New JPY 30 Million Capital Requirement

Posted on September 1, 2025 in News

Japan Tightens Business Manager Visa Rules from October 2025
Tax Implications of the New JPY 30 Million Capital Requirement

Beginning October 2025, Japan will implement a major reform to its immigration framework: the minimum capital requirement for obtaining a Business Manager Visa will increase from JPY 5 million to JPY 30 million.

This change aims to ensure that foreign-owned businesses in Japan demonstrate greater financial stability. However, the impact goes beyond immigration—there are also important tax and compliance implications to consider.

1. Higher Registration and Incorporation Costs

At incorporation, companies must pay a registration tax of 0.7% of stated capital (minimum JPY 150,000).

  • Under the current JPY 5 million threshold → JPY 150,000 (minimum tax applies)
  • At the new JPY 30 million threshold → JPY 210,000

📌 Result: Higher upfront incorporation costs.

2. Increased Local Corporate Inhabitant Tax (Per Capita Levy)

Corporate inhabitant tax is imposed annually, with rates depending on capital size:

  • Capital under JPY 10 million → ~JPY 72,000 annually (Kobe, ≤50 employees)
  • Capital between JPY 10 million–100 million → ~JPY 185,000 annually

📌 Result: A move to a JPY 30 million capital structure increases the annual burden by about JPY 113,000.

3. Consumption Tax (VAT) Obligations

A hidden impact lies in consumption tax (VAT) compliance:

  • Companies established with less than JPY 10 million capital are generally exempt from consumption tax in their first two years.
  • At JPY 30 million capital, companies become mandatory consumption tax filers from the first fiscal year.

📌 Result: Immediate tax compliance requirements and potential cash flow implications.

4. Strategic Considerations for Foreign Entrepreneurs

The October 2025 reform makes entering the Japanese market more capital-intensive. Foreign investors should prepare by:

  • Budgeting for higher incorporation and annual tax costs
  • Planning for immediate consumption tax filing and invoice registration
  • Considering staged capital increases or alternative structures, depending on immigration and tax objectives

💡 Tax Differences by Paid-in Capital

ItemCapital JPY 5 millionCapital JPY 30 million
Registration Tax at IncorporationJPY 150,000 (minimum applied)JPY 210,000 (0.7% of capital)
Local Corporate Inhabitant Tax~JPY 72,000 annually (Kobe, ≤50 employees)~JPY 185,000 annually
Consumption Tax ObligationGenerally exempt for first 2 yearsMandatory from year 1

Key Takeaway

The October 2025 Business Manager Visa reform is a turning point in Japan’s policy toward foreign entrepreneurs. While it enhances business credibility, it also significantly raises tax costs and compliance obligations.

Foreign investors are strongly encouraged to consult both immigration and tax professionals to build structures that balance visa eligibility with tax efficiency.

📩 For professional guidance:
taxconsultation@core8eight.com