Two things about the JPY 30 million requirement are widely misunderstood. The first is that you must incorporate to hold the Business Manager status — you do not; a sole proprietor can hold it. The second is that the JPY 30 million means the same thing either way. It does not, and the difference is large enough to change which structure makes sense.
A corporation: paid-in capital, and nothing else
For a company, the figure the Immigration Services Agency measures is the amount of capital actually paid in — 払込済資本の額, the stated capital of a KK, or the total contribution of a GK, GMK or GSK.
What does not count is the part that catches people. The Agency’s own Q&A excludes capital reserve, capital surplus and retained earnings (資本準備金・資本剰余金・利益剰余金). Only stated capital counts.
The reserve split is a trap here
Standard Japanese incorporation practice often puts half of a contribution into stated capital and half into capital reserve. There are ordinary reasons for it, mostly tax-related, and an accountant proposing it is giving you conventional advice.
It would also destroy your visa application. Contribute JPY 30 million and book half as capital reserve, and your stated capital is JPY 15 million — half of what the status requires. The company is properly capitalised in every commercial sense and does not meet the immigration criterion.
This is the sort of thing that goes wrong when the incorporation adviser and the immigration adviser are different people who have not spoken. If you are working with two firms, this is the specific question to put to both: the full amount goes into stated capital, correct?
A sole proprietor: total invested, which is a different kind of number
For an individual, the Agency measures the total invested as necessary to run the business — 事業を営むために必要なものとして投下されている総額. The components it names are:
- Securing business premises
- One year of employee wages
- Equipment investment
Evidence comes from recent tax filings and receipts.
Read that list again, because it is not the same species of number as paid-in capital. A company must park JPY 30 million. A sole proprietor must have invested JPY 30 million across things the business needs — and a year of the employee’s wages, which the reform makes mandatory anyway, counts toward it.
In other words, money you were going to spend on operating the business contributes to the threshold, rather than sitting separately as capital. For some founders that is a materially easier bar; for others, without the spend already made and documented, it is harder, because receipts and filings must show it has actually happened.
So why does almost everyone incorporate?
Because the immigration threshold is one consideration among several, and the others point the other way.
| Sole proprietor | Company | |
|---|---|---|
| JPY 30m measured as | Total invested — premises, a year’s wages, equipment | Paid-in capital only |
| Liability | Unlimited and personal | Limited |
| Bank account | Personal-name business account; corporate options limited | Corporate account — hard to open, but the thing counterparties expect |
| Client perception | Weaker with Japanese corporates | Expected |
| Social insurance | Enrolment generally only from five employees | Compulsory from incorporation, headcount irrelevant |
The liability line alone decides it for most people. Unlimited personal liability in a country whose legal system you are still learning, in a language you may not read, is a different proposition from limited liability.
The social insurance line is worth noticing too, and it cuts the other way from what founders expect: incorporating creates an obligation that a sole proprietor with one employee does not have. We cover what that costs in social insurance and the mandatory employee.
The comparison nobody sets up properly
The honest framing is not “which is better” but “which constraint binds you”.
If your obstacle is having JPY 30 million to park, the sole-proprietor measurement may fit a founder who is going to spend heavily on premises, staff and equipment in year one regardless. The money does the same work either way; only the accounting of it differs.
If your obstacle is credibility with Japanese counterparties, or protecting personal assets, no measurement advantage compensates. Incorporate.
And if you incorporate, the choice between a KK and a GK is a separate decision with its own trade-offs, which we work through in KK or GK?
What to ask
- If we incorporate, is the entire contribution going into stated capital, with nothing to capital reserve?
- If I remain a sole proprietor, what documentation of invested amounts will the application rest on, and do I already have it?
- Which of my constraints is actually binding — the capital, the liability, or the banking?
The first question takes ten seconds and prevents a category of failure that is invisible until the application is refused.
The rest of the requirements are in what the October 2025 rules actually require, and the capital figure has a tax consequence of its own — see the consumption tax trap. Our directory lists the firms that handle both incorporation and immigration, and which of them publish their fees.
This summarises published criteria. Which structure suits your business is a question for a licensed professional who can see your figures.