Last Updated: April 27, 2026
Reading Time: About 12 min read
Category: Visa & Legal
Introduction
The Business Manager visa (Keiei-Kanri) is the residence status for international residents who run a company in Japan. The October 16, 2025 reform raised the bar for new applications: ¥30 million in capital, at least one full-time employee, and a JLPT N2 level Japanese requirement.
For those of us who already hold the visa, there is a three-year grace period until October 16, 2028. During that window, renewals don’t require us to fully meet every new standard from day one — showing a credible plan to migrate to the new criteria is enough in current practice.
In this article we walk through the five things immigration actually looks at during a renewal, how the 1/3/5-year status is decided, how losses and insolvency are evaluated, what documents to prepare, and what to do if the renewal is denied. The angle throughout is the perspective of an international resident currently running a business in Japan.
TL;DR
- Immigration evaluates renewals against five criteria, with “business continuity” at the center
- The 1/3/5-year status is decided by consecutive profitability, full tax compliance, and stable employment
- A loss-making year is fine for renewal as long as you are not insolvent
- A first-year insolvency (negative net worth) can still pass with an SME consultant or CPA evaluation report
- Two consecutive years of insolvency or a negative gross profit make denial almost certain in practice
- During the grace period you still need a migration plan toward the new criteria
- You can apply from 3 months before your status expires; standard processing is 2 weeks to 1 month
- After a denial you are given 30 days of “Designated Activities (departure preparation)” — enough time to reapply or switch to another visa
This article is based on information published by the Immigration Services Agency of Japan as of April 2026. It is not legal advice. For your specific filing, consult a qualified administrative scrivener (gyoseishoshi), tax accountant, or SME consultant.
The 5 Screening Criteria for a Business Manager Visa Renewal
What immigration is really asking is: Is the company actually operating? Will it keep operating? And is the manager able to live in Japan as a manager? In practice that translates into the following five criteria.
| # | Criterion | Main checkpoints |
|---|---|---|
| ① | Applicant suitability | Background, conduct, and proof of management capability via career and education |
| ② | Business continuity | Last two fiscal years of financial statements, revenue, profit, actual operations |
| ③ | Tax and public dues compliance | Corporate tax, resident tax, social insurance fully paid |
| ④ | Continued business premises | Active lease, independent office space maintained |
| ⑤ | Residence record and time abroad | Long absences, compliance with notification duties |
Of the five, ② business continuity carries the most weight. Strong financials alone don’t save a file with gaps elsewhere, and a loss-making year doesn’t sink it as long as the other four are solid and you can show a recovery plan.
Criteria ②③④ can still be salvaged with paperwork in the weeks before filing, but ① applicant suitability and ⑤ residence record (missed notifications, long absences) are part of your past and cannot be rewritten after the fact. The strongest insurance is to keep a quarterly log of address changes, affiliated-organization changes, and entry/exit records.
For the full picture of grace-period rules and new-application requirements, see our Business Manager Visa Guide.
(Source: Immigration Services Agency of Japan – "Status of Residence: Business Manager")
How 1, 3, and 5-Year Status Are Decided
In practice the Business Manager visa is granted in three lengths: 1 year, 3 years, or 5 years. Almost everyone starts at 1 year on first acquisition, and the period stretches as you renew.
| Period of stay | What immigration is reading | Typical situation |
|---|---|---|
| 5 years | Fully stable management | Consecutive profits, Category 1–2 company, full tax compliance, continuous staffing |
| 3 years | Broadly stable management | Two recent fiscal years in the black, or losses with a clear recovery path |
| 1 year | Room for improvement | Single-year loss, early-stage business, wait-and-see during the grace period |
| Denied | Operations no longer real | Two consecutive insolvent years, long-term unpaid taxes |
What Are Immigration’s Categories (Affiliated Organization Tiers)?
The “Category 1–2” reference above comes from a four-tier classification immigration uses based on company size, public character, and the amount of withholding tax. The higher the category, the simpler the document set and the more likely you are to receive a longer status.
| Category | Companies that qualify |
|---|---|
| 1 | Listed companies, national/local government bodies, independent administrative agencies, qualifying public-interest corporations |
| 2 | Companies whose previous-year withholding tax total exceeds ¥10 million (per the Hotei-Chosho Gokeihyo) |
| 3 | Companies that filed the Hotei-Chosho Gokeihyo but don’t meet Category 2 |
| 4 | Companies that fall into none of the above (newly founded, small startups, etc.) |
Newly incorporated companies and small owner-managed companies typically start in Category 4 and move up to 3 or 2 as employment and payroll history accumulate.
