The Corporate Immigration Review: Japan
Introduction to the immigration framework
i Legislation and policy
To begin with, 2021 marked the year that the mobility of people both locally and globally faced immense challenges once again, brought about by one of the most communicable diseases to emerge in human history, and especially since a great number of people started to travel by air. The government of Japan implemented a series of emergency measures against covid-19 to regulate or relax entry and stay in Japan, with updates being released every week or month from January until December, over the course of the whole year, with 2022 following suit. Japan has accepted the new entry of only 151,725 foreign nationals in 2022 and 3,581,443 in 2021, while 28,402,509 entered in 2019.
The Immigration Control and Refugee Recognition Act, Cabinet Order No. 319 of 1951,2 the Ordinance for Enforcement of the Immigration Control and Refugee Recognition Act, the Ordinance of the Ministry of Justice No. 54 of 1981 and other relevant ministerial ordinances are the main sources of immigration law in Japan. In addition, the Act on Proper Technical Intern Training and Protection of Technical Intern Trainees governs technical interns and relevant organisations, while the Nationality Law controls the acquisition and loss of Japanese nationality.
Including working and activity-based status categories, Japan has resident status categories based on an applicant's relationship with Japanese nationals or permanent residents of Japan. A spouse, child or grandchild of a Japanese national is generally permitted to stay in Japan with a resident status. The following resident status categories are available in Japan: permanent resident, long-term resident, spouse or child of Japanese national, and spouse or child of permanent resident. These status categories have no restrictions on the range of activities that the foreign national may engage in. In contrast, the activity-based category includes work visas with restrictions on the range of activities that the foreign national may engage in. These working status categories are discussed in detail in Sections IV and V.
Permanent residence in Japan can be sought only after having lived in the country for at least one year. A person is not able to apply for a Japanese permanent residence visa from outside Japan. Japan, unlike other countries such as the United States, has no concept of immigrants in its immigration policy. Therefore, immigration intent at the port of entry is not questioned and has no effect on a person's visa application. In other words, most workers may change their status to permanent resident status after a certain number of years' lawful stay.
Tokyo's long-established basic policy on the granting of work authorisations only to highly skilled workers was changed explicitly with the introduction on 1 April 2019 of the new specified skilled worker (SSW) labour visa status. Medium-skilled workers with SSW status are expected to fill Japan's labour shortage areas.
Recent trends in Japanese immigration policy can be observed in the Basic Plan for Immigration Control and Residency Management published in April 20193 and the 2021 Immigration Control and Residency Management Report.4 Topics discussed in the report include:
- measures to deal with covid-19 in the Immigration Services Agency;
- the system of Specified Skilled Workers;
- efforts for acceptance and coexistence of foreign nationals;
- the status of operation of the technical intern training programme;
- smooth and strict implementation of immigration examination at the port of entry;
- measures against illegal and impostor foreign residents;
- promotion of appropriate and prompt refugee protection;
- responses to international society and international situations; and
- improvement of public relations activities and public services.
ii The immigration authorities
Ministry of Justice, Ministry of Foreign Affairs and others
Two branches of the government deal with immigration matters on a day-to-day basis: the Ministry of Justice (MOJ), operating through the Immigration Services Agency (ISA) and its eight regional immigration bureaus; and the Ministry of Foreign Affairs (MOFA), which has responsibility for overseas embassies and Japanese consulates.
If a person requires an employment-based status, his or her employer in Japan must first file an application for a Certificate of Eligibility at the local immigration office in Japan, which falls within the purview of the MOJ. The person is then required to present the certificate to an overseas Japanese consulate office, which is controlled by the MOFA. Upon the issuance of a working visa by the consul, the person must apply for landing permission at the port of entry where he or she will also be subject to examination by an immigration official.
During the person's stay in Japan, his or her working status will be exclusively controlled by the local immigration office.
Some low or medium-skilled foreign workers are first screened by another ministry before their applications are considered by the MOJ immigration authorities. For instance, under the Technical Intern Law, the MOJ and the Ministry of Health, Labour and Welfare (MHLW) approved the establishment of the Organisation for Technical Intern Training (OTIT).5 The OTIT examines applications for the technical intern programme before the Immigration Services Agency conducts its assessment for the issuance of visas. Similarly, before their applications are dealt with by the MOJ, SSWs are allocated only to companies belonging to associations supervised by the Ministry of Land, Infrastructure, Transport and Tourism; the Ministry of Agriculture, Forestry and Fisheries; the Ministry of Economy, Trade and Industry; and the MHLW.
