The best investment method for transitioning to a Business Manager visa?

Photo by Nick Fewings on Unsplash

What leads the success of transitioning to Business Manager Visa in Japan is a myth for not only founders but also many immigration specialists.

The acceptance of residential status depends on diplomacy and the relationship with the other jurisdiction in Japan, so it’s hard to see the clear guideline and timeline. That being said, we still want to find what makes the application successful when it comes to Business Manager visa application, one of the most difficult applications to pass. As of the end of 2020, the number of business visa holders was 27,235 that consists only 0.9% of the entire visa holders (total visa holders in 2020 : 2,887,116). [reference]

The criteria of applying for a Business Manager Visa

As all of you know, the criteria is quite traditional as of now.

  • A dedicated office space
  • 5 million JPY initial investment (or hire 2 full-time employees with stable residential status)


In order to renew it, immigration bureau closely looks at financial status of your company. The key is — the business has been “sustainably” operated.

  • Positive cash flow
  • Annual 10 million JPY revenue

These are two of the main evaluation criteria that many immigration specialists refer to. According to the latest update about Business Manager Visa criteria, immigration bureau does not turn down the applications as soon as the cash position goes negative. As long as the company has a plan to stabilize the business within a year, immigration bureau considers the business is going to be sustainable especially if you submit the renewal application along with a capital planning sheet written by a CPA (Certified Public Accountant) or a small and medium enterprise consultant.

Important note : if the cash position goes negative for two years in a row, the business is perceived as “unsustainable”.

Startup with negative cash position?

This is often the disparity between the traditional immigration guideline and the nature of “startups”. Startups sometimes go through negative operating cash flows for the first couple of months or years depending on the business model. To scale first, they target investment.

Types of investment

For early stage startups, JKISS & convertible note are the common ways to get the first round of investment. According to Ministry of Economic, Trade and Industry (METI onwards), there are mainly two types of investment for startups.

  1. Convertible Equity (= JKISS in Japan)
  2. Convertible Note

Convertible Note has been traditionally the most common way of the first round of investment, but the focus of METI is shifting over to JKISS.


If a startup receives investment via JKISS, the company books it as “Stock Acquisition Rights” according to Article 238 of the Companies Act and the guideline specified by ASBJ (Accounting Standards Board of Japan). Stock Acquisition Rights are considered as “net asset” and financially it’s positive.

According to the report from METI published on December 28th, 2020, the focus is becoming convertible equity (=JKISS).

The financial statement would be considered “good” for Business Manager Visa application (or even renewal) since the cash position stays positive.

Convertible Note

METI classifies convertible debt into three categories on their report,
1) convertible note
2) convertible bond
3) convertible loan
but all of these convertible debts are considered as “Long Term Liability” and financially it’s considered as “debt”.

Catch the wave & catch the mainstream

Photo by Oliver Sjöström on Unsplash

METI consideres the risk for founders, and the investment method with Convertible Equity is getting the mainstream of startup finance.

Japanese legal advisors and the entire system are catching up the latest investment structure, and I started to meet several investment lawyers who specialize in investment contracts.

On the other hands, immigration system itself is still built for traditional business owners and investors, and the Business Manager Visa applications for scalable startup founders sometimes go against the current criteria.

It still takes time to overcome the silo administration, but let’s hope the current wave of evolving tech startups in Japan will transform the traditional system.



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