(Source: Immigration Services Agency of Japan – "Affiliated Organization Application Form")
Conditions for a 5-Year Status
- All notification duties under the Immigration Act are fulfilled
- The company falls under Category 1 or 2
- For Category 3, a 3-year status is already held with continued business prospects
- Tax and public dues are fully paid
Conditions for a 3-Year Status
- The most recent two fiscal years are profitable, or losses come with a clear recovery path
- Director compensation is at a level you can actually live on in Japan (¥250,000+/month) and paid stably
- A medium-to-long-term business plan has been submitted
Why Some People Stay on a 1-Year Cycle
Recurring single-year losses, an unfinished plan to meet the new grace-period criteria, director compensation low enough to call your life in Japan into question, premises or staffing falling short of the post-reform standards — these are the typical patterns. A repeated 1-year status isn’t a denial; it’s immigration saying room for improvement.
Can You Renew with a Loss-Making Year? The 4-Level Assessment
Whether a renewal goes through with red financials depends on how deep the red runs.
| Level | Situation | Renewal outlook | Required action |
|---|---|---|---|
| 1st | Single-year loss (no insolvency) | Goes through | Business improvement explanation |
| 2nd | Two consecutive losses (no insolvency) | Goes through (higher bar) | Business improvement explanation + medium-to-long-term plan |
| 3rd | First-year insolvency (negative net worth) | Possible with an evaluation report | SME consultant evaluation report (mandatory) |
| 4th | Two consecutive years of insolvency / negative gross profit | Almost always denied | A capital increase to clear insolvency is effectively required |
Level 1: Single-Year Loss (No Insolvency)
A first-year loss is typically treated as expected and forgiven. Immigration’s focus is on three things: what caused the loss, what the recovery plan looks like from year two onwards, and whether the manager’s personal life in Japan is intact. Attaching a voluntary explanation letter is the standard play.
Level 2: Two Consecutive Losses (No Insolvency)
Renewal is still possible, but immigration generally expects a business improvement explanation and a detailed 3-to-5-year business plan.
Level 3: First-Year Insolvency
If a certified SME consultant (chusho kigyo shindanshi) or CPA issues an evaluation report stating that “insolvency will be resolved within one year and there is a credible recovery path,” a 1-year renewal can be granted. This route is documented in the Residence Examination Manual.
Level 4: Two Consecutive Years of Insolvency / Negative Gross Profit
Almost always denied in practice. A capital increase to dissolve the insolvency before filing is effectively a prerequisite. A negative gross profit is read as the business model itself isn’t viable, and an evaluation report rarely flips that conclusion.
Whether you can renew while losing money comes down to two things: are you insolvent, and is gross profit still positive? Talk to your tax accountant before year-end close about cash adjustments that keep you on the right side of the insolvency line.
(Sources: Shuro Visa Support Osaka – "Business Manager Visa Renewal with a Loss"; International Business Legal Services – "What’s Needed for a Business Manager Visa Renewal?")
SME Consultant and CPA Evaluation Reports
Once you slip into insolvency or hit two consecutive losses, a third-party evaluation report (gyoseki minoshi hyokasho) becomes the lynchpin of the renewal.
The Six Items the Evaluation Report Must Cover
- Identification of the cause of the loss or insolvency
- Concrete improvement measures (action plan)
- A revenue and profit projection (numerical simulation)
- A cash flow plan
- The manager’s background and strengths
- A signed evaluation by a third-party expert
Cost and Lead Time
| Expert | Fee | Lead time |
|---|---|---|
| SME consultant (shindanshi) | ¥100,000–¥300,000 | 2–4 weeks |
| Certified Public Accountant | ¥200,000–¥500,000 | 3–6 weeks |
When you commission an evaluation report, pick an expert “with prior experience on Business Manager visa renewals.” Someone who already knows what immigration wants to see — the language, the angles, the proof points — produces a dramatically stronger report. Asking your administrative scrivener for an introduction is the fastest route.
(Sources: Small and Medium Enterprise Agency – "SME Consultant System"; Creast Administrative Scrivener Office – "Business Manager Visa Renewal: SME Consultant Evaluation Report")
How to Write the Business Improvement Explanation
Alongside the third-party report, the business improvement explanation and the updated business plan that you write yourself carry significant weight.
A Bad Example and a Rewrite
Bad: “We will strengthen sales activities and increase revenue.”
Rewritten: “Starting May 2026, we will exhibit at two online trade shows per month. With an average of 10 leads per show, a 20% conversion rate, and an average deal size of ¥500,000, we project ¥1,000,000 in additional monthly revenue.”
The trick is replacing abstract phrases with specific numbers and sources of evidence. Blaming external factors and unsubstantiated optimism land just as poorly.
