Japan intends to relax requirements by recognizing a broader range of startup capital, facilitating the establishment of foreign-owned businesses.

The Immigration Services Agency will soon update its rules to attract foreign skilled workers for business manager residency status.

Candidates initially get a one-year residency permit, which they can renew indefinitely if they meet certain requirements. By the end of the last year, around 37,000 business managers were living in Japan. The ISA assesses whether the company is viable and if the applicant is actively managing it before granting approval. The company needs a physical office, 2 full-time workers, or a 5 million yen investment to qualify.

In Japan, new rules allow entrepreneurs to use J-KISS for startup funding instead of just their own money.

J-KISS backers buy the right to acquire equity in startups to finance them. In contrast to loans, the company can treat the infusion of funds as cash on hand, and there is no commitment to repay them. J-KISS is becoming more and more popular among startups as a convenient means of obtaining initial money.

The regulatory reform group of the Cabinet Office has recommended that the government review the residency requirements for foreign entrepreneurs. Entrepreneurs need over 5 million yen to start a business, which is expensive for small startups. Allowing the use of investor capital for residency could attract more foreign talent to Japan. The government plans to attract international experts, but in 2019, Japan ranked 25th out of 35 OECD countries in attracting foreign talent.