Timeline for Permanent Residence Application After Changing from Work Visa to Business Manager Visa#

More foreign nationals who have been working in Japan under work visas (such as “Engineer/Specialist in Humanities/International Services”) are choosing to establish their own companies and switch to a “Business Manager” visa. A common concern for these individuals is how this change affects their eligibility for Permanent Residence (PR), specifically whether the required residency period resets and how many years they must wait before applying.

This article provides an objective explanation of the timeline for PR applications after switching from a work status to a management status, the critical screening criteria, and special exceptions that may shorten the required period.

The General Rule: 10 Years of Residence#

First, it is essential to understand the standard legal requirements for Permanent Residence in Japan. In principle, an applicant must satisfy the following condition regarding residency:

Continuous residence in Japan for 10 years or more.
Within that period, continuous residence for 5 years or more under a “Work” or “Residential” status.

The term “Work status” includes not only visas for employees but also the “Business Manager” visa. Therefore, switching from an employee visa to a Business Manager visa does not reset the 10-year countdown, provided there is no break in the continuity of residence (such as leaving Japan without a re-entry permit or letting the visa expire).

For example, if an individual works under a standard work visa for 7 years and then runs a company under a Business Manager visa for 3 years, they meet the requirement of “10 years of residence” and “5 years of work status.” The misconception that one must wait another 10 years after changing visa types is incorrect.

The Critical Hurdle: The “Longest Period of Stay” Requirement#

While the total number of years may be sufficient, a technical requirement regarding the current visa duration often delays applications.

To apply for Permanent Residence, the applicant must currently hold the “longest period of stay” defined by the Immigration Control Act. In current administrative practice, holding a visa with a duration of 3 years or more is a mandatory prerequisite.

Even if an applicant held a 3-year or 5-year visa while working as an employee, switching to a Business Manager visa often results in the Immigration Bureau granting a 1-year period initially. This is because newly established companies with no track record are typically monitored closely through annual renewals.

If the current visa duration is “1 year,” the Permanent Residence application will not be accepted, even if the applicant has lived in Japan for over 10 years. The applicant must build a track record of business stability and receive a visa renewal of “3 years” or more before they can stand at the starting line for a PR application. This is often the primary cause of delay after switching statuses.

Stricter Screening Criteria for Business Owners#

Even if the residency requirement is met and a 3-year visa is obtained, the screening process for business owners is significantly stricter than for employees. Simply living in Japan is not enough; the following aspects are rigorously examined:

1. Business Stability and Continuity#

For employees, screening focuses primarily on personal salary. For business managers, the financial health of the company is also scrutinized. It is generally required that the company is profitable, preferably for the last two fiscal years. If the company is in a state of insolvency (liabilities exceeding assets) or excessive deficit, the probability of denial is extremely high. The authorities assess whether the business has a stable foundation to continue paying the owner’s remuneration.

2. Executive Remuneration and Income Requirements#

When starting a business, some owners set their executive remuneration low to save on taxes or improve company cash flow. However, this negatively impacts PR applications. The requirement to have “assets or skills sufficient to earn an independent living” typically translates to an annual income of at least 3 million JPY for a single person. If the applicant has dependents, a higher income is required. A balance must be struck where the owner pays themselves a sufficient salary while the company remains profitable.

This is the most common reason for rejection. Employees have taxes and social insurance deducted automatically, preventing missed payments. Business owners, however, are responsible for these payments themselves. Scrutiny covers:

Personal obligations: Resident tax, Income tax, National Health Insurance/Pension (or Employees’ Insurance).
Corporate obligations: Corporate tax, Consumption tax, Withholding income tax, and Corporate Social Insurance (Shakai Hoken).

It is mandatory for all incorporated companies to enroll in Social Insurance (Health Insurance and Welfare Pension), even if the owner is the sole employee. Failure to enroll the company in Social Insurance due to “low sales” or other reasons will result in the denial of Permanent Residence. strict adherence to payment deadlines is also required. If there are past delays, the applicant often needs to accumulate a record of perfect on-time payments for the most recent 1 to 2 years before applying.

Shortening the Period via the Highly Skilled Professional (HSP) System#

While the general rule is 10 years, the “Highly Skilled Professional Point System” can significantly shorten this period. This system applies to Business Managers as well.

Based on the Point Calculation Table for Business Management, the residency requirement is relaxed if the applicant scores high enough:

80 Points or more: Eligible after 1 year of residence (if points were 80+ one year ago and remain 80+ now).
70 Points or more: Eligible after 3 years of residence (if points were 70+ three years ago and remain 70+ now).

For business managers, points are awarded for criteria such as annual income, academic background, Japanese language proficiency, and also business-specific metrics like “Capital amount” or “Trade volume.” If a business owner meets these high-level criteria, they may apply for Permanent Residence without waiting 10 years. However, even under this system, holding a visa term of “3 years or more” remains a mandatory requirement.

Conclusion#

Switching from a Work Visa to a Business Manager Visa does not reset the 10-year residency count for Permanent Residence. However, if the new visa is granted for only “1 year,” the applicant must wait until they earn a “3-year” visa through successful renewals.

Furthermore, Permanent Residence applications for business owners involve a thorough examination of not just personal conduct, but also business continuity and fulfillment of public obligations (especially corporate Social Insurance enrollment). For entrepreneurs aiming for Permanent Residence, meticulous corporate management and strict legal compliance from the outset are the most effective paths to success.