A Structural Template (Past / Present / Future / Backing)
- Past: Revenue and profit history, primary cause of the loss
- Present: Improvement measures already in motion, current month’s P&L
- Future: 12-month projection, cash flow forecast, capital required and how you’ll raise it
- Backing: Signed contracts, manager’s credentials, third-party evaluation
A “we wrote something to fill the slot” business improvement explanation is read accordingly. Aim for 5–10 A4 pages with real numbers and real evidence behind every claim.
Renewal Strategy Under the 2025 Reform Grace Period (–October 2028)
During the grace period (October 16, 2025 to October 16, 2028), renewals are screened against your current business situation plus your credible path to meeting the new criteria from October 2028 onward. Concretely, that means showing in writing your plan to (a) raise capital to ¥30 million, (b) hire at least one full-time employee, and (c) clear the Japanese language requirement.
Three Ways to Use the Grace Period
| Pattern | Strategy | Best fit |
|---|---|---|
| A. Step-by-step capitalization | Roll profits into retained earnings to reach ¥30M over three years | Stable profitable business |
| B. External capital raise | Bring in VC, angel, or family investment to capitalize in one shot | Scaling phase |
| C. Switch visas | Move to another status (Engineer/Specialist, SSW, Spouse) early | New criteria are clearly out of reach |
Three Scenarios from October 2028
| Scenario | Status | Outcome |
|---|---|---|
| Full compliance | All five criteria met | Routine renewal |
| Partial compliance | Some gaps remain | Case-by-case, real risk of denial |
| No action | Still on old standards | Almost certain denial; another visa becomes mandatory |
The grace period end date (October 16, 2028) is fixed. Counting back from today, that is roughly two and a half years. If you plan to spend three years on capitalization, hiring, and structural upgrades, the window to start moving is now.
(Sources: Immigration Services Agency of Japan – "Reform of the Landing Standards for the ‘Business Manager’ Status"; Daiichi Sogo Administrative Scrivener Office – "Business Manager Visa Approval Standards Tightened")
Required Documents for the Renewal
Standard Documents
| Category | Documents |
|---|---|
| Application | Application for Extension of Period of Stay; photo (3cm × 4cm, taken within 6 months) |
| Residence | Copy of Residence Card and passport |
| Company | Certified copy of corporate registration (tokibetsu zembu shomeisho) |
| Financials | Last two fiscal years of financial statements; copies of corporate tax returns |
| Tax | Corporate tax payment certificate; applicant’s resident tax payment certificate; Hotei-Chosho Gokeihyo (statutory withholding-tax summary) |
| Social insurance | Social insurance contribution payment certificate |
| Premises | Copy of office lease; photos of the office |
Situation-Specific Documents
| Situation | Additional documents |
|---|---|
| First-year loss | Business improvement explanation; updated business plan |
| Two consecutive losses | Business improvement explanation; medium-to-long-term plan; cash flow plan |
| First-year insolvency | SME consultant or CPA evaluation report |
| During grace period | New-criteria migration plan; capitalization roadmap |
| Director or staff changes | Shareholders’ meeting minutes; employment contracts; social insurance enrollment proof |
(Source: Immigration Services Agency of Japan – "Application for Extension of Period of Stay")
Director Compensation, Social Insurance, Resident Tax: Three Easy-to-Miss Killers
We tend to obsess over company performance, but immigration is also asking whether the manager — as an individual — is actually living in Japan as a manager.
| Item | Not OK | OK |
|---|---|---|
| Director compensation | ¥100,000/month (life-as-manager called into question) | ¥250,000+/month |
| Social insurance | Still on National Health Insurance, or unenrolled | Enrolled in corporate Health Insurance and Welfare Pension |
| Resident tax | Even ¥1 unpaid | Fully paid (special collection / payroll deduction recommended) |
The moment you incorporate, even as a one-person company, enrollment in corporate Health Insurance and Welfare Pension is mandatory. For resident tax, switching to special collection (payroll deduction) is the safer setup.
Immigration is scrutinizing these three points more harshly under the post-reform standards. A single failure here can sink an otherwise compliant file.
(Sources: National Tax Agency – "Q&A on Director Compensation"; Japan Pension Service – "Health Insurance and Welfare Pension Coverage for Employers")
Filing Schedule and Standard Processing Time
- Earliest filing: From 3 months before your residence card expiration
- Standard processing: 2 weeks to 1 month (3–6 weeks if losses, insolvency, or supplementary documents are involved)
- Special period: If you file before your status expires, you can stay in Japan until a decision is issued (up to 2 months)
Recommended Schedule (Counting Back Six Months)
| Timing | What to do |
|---|---|
| 6 months before | Confirm the latest-period close projection with your tax accountant; assess loss/insolvency risk |
| 5 months before | If needed, commission an SME consultant or CPA evaluation report |
| 4 months before | Draft the business improvement explanation and updated business plan |
| 3 months before | Compile documents and file the application |
| 1–2 months before | Decision notice (respond to any document requests) |
While the decision is pending, keep overseas trips and long absences light. Document requests are time-sensitive, and being out of the country slows your response.
