Can a Newly Established Corporation Serve as a Guarantor for Japanese Visa Applications?#

Entrepreneurs establishing new companies in Japan often face a critical question when planning their workforce strategy: “Can a newly incorporated entity, with no financial history, act as a sponsor or ‘Identity Guarantor’ (Mimoto Hoshonin) for a foreign employee’s visa application?”

There is a common misconception that a company must be in operation for several years or demonstrate profitable financial results for a specific period before it can sponsor a visa. However, under the Japanese Immigration Control and Refugee Recognition Act, the regulations are designed to accommodate new businesses as well.

This article provides an objective and thorough explanation of the eligibility of newly established corporations to serve as guarantors, the classification system used by the Immigration Services Agency, and the specific documentation required to prove credibility without a financial track record.

Legal Eligibility of New Corporations#

Fundamentally, there is no legal requirement stating that a corporation must exist for a certain number of years to sponsor a work visa. A newly established company can serve as the “contracting organization” (sponsor/employer) for a Status of Residence, such as “Engineer/Specialist in Humanities/International Services” or “Business Manager.”

When a company hires a foreign national, the company typically acts as the guarantor. The primary concern of the Immigration Services Agency is not the age of the company, but its stability, continuity, and credibility. The agency needs to verify that the entity physically exists, conducts legitimate business, and possesses the financial capacity to pay the employee’s salary continuously.

Therefore, as long as the company is legally registered and proper notifications have been submitted to the tax authorities, it is eligible to apply. However, the burden of proof regarding stability is significantly higher for new companies compared to established firms.

Understanding the “Category” System#

The Immigration Services Agency categorizes organizations into four groups (Category 1 to Category 4) based on their scale and tax withholding records to determine the volume of required documents.

• Category 1: Listed companies, etc.
• Category 2 & 3: Companies classified based on the total amount of withholding tax from the previous year.
• Category 4: Companies that do not fall into Categories 1-3. Newly established companies almost always fall into this category.

Since a new company does not have a “statutory report on the total of withholding tax” (Hotei Chosho) from the previous year, it is automatically classified as Category 4. While Category 1 and 2 companies enjoy simplified procedures, Category 4 companies must submit a full set of supporting documents. This means the scrutiny is stricter, and the volume of paperwork is substantial.

Overcoming the Lack of Financial Statements: The Business Plan#

For existing companies, the Profit and Loss (P/L) statement serves as proof of financial health. A new company lacks this history. To substitute for this, the Business Plan (Jigyo Keikaku-sho) becomes the most critical document in the application.

A robust business plan for immigration purposes must objectively demonstrate the following:

1. Revenue Projections: Detailed monthly or yearly sales forecasts. It is crucial to attach supporting evidence such as contracts with clients or letters of intent, rather than just optimistic numbers.
2. Cost Structure: Clear breakdown of expenses, including the foreign employee’s salary, office rent, and operational costs.
3. Profitability: A logical explanation of how the company will achieve or maintain profitability to ensure the employee’s long-term employment.

If the business plan is deemed unrealistic or vague, the examiner may conclude that the employment is not sustainable, leading to a denial of the Certificate of Eligibility (COE).

Essential Documentation for New Entities#

In addition to the standard application forms, a newly established corporation must provide specific documents to prove its existence and readiness to operate:

1. Notification of the Establishment of a Salary Payment Office: A copy of this document, stamped by the tax office, is mandatory. It proves the company is registered as a salary-paying entity for tax purposes.
2. Office Lease Agreement: The immigration authorities strictly check for a physical office. Virtual offices or shared spaces without private rooms are often viewed negatively for work visas. The lease must be in the company’s name and clearly indicate the usage is for business.
3. Photos of the Office: Interior and exterior photos showing the company logo, workspace, and equipment help prove the physical existence of the business.
4. Certificate of Registered Matters: To prove the legal incorporation.

Justification of Employment Necessity#

Regardless of the company’s age, the “necessity” of hiring the specific foreign national is a key examination point. For a new company, this is even more pertinent. The authorities may question why a startup with uncertain revenue needs to hire a foreign national immediately.

The application must logically explain how the applicant’s skills (e.g., language ability for overseas expansion, specific IT skills for product development) are essential for the startup’s launch and growth. Furthermore, the employment terms, specifically the salary, must be equal to or greater than what a Japanese national would receive for comparable work. Low wages justified by “startup struggles” are not permitted.

Conclusion#

It is entirely possible for a newly established corporation to act as a guarantor for a Japanese work visa. There is no waiting period required after incorporation. However, being classified as “Category 4” entails a rigorous examination process where the absence of financial history must be compensated with a concrete, evidence-based business plan and proof of proper corporate infrastructure.

By thoroughly preparing documents that attest to the company’s business feasibility and the legitimacy of the hiring need, new companies can successfully sponsor foreign talent and drive their business forward from the very beginning.