Justice Ministry ordinance setting landing criteria on Oct. 16, 2025, and departures, which had run at a few dozen a month until just before that, jumped to 114 in December of the same year. From January through June of 2026, monthly departures ranged from 100 to 200.
The cause was the agency's Oct. 16 revision of the Justice Ministry ordinance on landing criteria, which sharply tightened the requirements for obtaining the status.
New applications fell even more steeply. In the five months after the tightening, applications dropped about 96% from the preceding five months. Those seeking to enter and those already in the country reacted at the same time.
The core of the revised standard is capital. Previously, applicants needed to meet just one of two conditions — capital of at least 5 million yen (about 42.93 million won) or at least two full-time employees. Under the revision, capital of at least 30 million yen (about 257.61 million won) became a mandatory condition rather than one option.
Added on top of that are three or more years of management experience or a master's degree or higher, employment of at least one full-time worker, Japanese-language ability equivalent to level N2 of the Japanese Language Proficiency Test, and verification of the business plan by a certified small-business consultant, tax accountant or certified public accountant. Using one's home as an office is no longer accepted.
The Immigration Services Agency says the previous standard was low by international comparison, citing South Korea's requirement of 300 million won in capital for a comparable visa and the U.S. requirement of $100,000 to $200,000 (about 137.55 million to 275.10 million won).
The scale of the burden shows up in two sets of data. Tokyo Shoko Research surveyed 299 foreign-run companies operating in Japan from March 31 to April 7, 2026, and found that 45.2% said they would be affected, while 5.3%, or 16 companies, said they were considering closing.
Some 27.4%, or 82 companies, said they would meet the requirements through capital increases or other means, 11.7%, or 35 companies, were weighing a sale or merger, and 6.3%, or 19 companies, said they would hand over management to a Japanese national or permanent resident. The share considering closure was highest in information and communications at 16.6%, followed by retail at 12.5% and services at 10.1%.
By the same firm's count, of the 143,367 companies established in Japan in 2024, excluding sole proprietorships and similar entities, only 1,491, or 1%, had capital of 30 million yen or more. The structure sets as an entry requirement for foreigners a scale that puts even Japanese founders in the top 1%.
The government stresses that the aim is to clean up the system. Justice Minister Hiroshi Hiraguchi told the House of Councillors judiciary committee in June 2026 that there had been criticism that the approval standard was looser than comparable systems in other countries and was being abused as a means of migration, adding that some cases had been confirmed in screening to have no actual business substance. Holders of the business manager status numbered 46,781 at the end of 2025, 1.7 times the level five years earlier.
The Immigration Services Agency says it will allow renewals through Oct. 16, 2028, even for those falling short of the new standard, and may grant permission after that if there is a prospect of compliance. Still, some point out that scrutiny of actual business operations has grown stricter regardless of the formal criteria.
Kenji Goto, a section chief in the information division at Tokyo Shoko Research, said small companies will find it hard to meet the new standard. "When a foreign owner closes shop, the impact reaches Japanese companies as well — the wholesalers that supplied raw materials and the landlords who leased them commercial property," he said.
