Introduction
Foreign nationals who establish companies and operate businesses in Japan must obtain the residency status of “Business Manager” (official English name by the Ministry of Justice). Normally, this status requires annual renewal procedures, in which the applicant’s tax and social insurance payment status are strictly reviewed. This article explains effective strategies and concrete steps to take if payment arrears are discovered, and how to successfully reapply for the residency status.
What is “Business Manager” Residency Status?
This status is granted to foreigners managing or operating a company in Japan. Simply founding a company is insufficient; there must be stable, ongoing business activity. Submission of materials proving business continuity and stability may also be required.
Key Points in the Renewal Examination
The following points are examined in renewal procedures:
- Payment status of taxes (corporate tax, income tax, resident tax, consumption tax, etc.)
- Payment status of social insurance premiums (health insurance, pension, unemployment insurance, etc.)
- Applicant’s eligibility
- Business continuity and planning
If tax or social insurance arrears are found, renewal approval is extremely unlikely.
Countermeasures When Arrears Are Discovered
1. Immediate Settlement of Outstanding Amounts & Preparation of Certificates
If arrears exist, settle all outstanding amounts promptly and obtain official payment certificates (“tax payment certificate”, “social insurance payment certificate”). Applying while in arrears will not be approved.
2. Clarification of the Reasons for Arrears and Presentation of Improvement Plans
If arrears occurred due to unavoidable circumstances (temporary cash flow shortage, etc.), clearly explain the reasons and submit documents detailing improvement plans (income improvement plan, accountant support, etc.).
3. Establishment of a System to Continuously Fulfill Obligations
To prevent recurrence, regularly review finances, consult accountants, and build systems to check for overlooked payments. Understand Japanese systems from a managerial standpoint and act as a trusted leader.
4. Proper Management of Notifications and Company Information
Neglecting notifications such as change of registered address or business details, even if tax payments are in order, will negatively affect approvals.
Concrete Steps to Secure Approval
- Pay all outstanding taxes/social insurance and obtain certificates
- Prepare documentation explaining reasons for delinquency and improvement plans
- Develop a future business and financial improvement plan
- Engage accountants and other professionals to ensure proper application documentation
- Submit accurate notifications and company documentation
- Allow plenty of time for the application preparation process
Government Information & Latest Policies
In June 2025, the government announced new guidelines to reinforce measures against tax and social insurance arrears for foreign business managers. Renewals will be refused and re-entry banned if delinquency is confirmed, so prompt and thorough settlement is indispensable.
Example Case
Mr. X (male, 40s, Chinese nationality) established an IT company in Japan. During the initial unstable year, part of the consumption tax and pension premium were delinquent. He quickly resolved the arrears, obtained certificates, and developed a recurrence prevention plan with his accountant. By submitting these with his renewal, he was successfully approved.
Conclusion
For “Business Manager” residency status renewal, tax and social insurance arrears are a critical disadvantage. Immediate action, document preparation, and proposal of improvement plans are essential if arrears are found. As a foreign business owner, set up a solid compliance system early to ensure stable renewal and residency in Japan.