For the broader visa-renewal flow, refer to a general visa renewal procedure guide once published.
(Source: Immigration Services Agency of Japan – "Application for Extension of Period of Stay")
What If You’re Denied? Reapplication and Switching Visas
A denial doesn’t mean a same-day flight home. You receive 30 days of “Designated Activities (departure preparation)”. During that window you go to the Immigration office that handled your case, hear the reasons for denial, and decide whether to reapply or pivot to another visa.
Routes to Other Visas
| Switch to | Conditions | Caveats |
|---|---|---|
| Engineer / Specialist in Humanities / International Services | University degree or higher; relevance to job duties | You’d resign as representative director and become an employee |
| Specified Skilled Worker | Employment in one of the 14 sectors | Industry-restricted |
| Spouse Visa | Married to a Japanese national or permanent resident | Only if you have a qualifying spouse |
| Dependent Visa | Spouse holds a working visa | Income test on the spouse |
For details on the dependent route, see the dedicated Dependent Visa Guide on YOLO MEDIA.
Post-denial decisions are a race against the clock. You have 30 days to either lock in your next status or leave the country. The moment you receive a denial notice, contact an administrative scrivener — that’s the rule of thumb.
(Sources: Daiichi Sogo Administrative Scrivener Office – "5 Reasons Business Manager Visas Get Denied"; Immigration Services Agency of Japan – "Residence Examination Manual")
FAQ
Q1: My first year was in the red, but I’m not insolvent. Can I still renew?
A: Generally yes. A first-year loss is often treated as expected, and a business improvement explanation plus an updated business plan typically yield a 1-year or 3-year status. The key is laying out the cause of the loss and the recovery plan with concrete numbers.
Q2: During the grace period, can I just renew without doing anything about the new criteria?
A: No. Even within the grace period, immigration is checking your intent and capacity to comply with the new criteria from 2028. Without documents showing your capitalization plan, hiring plan, and language requirement plan, even grace-period renewals get tougher.
Q3: I’ve been insolvent two years running. Is there anything I can do?
A: A capital increase to dissolve the insolvency before filing is effectively required. A judicial scrivener can complete a capital increase in a couple of weeks. You inject additional capital, clear the insolvency on your balance sheet, and then move to the renewal.
Q4: What happens if my residence card expires while my application is pending?
A: As long as you filed before the expiration date, you remain in Japan under a “special period” until the decision is issued (up to 2 months). If you file late and the card expires, you fall into overstay, so it’s safer to start moving 3 months before expiration.
Q5: I travel abroad heavily for business. Does that hurt my renewal?
A: Business travel itself isn’t a problem. But if you spend more than half the year overseas, immigration starts asking whether you are actually managing the company from Japan. If long absences are unavoidable, be ready to explain the legitimate reasons (negotiations with overseas counterparts, setting up overseas offices, and so on).
Wrap-Up: A Pre-Renewal Self-Check
A Business Manager visa renewal is a matter of working through five criteria one by one and bringing in expert help where needed. Starting 3 to 6 months before your next renewal, run through this checklist in order.
- ✅ No major holes in any of the five criteria (applicant suitability, business continuity, tax compliance, premises, residence record)
- ✅ The last two fiscal years are not in insolvency, and gross profit is positive
- ✅ If you’re in the red, the business improvement explanation is ready
- ✅ If you’re in first-year insolvency, you’ve commissioned an SME consultant evaluation report
- ✅ Both the company and you personally are fully paid up on taxes (resident tax, corporate tax, social insurance)
- ✅ Director compensation is being maintained at ¥250,000+/month
- ✅ During the grace period, your new-criteria migration plan is ready
- ✅ Your schedule lets you file 3 months before the deadline
For the full residence-status arc — from new acquisition to renewal to permanent residency or Highly Skilled Professional status — read this alongside the Business Manager Visa Guide, and check YOLO MEDIA for the Highly Skilled Professional Visa Guide and Permanent Residency Requirements once published.
![[2026 Update] Major Changes to Japan’s Business Manager Visa: A Plain-English Guide to the New ¥30M Capital, JLPT N2, and Full-Time Staff Requirements, Plus the 2028 Grace Period](https://media.yolo-japan.com/wp-content/uploads/2026/04/2026-Update-Major-Changes-to-Japans-Business-Manager-Visa-A-Plain-English-Guide-to-the-New-¥30M-Capital-JLPT-N2-and-Full-Time-Staff-Requirements-Plus-the-2028-Grace-Period-1-768x403.png)
