Hello, this is Inada from IMS Legal Professional Corporation. Currently, many international students studying at universities in Japan hope to work in Japan after graduation. In most cases, this means finding employment with a company or organization. However, recently, there has been a noticeable increase in students who start their own businesses as sole proprietors while still in school, or who are planning to establish a company.
In this article, we will take a look at the residency procedures involved when an international student decides to start a business on their own.
When an Application for “Individual Permission” for Activities Outside the Scope of Status Is Required
First, if an international student starts a business as a sole proprietor, their primary activity remains being a student, so their status of residence remains as “Student.” Business activities can only be conducted within the scope of “Permission to Engage in Activity Other Than That Permitted under the Status of Residence Previously Granted.”
Normally, this permission is granted under a “blanket permit,” which does not require specification of the workplace or job content, and allows part-time work up to 28 hours per week (excluding adult entertainment industries). However, in the case of sole proprietorship, it can be difficult to objectively verify the number of work hours.
Therefore, in such cases, a “blanket permit” is not sufficient, and the student must apply for an “individual permission,” specifying the details such as the content, location, and duration of the activity.
When a Change to the “Business Manager” Status of Residence Is Required
Next, if the student does not operate as a sole proprietor but instead establishes a company and employs staff, the activity of managing a company cannot be conducted under the status of “Student” or as an activity outside that scope. In this case, a change of status to “Business Manager” is required.
Even after changing to “Business Manager,” students may still continue their academic activities since attending school is not a paid activity. However, even if managing a company and attending school can be balanced, changing to the “Business Manager” status requires securing a physical business office and either employing at least two full-time employees or investing a capital of at least 5 million yen.
Therefore, the requirements for changing to the “Business Manager” status can be considered relatively high.
Changing to “Designated Activities” Status After Graduation for Entrepreneurship Activities
If an international student graduates from a Japanese university, even if they are not immediately eligible to change to the “Business Manager” status, it is still possible for them to remain in Japan for a certain period by changing to a “Designated Activities” visa for the purpose of entrepreneurship. There are several types of “Designated Activities” intended to support entrepreneurship.
Designated Activities (Entrepreneurship)
The first type is a “Designated Activities” visa for entrepreneurship that is not limited to graduates from specific universities. This is available to students who have graduated from an undergraduate or graduate program within the past six months and who are expected to establish a company and apply to change to the “Business Manager” status. However, applicants must demonstrate outstanding entrepreneurial and managerial abilities, be recommended by their university, and already have secured funding and office or store space. The university must also provide entrepreneurial support. A number of specific requirements must be met individually.
Designated Activities (non-notified)
The second type applies to graduates from selected universities that actively promote the enrollment of high-achieving international students. If certain conditions are met, such graduates may be granted a “Designated Activities” visa (non-notified type) for up to two years to pursue entrepreneurial activities. These selected universities are designated by the Ministry of Education, Culture, Sports, Science and Technology under programs such as the “Career Development Program for International Students” or the “Top Global University Project.”
In addition, although the number of eligible Japanese universities is very limited, there is another visa program—“Future Creation Human Resources (J-FIND)” (Designated Activities, No. 51)—for graduates of top overseas universities who wish to engage in job searching or entrepreneurship preparation in Japan. This program also allows a maximum stay of up to two years.
[Reference] List of universities eligible for the Future Creation Human Resources system (PDF) (as of January 2025)Can a Company Be Established While Holding a “Student” Status of Residence?
Up to this point, we’ve discussed the challenges that international students face when trying to start a business in Japan and change their status of residence to “Business Manager.” However, there may be cases where a student wishes to establish a company while still enrolled in school and prefers to maintain their “Student” status of residence for some reason. What should be done in such a situation?
As mentioned earlier, one cannot engage in business management activities while holding a “Student” status of residence. On the other hand, it is legally permissible to hold shares in a company or to work for that company as an employee. Therefore, even if a student invests in and establishes a company, as long as someone else takes on the role of company manager, the student may enter into an employment contract with the company and participate in its operations as a part-time worker, within the scope of a permitted activity outside their designated status (i.e. "part-time work permit"). This allows them to be involved in the business while still maintaining their student status.
Please note that the information provided in this blog is current as of now. It is your responsibility to check the latest information on official government websites.
For more information, please contact us below ↓
https://imsvisa.support/en/contact/
