Introduction

For foreign nationals seeking to operate or manage a business in Japan, the “Business Manager” status of residence is essential. In particular, when changing your company structure to one with a board of directors, careful attention to procedures and organizational arrangements is required. This article explains proven ways to avoid rejection and correctly apply for Business Manager status, referencing government and official information.

Basic Requirements for Business Manager Status

The “Business Manager” status (経営・管理, Business Manager) is a residence status for foreign nationals who will engage in the management or operation of a business in Japan. The activities allowed include:

• Launching and managing a business in Japan
• Participating in an existing business
• Acting on behalf of a corporation to manage operations

When switching to a board-of-directors company, both Companies Act and Immigration Act requirements must be met. Officially, “Business Manager” is the legal English term used by the Ministry of Justice.

Main Points When Changing to a Board of Directors Company

1. Clear Business Plan and Structure

When switching to a company with a board of directors, immigration authorities closely examine whether substantive management and control are possible. If Japanese nationals or permanent residents are added as directors, the responsibilities and decision-making authority of directors must be clarified. Show clearly that the decision-making process is not just a formality and specify:

• Director roles, authority, and structure
• Shareholding and capital relationships
• Ongoing business stability and actual existence

2. Office and Facility Requirements

A key issue is demonstrating the existence of a real office. Use of a virtual office or residential address is grounds for rejection. The following are required:

• Corporate-name rental contract (for business use)
• Company signage and appropriate equipment/furnishings
• Employees and physical facilities in place

Rejection cases often involve lack of company signage, no equipment, or no separated office space.

3. Capital and Financial Stability

A minimum capital or investment of 5 million yen is required. The origin of funds/transfer history must be disclosed and traceable, and ongoing operational funds must be available. Vague or unexplained sources of money are inadmissible.

4. Company Form-Specific Documents

Prepare core documents such as articles of incorporation, registry certificate, business plan, lease contract, etc., clearly reflecting the actual management structure of the board-of-directors company.

Common Reasons for Rejection and Strategies

Rejection Examples

• Office is only a residence, no actual business activity
• Use of a virtual office is grounds for rejection
• Directors or founders who do not actually manage the business
• Business plan is vague, lacking research or differentiation strategy
• Unclear source of funds or lack of operational funds

Solutions

• Provide detailed market research and competition analysis
• Corporate-name contracts and physical presence (signage, equipment)
• Documented capital origin and transfer history
• Director roles, responsibilities, and compensation specified
• Hire experienced staff if applicant’s experience is lacking
• Consult with a specialist promptly if concerned

Application Process & Timeline

It usually takes three to six months to complete preparations and obtain Business Manager status. Steps include: planning, company formation, submission of documents to tax/social insurance offices, office setup, completing application documents, and immigration submission.

Example

Mr. D launched a restaurant business with capital of 6 million yen, securing a property, installing playground equipment and signage, and submitting a business plan and funds origin statement. He was approved after changing to a board-of-directors company. Ms. E, by contrast, set up a company using only her residence with a mismatched lease contract and no signage/equipment – her application was rejected. Names and details have been modified.

Conclusion

When transitioning to a board-of-directors company under Business Manager status, special attention is needed for office existence, capital, and organizational structure. Ensure compliance with immigration and corporate law, prepare clear and credible documents, and consult experts as necessary, referencing official government sources for best results.