How Japan supports foreign entrepreneurs: startup visa, grants and subsidies 💪

Japan’s hard line on immigration makes it challenging for foreign-born entrepreneurs to get started. But local governments have been making a push to help out foreign founders with soft-launching in their cities.

Le Wagon’s startup and tech community is working hard to build a resourceful network, so the new global entrepreneurs will flourish and help advance the country. Last May, we hosted a virtual panel discussion with Yoshiro Tasaka, Director of Global Strategy Division at Shibuya City Office, founder of StartupJapan Miho Tanaka and Chief Director of JETRO Kyoto Naofumi Makino who shared practical tips on how to apply for hands-on support from the Japanese government. Here are important questions and takeaways that have been answered during the panel discussion. Watch it below or scroll down to read transcripts! 👇

⭐ Do you need to have a Japanese partner when starting a company in Japan?

It’s not required to have a Japanese partner: anybody can launch a company in Japan. However, having a Japanese partner will definitely make it easier to go through paperwork in Japanese or negotiate without a translator.

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⭐ Could you share some successful recent examples of foreign startups in Japan that have navigated the market/bureaucracy well, in your opinion?

A lot of foreign companies and entrepreneurs share the misconception that the Japanese market is difficult to enter.

These days, more and more startups successfully establish their branch offices in Japan. Stripe, CircleCI and ByteDance and Shift are some of the successful cases that managed to quickly launch their operations.

⭐ What are the B2B networking possibilities here in Japan? Are there any online communities you would recommend where I can network with fellow entrepreneurs/startup workers?

Kyoto: KIEC and Plug and Play for startup-related events, Hacker News Kansai for developers, Indie Meetup and Bit Summit for gamers.

Tokyo: Google campus, Plug and Play, Venture Cafe run many events for English speakers. AWS Tokyo Loft offers regular activities for startups.

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VISA Q&A:

⭐ Besides the Business Manager visa, what are other possibilities for setting up a company in Japan?

Getting a business manager visa is a rather long process which requires applicants to have initial funding over JPY 5M and dedicated office space.

To clear the path for foreign startups, several cities and municipalities in Japan have introduced a startup visa program.

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⭐ From all types of visas, what’s the best type of visa to start a company? Is it to be a permanent resident?

Permanent residency is the best option as entrepreneurs are granted all rights and privileges of Japanese residents.

Among the long-term visas, a business manager visa is the most suitable for the purpose of launching a business, though you do need to meet several conditions.

A startup visa is a good option which is tied to a certain city or municipality and needs to be switched to a business manager visa after 6 months to 1 year. You can apply for it from abroad or while holding a tourist visa.

In many cases, working visa holders can build a side business while earning an income at their primary company.

⭐ Can visa holders start a business as a side hustle while keep working on their daily job? Or is there a sort of law against that?

It’s possible to launch a company while working on a daily job if your visa permits you to work. If you’re on a student visa, you need to apply for a permission to engage in activities other than the one permitted under the visa from immigration.

To avoid the hustle of a company incorporation, you can start as sole proprietorship first. This is also considered as a legal entity, yet doesn’t require so many efforts and paperwork.

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⭐ Could one use a highly skilled professional visa to officially start & maintain a business in Japan? Would you be required to maintain a full time job to keep the highly skilled professional visa? Is it tied to your company?

It is commonly believed that working a full-time job at the company is necessary to keep your highly skilled professional visa (HSP) visa. However, as long as foreign residents fulfill the criteria for their HSP category and score over 70 points, they can engage in multiple activities, for example, research at a university or management of their business.

HSP visa has three categories: for academics, workers and business managers. If it belongs to the ‘workers’ category, it is based on the salary received from the primary company and therefore is tied to this company.

FINANCES:

⭐ Where to find a list of grants available to startups? Any information/help available in English?

The Tokyo Metropolitan Government offers several financial support programs available to foreigners.

The Fukuoka government provides office rent support exclusively for foreign entrepreneurs.

Kyoto city also provides grants for foreign entrepreneurs and subsidies for startups aiming to solve the challenges related to COVID-19, the detailed information in English can be requested from JETRO Kyoto.

⭐ Any financial /visa incentives for entrepreneurs (living in Tokyo) contributing to the revitalization of local municipalities (Chihou Kaseika), tourism etc?

Tokyo supports companies boosting revitalization of shotengai, traditional shopping streets. You can apply for the grant if you are planning to support local businesses.

There is a subsidy specifically for startups called 創業助成事業 Sougyo Josei Jigyo, up to 3 million yen to pay for rent, office equipments or employees salary, with ⅔ coverage.

Most of the subsidies provided by municipalities require interviews in Japanese which is a hurdle for foreigners.

⭐ What are the basic expenses to register a company in Japan and the annual compliance expenses for a startup?

There are two types of companies, godo kaisha GK and kabushiki gaisha KK. To register KK, a joint stock company, you typically need over JPY 200K and 60K for GK, a limited liability company.

When you launch your company, you have to pay annually at least JPY 70K for the corporate tax, a minimum for everybody. For profitable companies corporate tax is higher.

In Kyoto, startup visa holders are qualified for a subsidy program and don’t need to pay for registration.

Which company style should you choose: GK or KK?

⭐ What are the best channels/resources to research regulations & the process for importing/shipping foreign goods to Japan (reselling) from Europe, Nordics, etc.

If you have any questions, feel free to reach out to MIPRO, a governmental organization which consults trade businesses.

⭐ What are the most friendly banks for foreign entrepreneurs who want to open a bank account in Japan?

If you need to choose a brick-and-mortar bank, Japan Post Bank is one of the easiest to deal with. Otherwise, go for online banks such as Seven Bank, Japan Net Bank, or Rakuten Bank, a fast and comfortable way to transfer funds across the border.

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