The Immigration and Naturalization Service has announced its policy to relax the requirements for residence status in order to make it easier for foreign entrepreneurs to start a business in Japan. The revision will allow funds obtained through paid-in stock acquisition rights to be counted as capital. This measure is intended to promote the establishment of businesses and the attraction of highly skilled human resources to Japan.

The guidelines for the ‘Management/Administration’ visa status of residence granted to business owners and managers will be revised, whereby the sustainability of a company's business and the actual involvement of foreign nationals in its management will be included in the evaluation criteria.

In addition to the existing requirements, the use of paid-in stock acquisition rights (J-KISS type) will be newly permitted for fundraising. This policy change is based on a proposal by the Cabinet Office's Regulatory Reform Promotion Council. Previously, foreign entrepreneurs were required to have at least 5 million yen in capital in addition to business capital, but this high hurdle has been a major obstacle for startups. The new regulations will allow more foreign entrepreneurs to start businesses in Japan by allowing them to raise funds from investors even without their own capital.

In order to attract highly skilled foreign human resources in the international competition for talent, the Japanese government established a new system in 2011 that allows engineers with an annual income of 20 million yen or more to apply for permanent residency after one year of residence. It is also considering establishing a special zone where foreign angel investors can invest in startups to enable residency.

This deregulation is expected to attract highly skilled personnel from abroad to Japan, while simultaneously fostering the startup industry in the country.

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