Tokyo government eases regulations to attract foreign entrepreneurs

With a population of 14 million and a gross metropolitan product (GMP) valued at ¥93.1 trillion, Tokyo has great potential to attract entrepreneurs looking for new horizons in a bustling, global metropolis.

However, due to the language barriers, rigid governmental and immigration regulations, as well as complicated bureaucratic procedures, many foreign companies have found it difficult setting up businesses in Japan—despite growing interest.

In a bid to address this problem, the Tokyo Metropolitan Government (TMG) has launched a new support program aimed at foreign firms. The Program to Increase Foreign Entrepreneurs eases certain regulations and provides help through the entire process, in the hope of boosting the number of foreign startups in the capital.

Program to Increase Foreign Entrepreneurs

Foreign entrepreneurs wanting to open businesses in Japan are required to obtain a business manager visa, which serves as the legal permit allowing them to launch commercial operations in the country. Prior to recent amendments, in order to obtain this visa, entrepreneurs were required to either hire at least two full-time staff or invest a minimum of ¥5 million, in addition to securing an office in Japan upon their entry to the country. However, to fulfill these requirements, on most occasions entrepreneurs had to secure a business partner in Japan, complete real estate procedures for securing an office and arrange other documentation prior to their entry to Japan, which proved to be an arduous challenge.

Under the Program to Increase Foreign Entrepreneurs, which officially launched on January 29, 2016, prospective foreign enterprises who meet all requirements provided by TMG will be given a six-month preliminary business manager visa. This allows them to start commerce in Japan under the condition that within six months the company fulfills the requirements needed to obtain the visa. The short-term permit also provides companies time to complete the required documents, get settled and grow their business without undue pressure while they are in Japan. The visa will be renewed at the end of the period, provided the project is progressing smoothly and that all conditions have been successfully met.

Furthermore, applicants may use a legal proxy, such as approved lawyers or certified administrative scriveners, to apply for the preliminary visa.

Business Development Center Tokyo (BDCT)

To apply for a preliminary business manager visa, potential startups are requested to submit an application for confirmation of business startup activities, a plan for confirmation of business startup activities, resume, copy of applicant's passport, a document that can clarify where the applicant will be residing for six months after coming to Japan and other items necessary upon request. Although these forms must be submitted in Japanese, TMG has set up a bilingual consultation center, the Business Development Center Tokyo (BDCT), located in the capital’s Akasaka area, which provides free individual consultations on topics concerning the business development, application procedures and Japanese business etiquette and customs. The center further provides support for family-oriented issues, including real estate, healthcare and education. The BDCT can also introduce specialists in various areas, such as lawyers, translators, certified social insurance consultants and others.

Working in tandem with BDCT, the Tokyo One-Stop Business Establishment Center (also in Akasaka), serves as a unified hub for all administrative divisions one needs to access for bureaucratic procedures, such as labor, health and pension insurance, immigration, taxes and others. While previously, entrepreneurs had to visit separate venues to complete each procedure, this center unifies all departments into a single place to visit for all professional advice and support with documentation, making the process faster and smoother. The center can help file all initially required documents, including certification of articles of incorporation, company registration and notification of incorporation, taxes, social security and more at the business startup stage.

Additional advantages for setting up business in Tokyo

Foreign companies launching business in any of Tokyo’s five Special Zones for Asian Headquarters— Shinjuku station, central Tokyo/waterfront, Shinagawa-Tamachi and Shibuya station areas, as well as vacant sites around Haneda airport—can benefit from approved tax incentives. Starting a business in these special zones also makes startups eligible to apply for TMG's subsidy program for expenses related to hiring new personnel (up to 50 percent of all actual expenses incurred in setting up the company, to a maximum of ¥5 million per company), as well as free business consulting services, support in renting offices at a reduced rate, and other services.

Goals for expanding foreign business presence

At present, Tokyo is home to 2,300 foreign-affiliated companies, approximately 69 percent of all foreign firms in the country. By expanding and continuously improving support for foreign companies, TMG aspires to attract a minimum of 500 companies by the end of fiscal 2016. By enabling economic cooperation between foreign and domestic or Tokyo-based companies, TMG's ultimate goal is to promote Tokyo as the lead city for the establishment of foreign headquarters in Asia and boost Japan's economy to a whole new level. The Tokyo Metropolitan Government is introducing various benefits for foreign businesses who are interested in expanding to Japan.  

For more information, please visit: Program to Increase Foreign Entrepreneurs, Business Development Center Tokyo and Tokyo’s Special Economic Zones. 

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