Starting a Business in Japan: Visa Rules for Foreigners | MyKyoten

Last verified: 2026. This guide is based on Immigration Bureau regulations, Ministry of Health Labour and Welfare guidelines, and standard Japanese administrative practice. It is informational only and does not constitute legal advice. Consult a licensed immigration attorney or official government sources for case-specific guidance.

Does Your Visa Actually Let You Do This?

This is the question most guides skip entirely. The answer determines whether you're operating legally or quietly building a case for an immigration investigation.

Japan's visa system grants permission to be present and permission to engage in specific activities. These are not the same thing. Your residence card lists your status of residence. Whether you can earn income outside that status is a separate legal question.

Visa categories that generally permit sole proprietor activity without additional applications include: Permanent Resident, Spouse of Japanese National, Spouse of Permanent Resident, Long-Term Resident, and Highly Skilled Professional (within the scope of designated activities). Holders of these statuses typically have broad or unrestricted work permissions built in.

Visa categories that restrict what you can do include: Engineer/Specialist in Humanities/International Services, Business Manager, Skilled Labor, and Specified Skilled Worker. If you hold one of these and want to operate a sole proprietorship outside your designated occupation, you need a separate immigration permission before you start.

The specific form is the "Permission to Engage in Activity Other Than That Permitted Under the Status of Residence Previously Granted" (資格外活動許可申請). You file this at your regional Immigration Services Bureau. The standard processing time is roughly two to four weeks. Filing costs nothing. Operating without it when required is a violation of the Immigration Control Act and can result in visa non-renewal or, in serious cases, revocation.

Before you touch any business registration paperwork, use the Visa Work Checker to confirm what your current status actually permits. Many people find out their visa is more restrictive than they assumed.

Warning Box A Canadian graphic designer on an Engineer/Specialist in Humanities/International Services visa started taking freelance translation clients on the side, registered as a sole proprietor, and opened a business bank account, all before checking her visa's activity scope. Her translation work fell partially outside her designated occupation. When she applied for permanent residency two years later, immigration flagged the income discrepancy against her visa type. The PR application was denied. This is not a theoretical risk. See more about how immigration can revoke or deny status.

→ Check whether your current work activities are permitted under your visa status using the Visa Work Checker.

How Do You Actually File the Business Opening Notification?

The 開業届 (Kaigyo-todoke), formally titled the "Notification of Opening of Business," is submitted to the tax office (税務署) that covers your residential address, not your city hall, not your ward office. Find your assigned office via the National Tax Agency website.

The form is one page. The National Tax Agency publishes it as Form A-1. Key fields you will fill in:

1. Your name and address in Japan 2. Your My Number (Individual Number) 3. The date you started business activity (this is the trigger date, not the filing date) 4. Your type of business (be specific, not vague) 5. Whether you are also filing for blue-return tax treatment simultaneously

The deadline is within one month of starting business activity. If you miss it, the tax office does not fine you. There is no automatic penalty for late filing of the 開業届 itself. However, missing it costs you something real: you cannot retroactively elect blue-return bookkeeping (青色申告) for the tax year in which you started, and that costs you the ¥650,000 deduction explained below.

You can submit by mail, in person, or via e-Tax with a My Number Card. The office stamps a copy for your records. Keep it. Banks, some landlords, and certain government programs ask for it.

What Does This Actually Cost to Start?

Here is where sole proprietorship makes obvious sense for most foreigners at the beginning stage.

Sole proprietor (個人事業主): Registration fee is zero. Filing the 開業届 costs nothing. Your only upfront cost is time and potentially a certified translation of identity documents if the tax office needs clarification.

Kabushiki Kaisha (joint-stock corporation): Minimum startup costs run ¥60,000 to ¥250,000 or more, depending on whether you use a notary and judicial scrivener. You need registered capital (no legally required minimum since 2006, but practically banks want to see something meaningful), a registered address, and corporate articles of incorporation.

Comparison Table | Factor | Sole Proprietor | Kabushiki Kaisha | |---|---|---| | Registration cost | ¥0 | ¥60,000+ | | Time to set up | 1-2 days | 2-4 weeks | | Liability | Personal (unlimited) | Limited to investment | | Tax filing complexity | Moderate | High | | Credibility with large clients | Lower | Higher | | Visa relevance | Often sufficient | Required for Business Manager visa | For a foreigner testing a side income or freelance service, sole proprietorship is the correct starting structure. If you are trying to sponsor your own Business Manager visa, a corporation becomes legally necessary.

