TOKYO -- Japan plans to let foreign entrepreneurs live in the country for two years without a place of business or investment, Nikkei has learned, looking to help them get their business off the ground by easing residency requirements.
The move marks Tokyo's latest attempt to energize Japan's economy with an injection of international talent.
Current rules require foreigners to secure a place of business and at least two full-time employees or an investment of 5 million yen ($33,000) to qualify for business management residency.
The investment requirement is daunting for fledgling companies that may not even be profitable. A two-year grace period would let owners focus on growing their businesses.
"Big Japanese corporations have not lost their appetite for investment, so startups have prospects for attracting funding" in Japan, said Yuma Saito, president of Deloitte Tohmatsu Venture Support.
Easing the location requirement could let international students start a business while still in university.
Some Asian countries take a more flexible approach than Japan in welcoming foreign entrepreneurs. In South Korea, visa applicants do not have to meet all of the requirements, but can choose from several options such as patent ownership and educational background. Thailand has a visa option that lets people with at least 600,000 baht ($16,600) in personal funds stay for up to two years and bring their family members along.
Japan's government aims to revise residency rules for foreign business owners as early as the new fiscal year starting in April. Two separate programs for promoting entrepreneurship will be combined.
One of the programs, which makes it easier for foreigners to start businesses in 13 special zones, began in 2015 and has approved more than 380 people as of April. Most are in big cities like Tokyo and Fukuoka, while smaller cities have struggled to attract foreign talent.
Around 35,000 foreign nationals lived in Japan under the business management residency status as of the end of June, about twice as many as in 2015, the Immigration Services Agency reports. Despite this growth, the government thinks the hurdles to foreigners starting a business in Japan remain too high.
Japan ranks 21st out of 24 countries in attractiveness as a destination for potential startup founders, the Organisation for Economic Co-operation and Development reports, based on factors such as the number of multinational companies, tax policy and the ability to acquire the nationality.
Yuki Kojima, president of Resorz, which helps Japanese companies expand overseas, said hurdles for foreign entrepreneurs in Japan include the difficulty of opening a bank account.
Japan's venture sector is less mature than that in Europe or the U.S. and lacks enough talent to support it, said Samuel Davis, CEO of Amplified AI, an American company that provides artificial intelligence patent search services and operates primarily in Japan.
Kempei Monna was born in Shanghai. He runs Kauche, a Japanese startup that develops applications for e-commerce.
"The biggest challenge is the language," Monna said. "If you can't speak Japanese, you cannot even complete the incorporation procedures."
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