Japan to Launch Angel Investor Visa, Ease Investment Requirement for Entrepreneur Stream

In a bid to attract startup capital, Japan plans to introduce a new five-year residency visa for angel investors and venture capitalists, aiming to make it easier for foreign investors to live and work in the country while supporting the growth of local startups, reports Nikkei Asia.

The new investment visa, which could be available as early as the next fiscal year beginning in April 2024, will apply to 13 national strategic special zones in Japan.

Details on the qualification requirements remain scant for now, though reports suggest they will include stipulations for investor track records and net worth and that the government plans to model the scheme on successful programs in other countries. Japan’s Financial Services Agency will play a role in administering the new program.

The introduction of the angel investor visa follows other recent moves by Japan to attract skilled foreign talent. The country is actively courting international investors and entrepreneurs in an effort to stimulate an economy weighed down by its demographic profile.

As Japan’s population ages and shrinks, the government sees foreign workers, entrepreneurs, and investors as crucial to maintaining economic vitality and competitiveness. However, the country still lags behind most other developed economies in the percentage of foreign residents, and some critics argue it needs to do more to create a welcoming environment for international talent and investments.

Last year, the government adopted a policy under which it would let foreign entrepreneurs live in the country for two years without making any investments or even maintaining a fixed place of business in Japan under the so-called Business Manager residence permit. Originally, this visa required an up-front investment of ¥5 (about US$33,000), as well as a registered office in Japan. Recognizing that many early-stage businesses have negative cash flow in the first several years, Japan has waived the requirement for office premises and investment for the initial two years.

The new angel investor visa could be an important step towards making Japan a more attractive destination for global startup capital. Its impact, however, will depend on the specific details of the scheme and the overall ease of doing business in Japan for foreign nationals.

According to IMI’s Citizenship Catalog, Japan is also one of Asia’s more open countries in terms of naturalizing foreigners. The country’s nationality law allows foreigners who have lived for at least five years in the country (three years if married to a Japanese national) to apply for citizenship. This would allow successful angel investors to apply for naturalization after their five-year residency period. Note, however, that Japan does not permit dual citizenship.