What Happens to Your Health Insurance and Pension the Moment You Go Solo?

If you were employed full-time in Japan before this, you were on shakai hoken (社会保険): your employer's health insurance and the Employees' Pension (kousei nenkin). The day you stop being a regular employee, you exit that system.

You then have two options: join kokumin kenko hoken (国民健康保険, National Health Insurance) through your city or ward office, or continue your former employer's insurance voluntarily for up to two years (任意継続). Most sole proprietors end up on kokumin kenko hoken.

The premium calculation for kokumin kenko hoken is based on your previous year's income as reported on your tax return. This is the delay that surprises most newly self-employed foreigners: your first year's premiums are calculated on your last year of employment income, which may be higher than what your business is currently earning.

For pension, you move to kokumin nenkin (National Pension), currently ¥16,980 per month (as of 2025 figures, subject to annual revision). You register this change at your city hall or ward office. Bring your residence card and previous insurance card.

If you need help reading the insurance documents you receive, the Health Insurance Notice Decoder can walk you through what each section means. More detail on the pension transition is at this guide on pension and social insurance for foreigners.

Reality Check Based on reports from foreign residents, the first kokumin kenko hoken premium notice often arrives before foreigners have had time to understand the calculation. A Brazilian web developer who left a Tokyo IT company in March and registered as a sole proprietor in April received a combined insurance premium notice in June totaling approximately ¥180,000 for the first installment period, calculated on his previous ¥6,000,000 employment income. He had expected something much lower based on his early business earnings. This bill is real and not negotiable without a formal income reduction consultation at the city office.

Which Tax Obligations Switch On Immediately?

Two systems you need to understand right away: quarterly estimated tax payments and the choice between blue-return and white-return bookkeeping.

If your business income is expected to exceed ¥150,000 in tax liability for the year (roughly, business profit after deductions exceeding around ¥1,000,000 to ¥2,000,000 depending on your circumstances), the National Tax Agency will require you to make estimated tax prepayments (予定納税) in July and November. These are based on your prior year's tax assessment, so they typically don't apply in your first year of business. But plan for them from year two.

Blue-return (青色申告) versus white-return (白色申告) is the more immediate decision.

White-return requires almost no formal bookkeeping. Blue-return requires double-entry accounting records but gives you access to the ¥650,000 special deduction (or ¥550,000 if filing without e-Tax). On a business profit of ¥3,000,000, that deduction saves you roughly ¥97,500 in income tax at a 15% marginal rate, plus additional savings on resident tax. Over three years, this is a material amount of money.

To elect blue-return for a given tax year, you must file the application by March 15 of that year, or within two months of starting business. This is why missing the 開業届 deadline or delaying the blue-return application destroys your first-year advantage.

Step-by-Step Checklist: First 60 Days as a Sole Proprietor

• Confirm your visa's activity permissions before registering anything
• File 資格外活動許可 at immigration if required (allow 2-4 weeks)
• Submit 開業届 to your assigned 税務署 within one month of start date
• Simultaneously file the blue-return election application (青色申告承認申請書)
• Notify your city office of insurance and pension status change
• Open a dedicated business bank account (keeps records clean for tax)
• Begin double-entry bookkeeping records from day one of business activity

Your next step: go to your regional Immigration Services Bureau website, confirm your visa category's work scope in writing, then download the 開業届 from the National Tax Agency site and file it with the blue-return application on the same visit.

If I already filed the 開業届 without checking my visa first, what should I do?

Stop new business activity immediately if you're uncertain about your permissions. Consult a licensed immigration attorney before your next step. Filing the notification itself is not a crime, but earning income outside your visa's permitted scope is a violation. Use the Immigration Risk Checker to get an initial read on your situation.

Can a Specified Skilled Worker register as a sole proprietor?

Generally no, without specific additional permission. Specified Skilled Worker status is tightly tied to designated industry activities with a sponsoring employer. Operating an independent business typically falls outside that scope. Verify with your regional immigration bureau or a qualified attorney before proceeding.

What happens if I file the 開業届 late?

No direct fine for late 開業届 filing. The real cost is losing the ability to file the blue-return election for the current tax year if the two-month window from your business start date has already passed. That means losing the ¥650,000 deduction for that entire tax year.

If your tax documents, insurance notices, or government letters from this process are arriving in Japanese and you're not sure what they're saying, the Document Decoder lets you identify what each form is asking for and what action it requires. When you're newly self-employed in Japan, paperwork moves fast and the consequences of missing a notice are real.