In general, immigration authorities have broad discretion when they make a decision on immigration matters. However, their discretion is not limitless, as it is subject to judicial review (as are administrative decisions), but only in cases where excess or abuse of discretion is found. Examples include mistakes in the recognition of material facts or extremely unjust judgments contrary to common sense, such as a clearly unreasonable interpretation of facts.
Other than the above two major ministries (MOFA and MOJ) that have control over the entry and stay of foreign nationals, the Ministry of Health, Labour, Welfare has temporarily had a critical role during the past couple of years, as preventing the novel coronavirus or infected persons from entering Japan and spreading in the country has been a matter of higher priority than boosting the economy.
In other words, it has been a period wherein the matters of primary importance are people's lives and health, with money coming second. Therefore, approval by the MHLW becomes superior in importance to examinations by the MOJ and MOFA.
iii Exemptions and favoured industries
The difficulties that Japan faces as a society often result in foreign workers being welcome in certain industries more than other industries. The SSW status is designed to fill labour shortages in the following 14 industry fields only:
- the nursing care industry;
- building cleaning management;
- the machine parts and tooling industry;
- the industrial machinery manufacturing industry;
- the electric, electronics and information industry;
- the construction industry;
- shipbuilding and ship machinery industry;
- automobile repair and maintenance;
- the aviation industry;
- the accommodation industry;
- fisheries and aquaculture;
- the food and beverages manufacturing industry; and
- the food service industry.
International treaty obligations
In relation to Japanese work visas, three programmes favour certain nationality groups pursuant to bilateral agreements and for historical reasons: special permanent residents (those who lost their Japanese nationality pursuant to the peace treaty in 1952 after the Second World War); nurses and care workers from Indonesia, the Philippines and Vietnam, pursuant to bilateral agreements; and young foreign nationals on the working holiday programme.
i Special permanent residents
Special permanent residents are 'those who lost Japanese nationality pursuant to the Treaty of Peace with Japan', namely Koreans and Taiwanese people who have lived in Japan as Japanese citizens, and their descendants who were born and have lived in Japan continuously. Later generations from Korea and Taiwan or China do not qualify for this status of residence. Under the Special Act on the Immigration Control of, Inter Alia, Those Who Have Lost Japanese Nationality Pursuant to the Treaty of Peace with Japan, Act No. 71 of 1991, they are treated differently from ordinary permanent residents, as special permanent residents could be technically considered former Japanese nationals. For example, unlike ordinary permanent residents, special permanent residents are not required to state the reasons for their application during the process of naturalisation.
ii Nurses and care workers from Indonesia, the Philippines and Vietnam
Nurses and care workers are among the most-needed categories of workers in Japan, which currently faces the problem of an ageing society exacerbated by a low birth rate. For nurses and care workers from Indonesia and the Philippines, both of which have signed economic partnership agreements with Japan, a special programme is available that allows them to study in Japanese schools and practise in Japan after passing the national examination for obtaining a licence (since 2008 for Indonesians and since 2009 for Filipinos). Vietnamese people were added to this programme in 2012 under the bilateral agreement between Japan and Vietnam. Because of the nature of medical services, however, professional communication skills in the Japanese language are a prerequisite, with no exemptions. This language barrier has effectively hampered many from benefiting from this programme.
iii Working holiday programme
The working holiday programme, which enables young foreign nationals to spend a year or more in Japan while taking up part-time employment, is available for eligible foreign nationals whose home countries have reciprocal agreements with Japan. Japan now has agreements with 26 countries and regions. There is no limit on numbers from Australia, New Zealand, Denmark, Germany, Norway, Sweden and Portugal, while a maximum number that can be issued per year is fixed with Canada, France, Austria, Poland, Slovakia, Ireland, the United Kingdom, Hong Kong, South Korea, Taiwan, Argentina, Hungary, Spain, Lithuania, Estonia, the Netherlands, Iceland and Chile.6
Practically speaking, as of 1 March 2022, working holiday visas will not be issued unless there is a guarantor organisation in Japan responsible to fulfil the applicant's requirement for quarantine where no applicant in general has such organisation beforehand.
iv Visa exemption agreement
Japan has taken measures concerning visa exemption arrangements with 68 countries and regions, which are indicated on the Ministry of Foreign Affairs website.7 However, as of 1 March 2021, all visa exemption measures were suspended apart from only seven countries and regions, as border measures against coronavirus. However, these arrangements have been suspended as of 1 March 2022, with the exception of Canada, the United States, Chile, Turkey, Mauritius, North Macedonia and Serbia as border control measures against covid-19.
