What Happens to Your Highly Skilled Professional Status if Your Company Faces Bankruptcy in Japan?#

The Highly Skilled Professional (HSP) status of residence is a system designed to attract talented foreign nationals who are expected to contribute to Japan’s economic growth. This status is granted to individuals who meet a certain threshold in a point-based system that evaluates factors like academic background, professional experience, and annual income. However, a fundamental prerequisite for this status is the stability of the accepting organization (the sponsoring company).

This article provides an objective explanation of how the HSP status is affected when an accepting organization enters bankruptcy or civil rehabilitation proceedings, either during the application process or while the individual already holds the status, and outlines the necessary steps to take.

The Link Between Your Company’s Financial Health and Your Visa Status#

The HSP status of residence is approved on the premise of activities conducted at a specific accepting organization. The condition of the sponsoring company is a critical factor in the evaluation process, as evidenced by points awarded for criteria such as “the accepting organization being a small or medium-sized enterprise with a high ratio of research and development expenses.”

Therefore, if the accepting organization faces a financial crisis such as bankruptcy or civil rehabilitation, it may be determined that the “stable foundation for residency activities has been lost.” This significantly increases the risk of denial for new applications, as well as for applications to change or extend the status of residence.

In particular, if a company enters bankruptcy proceedings, ceases operations, and is liquidated, it means the employment contract is terminated and the very basis for the activity disappears.

Specific Impacts on Visa Status and Mandatory Obligations#

The financial failure of a sponsoring company has direct consequences for a foreign national’s status of residence. Here are the required actions and the risks of non-compliance.

1. Obligation to Notify the Immigration Services Agency#

First, if the employment contract with the company is terminated (due to dismissal, resignation, or company dissolution from bankruptcy), mid- to long-term residents are legally obligated to submit a “Notification regarding the Accepting Organization” to the Immigration Services Agency of Japan (ISA) within 14 days. This notification can be submitted online or at the counter of the nearest Regional Immigration Services Bureau. Failure to comply with this obligation may result in fines or be viewed negatively in future visa applications.

2. Potential for Visa Revocation#

If an individual, without a justifiable reason, fails to engage in the activities corresponding to their status of residence for three months or more after leaving their organization, their status may be subject to revocation (Article 22-4 of the Immigration Control and Refugee Recognition Act). Therefore, after a company’s bankruptcy, it is imperative to promptly begin searching for a new job.

Step-by-Step Guide for Different Scenarios#

The appropriate response varies depending on the situation. We will examine two primary cases: during the application process and while holding the HSP status.

Case 1: Company Bankruptcy During Your Visa Application Process#

If the sponsoring company goes bankrupt while your application for a change to HSP status or for a Certificate of Eligibility is under review, the application will almost certainly be denied. This is because the “stable foundation for activities,” which is the basis of the application, no longer exists.

In this situation, you must quickly find a new job. Once you have a job offer, you should withdraw the current application and reapply with the new company as your sponsor. If your current period of stay is nearing its expiration, swift action is crucial.

Case 2: Company Bankruptcy While You Hold HSP Status#

If you already possess an HSP visa and leave your job due to your company’s bankruptcy, you must, as mentioned, file the notification within 14 days and begin your job search to find new employment within three months.

Once you have found a new job, the following procedures apply:

If you still meet HSP criteria at the new company: You must recalculate your points based on the information of the new accepting organization. If you still meet the threshold (70 or 80 points), you should submit a “Notification of a Change in the Accepting Organization” to the ISA.
If you no longer meet HSP criteria at the new company: If changes in your job description or annual salary cause your point total to fall below the threshold, you must apply for a “Change of Status of Residence” to a more appropriate category, such as “Engineer/Specialist in Humanities/International Services.” It is important to note that you cannot start working at the new job until this change of status is approved.

In the Case of Civil Rehabilitation#

Unlike bankruptcy, which involves the liquidation of a company, civil rehabilitation is a procedure aimed at business reconstruction and continuation. Therefore, the start of civil rehabilitation proceedings does not automatically mean the termination of your employment contract.

However, during the ISA’s review process, the company’s financial stability and continuity will be scrutinized intensely. When applying for a visa extension or change, you will likely need to submit additional documents, such as the rehabilitation plan and materials objectively explaining the business’s future prospects, to carefully demonstrate that your employment will remain stable and that you can continue your residency activities. Any salary delays or reductions can also negatively impact the review.

Conclusion#

The financial failure of a sponsoring organization is a very serious event for anyone holding an HSP status of residence. If you find yourself in this situation, it is crucial to remain calm and act swiftly, keeping the following points in mind:

Assess the situation accurately: Understand the exact legal status of your company—whether it is bankruptcy or civil rehabilitation.
Fulfill your obligations: Always file the “Notification regarding the Accepting Organization” within 14 days of leaving your job.
Start your job search immediately: Act quickly to find new employment to avoid the risk of visa revocation.
Follow the correct procedures: Once you secure a new position, submit either a “Notification of a Change in the Accepting Organization” or an “Application for Change of Status of Residence,” as appropriate for your circumstances.

If you are uncertain about any aspect of your situation or the required procedures, it is essential to seek accurate information by consulting the Immigration Services Agency Information Center or your local Regional Immigration Services Bureau.