Japan’s New ¥30M Business Manager Visa Rule: Why EOR Is the Smart Entry Strategy

Japan is set to implement major changes to its Business Manager Visa in October 2025. The revised rules will significantly increase the capital requirement and tighten compliance checks, raising the standards for foreign entrepreneurs who want to establish a business in the country.

Big Changes Coming in October 2025

Japan is tightening its rules for foreign entrepreneurs. Starting mid-October 2025, the Business Manager Visa will require:

¥30 million in capital (up from ¥5 million)
At least one full-time local employee
An expert-reviewed business plan
Proof of management experience or a relevant degree (still under proposal)

These reforms aim to stop “paper companies” and ensure real investment in Japan’s economy. But for startups, SMEs, and lean founders, the jump from ¥5M to ¥30M is a huge hurdle.

What This Means for Foreign Entrepreneurs

Previously, you could qualify with either ¥5M in capital or two local hires. That flexibility disappears under the new rules.

Key implications:

Entry costs rise dramatically
Renewals will also be judged under the stricter rules
Businesses without strong funding may face barriers to entry
Incorporation, banking, and hiring will take longer

Why EOR (Employer of Record) Is a Smart Strategy in Japan

Given the higher capital threshold and added requirements, EOR becomes a much more attractive tool. It gives you flexibility, speed, and compliance without immediately overcommitting.

What EOR Actually Does

An Employer of Record (EOR) is a service provider that legally employs staff on your behalf in a given country (here, Japan). The EOR becomes the formal employer, handling:

Payroll, withholding taxes, social insurance
Employment contracts, benefits, compliance with
Japanese labor law
Payroll reporting, HR administration

You retain operational control and direction of the employee’s day-to-day work.

Benefits of EOR Under Japan’s New Visa Rules

Faster market entry – hire quickly without waiting for incorporation
Lower upfront risk – avoid tying up ¥30M before testing the market
Build substance early – payroll and local traction strengthen credibility
Stay compliant – avoid mistakes with payroll and labour law
Bridge to incorporation – later migrate employees from EOR to your own entity

A Strategic Roadmap: EOR → Hybrid → Full Entity

Phase 1: Launch via EOR

Hire your first Japanese employee(s) through an EOR
Test product-market fit and build local traction
Gather proof of revenue and references

Phase 2: Prepare for Incorporation

Raise or allocate capital (aiming for ¥30M)
Engage legal, tax, and banking advisors
Set up governance, contracts, and office arrangements
Keep meticulous documentation

Phase 3: Entity Formation & Bank Setup

Incorporate a Kabushiki Kaisha (KK) or Godo Kaisha (GK)
Use operational history to pass strict banking KYC checks
Transition employees from EOR to your entity
Fully operate under your own company

Phase 4: Visa Application / Renewal

Apply or renew under the new rules with capital + employees in place
Maintain credibility through sustained operations and documentation

Best Practices for Japan Market Entry

Work with Japan-based advisors (banking, immigration, HR)
Document capital injections and fund sources thoroughly
Align EOR contracts with future migration to your entity
Present expert-vetted business plans and forecasts
Hire a credible first employee (Japanese or experienced)
Maintain strong records: payroll, contracts, bank statements

Pitfalls to Avoid

Interpreting Japanese laws without local context
Underestimating the bank’s and immigration office’s requirements and due diligence processes
Using low-cost incorporation services without a longer-term view of business objectives

Final Takeaway

Japan’s new ¥30M Business Manager Visa rule will reshape how foreign entrepreneurs enter the market. Direct entry is now riskier and costlier, but EOR services provide a tactical bridge: start operations legally, hire staff, and test the market before committing capital.

EOR is not the end goal, but a stepping stone. To survive renewals and scale, you will eventually need a full Japanese entity. Partnering with experts who understand EOR, incorporation, banking, and immigration is critical for success.

Considering Japan expansion? Talk to our Japan team today to explore EOR solutions, incorporation support, and visa compliance under the new rules.

Reach out to us at kl@linkcompliance.com / info@linkcompliance.com or fill in a simple form on www.linkcompliance.com

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a licensed legal or immigration advisor in Japan before making decisions.

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