Why Highly Skilled Professionals Should Prioritize Permanent Residency for Entrepreneurship in Japan#
For foreign talent aiming to launch a business in Japan, choosing the right status of residence is a critical first step. While the “Business Manager” visa is the commonly known route for entrepreneurs, securing “Permanent Resident” status beforehand, if you meet the criteria, can be a far more advantageous choice for long-term business success and stability.
This article provides an objective and detailed explanation of why highly skilled professionals, in particular, should prioritize obtaining Permanent Residency (PR) over a Business Manager visa.
Freedom from the Pressure of Visa Renewals#
The Business Manager visa is granted specifically for the purpose of engaging in the management or administration of a business. Consequently, when it comes time for renewal, the continuity and stability of the business are subject to rigorous scrutiny. Immigration authorities will comprehensively evaluate factors such as the progress of the business plan, revenue and profit figures, and the employment of staff.
It is not uncommon for a startup to operate at a loss during its initial phases. However, persistent deficits or a perceived lack of substantive business activity can lead to the risk of a renewal application being denied. This constant pressure and uncertainty can be a significant mental burden for an entrepreneur who needs to focus on growing their business.
In contrast, Permanent Residents have no set period of stay and are thus exempt from the visa renewal process entirely. Once granted, you can reside in Japan stably, regardless of your business’s financial performance. This stability provides an invaluable foundation for the inherently uncertain endeavor of entrepreneurship.
Unparalleled Flexibility in Business Activities#
The Permanent Resident status comes with no restrictions on the scope of activities one can engage in. This is a massive advantage for any entrepreneur.
For instance, a Permanent Resident is free to establish a new company in a different field upon discovering a new business opportunity, work as a sole proprietor, invest in other startups, or serve as a director on the board of a friend’s company. Furthermore, if a business venture does not succeed, a PR holder has the flexibility to seek employment as a company employee to regroup and plan their next move.
Conversely, the Business Manager visa requires the holder to focus on the management activities of the specific business for which the visa was approved. Engaging in other work activities typically requires separate permission (Permission to Engage in Activity Other Than That Permitted), imposing limitations on one’s professional scope. For an entrepreneur who wants the agility to diversify or pivot their business quickly, the freedom afforded by PR significantly broadens their business horizons.
Enhanced Social Credibility and Smoother Access to Financing#
In Japanese society, being a Permanent Resident carries a high degree of social credibility. It is seen as proof of an individual’s commitment to building a life in Japan and contributing to its society over the long term.
This social trust translates into tangible benefits in various business situations. The most significant advantage is in obtaining financing from financial institutions. Permanent Residents tend to be viewed more favorably when applying for business loans, as well as personal financing such as home mortgages and real estate investment loans. The process of signing rental agreements for offices, retail spaces, or residential properties also becomes much smoother, often reducing the difficulty of finding a guarantor.
For an entrepreneur, access to capital and securing a base of operations are lifelines. Permanent Residency acts as a powerful endorsement that helps clear these critical hurdles.
The Fast Track to PR via the Highly-Skilled Professional Point System#
There is a common misconception that one must reside in Japan for ten years to be eligible for Permanent Residency. For highly skilled professionals, however, this pathway can be significantly shorter.
Japan’s immigration system includes the “Point-Based System for Highly-Skilled Professionals.” This system evaluates a foreign national’s background based on factors like academic qualifications, professional experience, annual salary, and research achievements, awarding points for each. Those who reach a certain threshold are recognized as “Highly-Skilled Professionals” (HSPs).
Utilizing this system dramatically shortens the residency requirement for a PR application:
- 70 or more points: You can apply for PR after residing in Japan for three consecutive years.
- 80 or more points: You can apply for PR after residing in Japan for just one consecutive year.
Many researchers, engineers, and corporate executives may meet these criteria. Therefore, it is a very wise strategy for aspiring entrepreneurs to first check if they are eligible for this expedited PR application route before they begin the process of establishing their company.
Conclusion#
For a highly skilled professional looking to start a business, the Business Manager visa is a direct means to an end. However, from a more strategic, long-term perspective, the benefits of obtaining Permanent Residency are immeasurable.
- Stability: A status of residence that is not dependent on business performance and requires no renewals.
- Freedom: No restrictions on occupation or activities, allowing for flexible business development.
- Credibility: High trust from financial institutions and society, leading to smoother financing and contracts.
Of course, the PR application has its own stringent requirements, including the fulfillment of tax and public obligations and a record of good conduct. However, for a highly skilled individual who can meet these standards, securing Permanent Residency before launching a business is the most solid and powerful way to build a foundation for success in Japan. We recommend that you consider prioritizing a PR application in line with your career plan.