By guest contributor Thisanka Siripala

Japan’s decision to tighten the requirements for the business manager visa has sparked panic among foreign residents who run small family-run businesses. 

Foreign business owners could lose their residency status after the government increased the capital requirement from 5 million yen (approx. $31,000) to 30 million yen (approx. $187,000).1

The changes also mandate a full time Japanese or permanent resident staff member,  Japanese language ability equivalent to an average Japanese person, and three years of business managerial experience or a masters degree equivalent.  

The government said the revisions are in response to the increase of fraudulent business visa applicants who set up shell companies to gain residency status.   

But long term foreign residents, who have set up legitimate businesses and roots in the community, have become collateral damage.  

Immigration Services Agency statistics shows that only 4 percent of business manager visa holders hold 30 million yen in capital. 

The business manager visa, introduced in 2015, was designed to encourage foreign entrepreneurship.  The number of visa holders grew from 18,000 in 2015 to 40,000 by the end of 2024. 

The number of applications have now plummeted 96 percent from roughly 1700 to 70 per month since the new rules were announced in October 2025, according to a report by the Cabinet Secretariat. 

Indian curry under attack

Kazuki Yuda, administrative scrivener at Touch Immigration Law Firm said the people who are most affected by the changes are not those abusing the system. It’s the small restaurant owners and young entrepreneurs.  

Indian-style curry is considered one of the most successful immigrant-run small business sectors in Japan. These restaurants are one of the country's most visible foreign cuisines, with approximately 5,000 Indo-Nepalese restaurants in Japan. This is more than the number of McDonald's restaurants in the country.    

But these restaurants will need to generate additional revenue to remain profitable or secure new sources of funding in order to stay in Japan. 

Yuda said the high capital threshold and hiring one full time Japanese employee doesn’t align with the realities of these family-operated small businesses. 

“We are seeing growing anxiety among existing visa holders,” said Yuda at a press conference at the Foreign Correspondents Club of Japan on June 8. “Raising 30 million in capital in a few years is extremely difficult even for businesses that are profitable.”        

The unease has also prompted Japanese restaurant customers to take action. An online petition to review the capital threshold has been signed by more than 67,000 people and was submitted to the Immigration Services Agency in mid-May.

Business manager visa renewals have also become unpredictable. Immigration authorities are scrutinizing whether existing visa holders are engaged exclusively in managerial responsibilities.  

But restaurant owners say they are being penalized for the reality of running small businesses, where cooking, cleaning, and serving customers are often inseparable from managing staff and finances. 

The business behind the business manager visa scam

Immigration authorities process more than 35,000 business manager-related applications per year, which includes status changes and extensions. They typically have one to two months to determine whether a business is legitimate.  

There are concerns within the government that the fall in the number of illegal overstayers from a peak of almost 300,000 in 1993 to 75,000 as of January 2025, is disguised through illegitimate business manager visas. 

Authorities are now questioning how many visa holders are genuine entrepreneurs. In one case, investigators in Kanagawa Prefecture found that a Sri Lankan national had set up roughly 600 shell companies. He also allegedly submitted business manager visa applications for at least six Sri Lankan nationals by listing them as company presidents on paper, even though they actually worked manual labor jobs.

The police suspect around 1,000 people may be working in Japan illegally through these types of schemes.

A sweeping foreigner crackdown is underway

The business visa controversy is part of Japan’s goal of achieving “zero illegal foreigners.” 

It's a broad policy tackling illegal overstayers, foreigners working outside visa conditions, student visa misuse, and rising foreign land ownership in Japan. 

Japanese politician Sakura Uchikoshi from the Constitutional Democratic Party of Japan believes the six-fold increase in capital is "extremely heavy-handed.”

“The size of a company's capital and the existence of genuine business operations are entirely different issues,” she said at the Foreign Correspondents Club of Japan (FCCJ) on Monday June 8.

“Many foreign small business owners who have established themselves under the previous requirements have been making valuable contributions to the economy. More than half of those who are affected have lived in Japan for more than six years.“

Uchikoshi believes the policy is irrational and politically motivated, “carried out in line with xenophobic objectives that run counter to the principles of fair administration.”

She criticized the stricter requirements as failing to reflect the issues raised in the 702 public comments submitted in October 2025. A major concern was the need to ensure that small business holders are not forced out of business and forced to leave the country.

There are concerns that the 30 million yen capital requirement will push some small business owners to take on risky debt. Uchikoshi said Japanese firms are already preparing loan products to help companies meet the higher threshold.

Mixed messages from the government  

Japan continues to promote the acceptance of foreign workers to fill low skilled and high skilled labor shortages. At the same time, it’s tightening residency standards for legitimate small immigrant business owners.

The changes to the business managers visa system may end up hurting precisely the kinds of foreign residents Japan should be encouraging to stay - people who have built law-abiding businesses, raised their families and made Japan their home.

Editor’s note:

What’s really happening behind the scenes? The recent wave of xenophobia-tinged immigration policies coming out of Tokyo aren't happening in a political vacuum; it's a calculated reading of the Electoral tea leaves. In the summer of 2025, Sanseito, “the Japanese first party” born on YouTube as an anti-vax conspiracy group, shocked the political establishment by jumping from one seat to fifteen in the Upper House elections last July. Then on February 26th they went from two seats in the Lower House to fifteen seats in the snap election called by Prime Minister Takaichi.

In other words, a party that barely existed 5 years ago suddenly holds real parliamentary leverage now. The LDP and the Takaichi administration, who have been battered by corruption scandals, a cost of living crisis, and have a decades-long record of kicking the can on Japan's real structural problems, have clearly noticed.

The frequent attacks on foreigners—whether they be tourists or long-term residents— are part of a political strategy to gain votes at the cost of Japan's minorities. Foreigners are less than 4% of the population. Tightening the screws on foreign residents and stoking anxiety about immigration is cheap political theater. It costs nothing and requires no actual governance.

It’s a desperate measure from a ruling party that has failed on rice prices, wages, and demographic collapse. Why not point the finger at someone else?

At present, Japan is a place where a fringe party running on “silent invasion” rhetoric can go from the depths of YouTube to the halls of the Diet in a single election cycle. It's no surprise that the LDP, which is always governed for their own benefit and never for the benefit of the people (and certainly never has been a champion of diversity) is simply following the scent of votes like a hunting dog smells blood in the air. They will milk the xenophobia as far as they can until the next inevitable scandal hits that reveals their complete incompetence in governing the country.

For the time being, “gaijin bashing” is a cheap and politically profitable sideshow to keep the masses distracted—and it is working. -JLA

Jake Adelstein contributed to this article.