The Journal The Authority on Global Business in Japan

As part of Prime Minister Shinzo Abe’s comprehensive economic policy package known as Abenomics, Japan has set a target for annual foreign direct investment (FDI) of ¥35 trillion by 2020. To reach this goal, the country must make itself not only a more desirable market but also an easier place for non-Japanese to conduct business.

Attracting startups is a key part of the plan, and in April 2015 steps were taken to make setting up a business easier.

Previously, those living abroad who wanted to come to Japan and start a com­pany faced a Catch-22. To obtain a visa, one first had to register a company here. But to register a company, one needed to obtain a business manager visa and take up residence.

To solve this conundrum, a startup visa program was made available to those wishing to set up shop in the Tokyo and Fukuoka National Strategic Special Zones. This visa gave entrepreneurs six months to establish their business and could be renewed if one of two conditions were met: ¥5 million was invested in the company or two full-time employees were hired.

DOUBLE TIME
While a step forward, six months passes quickly and, according to Nikkei Asian Review only 30 such visas were issued in 2016 and 2017 combined. To better compete with other nations, a more flexible approach was needed.

As part of new economic package passed by the Diet on December 8, the startup visa period will be extended to one year and made available nationwide under a pilot program led by the Ministry of Justice and the Ministry of Economy, Trade and Industry (METI).

The American Chamber of Commerce in Japan (ACCJ) applauds the efforts of the govern­ment of Japan (GOJ) to make the country a more attractive place for those from abroad to start new businesses. The steps being taken to extend the term of the startup visa will significantly increase the ability of global entrepreneurs to grow their businesses in the Japanese market. This, in turn, will lead to an environment that supports increased economic growth.

“We know that innovative small and medium-sized enterprises—including startups—have the potential to infuse energy and innovative solutions into the economy,” said ACCJ Venture Company Task Force (VCTF) co-chair Barry Hirschfeld. “We are pleased to see positive moves being made by the GOJ to make Japan more vibrant and internationally competitive.”

VCTF vice-chair Jim Weisser added: “By implementing measures to amend the startup visa, foreign entrepreneurs with the skills and experience to lead innovative businesses that address key business needs—as well as critical social needs—will be more willing to consider Japan.”

HELPING HAND
Efforts by METI to support local govern­ments in attracting global startups are also welcome.

To help facilitate the process of establish­ing startups in Japan, METI will work together with localities wishing to attract FDI to identify professionals such as lawyers, accountants, and real estate agents who can provide services in English and other languages. By using these METI-certified professionals, entrepreneurs can gain access to private funds and government-affiliated lenders­—something that will make a big difference for those trying to navigate a system that has long been difficult to crack from the outside.

Christopher Bryan Jones is Editor-in-Chief of The ACCJ Journal. Originally from Birmingham, Alabama, he has lived in Japan since 1997.