The year in review
The unusual year that was 2021 ended with a total ban on any new entrants. Foreign nationals who are recognised to have special exceptional circumstances corresponding to an individual situation, such as the need for humanitarian consideration or the need for public benefit, were the only ones allowed to enter in addition to the spouse or child of a Japanese national or permanent resident, the spouse or child of a foreign national where the foreign national has the residence status 'long-term resident' or a foreign national who is to acquire the residence status of 'diplomat' or 'official' at the end of December.
As mentioned in the opening sentence, this far east island country experienced a drastic decrease in the numbers entrerring the country or national isolation. During December 2021, a total of 2,783 foreign nationals were allowed to enter with new entry landing permission, one with business manager status, four with engineer or specialist in humanities or international services status, one with intra-company transferee (ICT) status and four with highly skilled professional (HSP) status for the whole month. Japan accepted only 151,725 new entries from foreign nationals in 2021, which is 99.5 per cent down from 28,402,509 in 2019.
Even under the extraordinary recent circumstances, when the country almost shut its doors to foreign nationals, there are some changes and preparations to accept more foreigners. One sign is the government granted a special 'Designated Activities' status to hundreds of people who fled from Afghanistan to live and work in Japan with their families even when they were not recognised as refugees by the screening process. The other change is accepting low-skilled and medium-skilled workers, which showed further progress. A total of 49,666 were registered with SSW status at the end of 2021. Some SSW residents are students from school or controversial technical interns and a few others are from new entries. They are expected to help labour shortage industries while the country recorded the lowest birth rate in 2021, impacted by the various restrictions on the gathering of people.
As one of the efforts towards 'Acceptance and Coexistence of Foreign Nationals', the Foreign Residents Support Centre (FRESC) opened in July 2020 and was operating throughout 2021 by providing one-stop information services. It is formed by four ministries and eight other organisations and is expected to be the flagship to navigate toward building a society together with multinational people.
From July 2021, in the examination on HSP status, extra points are given to financial professionals going to work for specific businesses in Japan, together with additional preferential treatment in hiring a housekeeper, in order to realise Japan as an international financial centre open to the world.
i Work permits
The specific work visa categories and brief descriptions of their respective permitted activities are as follows:
- professor: research, or guidance of research or education, at a university, an equivalent educational institution or a college of technology;
- artist: engaging in artistic activities that produce income, including music, the fine arts and literature;
- religious activities: missionary and other religious activities dispatched by a foreign religious organisation;
- journalist: journalistic activities based on a contract with a foreign press;
- business management (BM): engaging in the operation or management of international trade or other businesses;
- legal and accounting services: engaging in a legal or accounting business that may lawfully only be carried out by registered foreign lawyers, certified public accountants or those with other legal qualifications;
- medical services: engaging in medical treatment services that may lawfully only be undertaken by physicians, dentists or those with other legal qualifications;
- researcher: engaging in research based on a contract with a public or private organisation in Japan;
- instructor: language instruction or other education at an elementary school, junior high school, senior high school, secondary school, school for special needs education, vocational school, miscellaneous educational institution or other educational institution equivalent to a miscellaneous educational institution in terms of facilities and curriculum;
- engineer, specialist in humanities or international services (EHI): engaging in services that require technology or knowledge pertinent to physical science, engineering or other natural scientific fields, and jurisprudence, economics, sociology or other human sciences fields;
- engaging in services that require specific ways of thinking or sensitivity acquired through experience of foreign cultures on the basis of a contract with a public or private organisation in Japan;
- ICT: personnel who are transferred to a business office in Japan for a limited period from a business office established in a foreign country by a public or private organisation that has a head office, branch office or other business office in Japan, and who engage in any of the activities listed within the engineer, specialist in humanities or international services categories at the business office;
- caregiver: engaging in caregiving activities only to be undertaken by holders of licences for certified care workers after graduation from designated schools in Japan;
- entertainer: engaging in theatrical performances, musical performances, sports or any other form of showbusiness;
- skilled labour: engaging in services that require industrial techniques or skills belonging to special fields on the basis of a contract with a public or private organisation in Japan;
- specified skilled worker (SSW): engaging in (1) work requiring skills that need a considerable degree of knowledge or experience particular to the specified industrial field and (2) requiring expert skills in specified industrial fields;
- technical intern: acquiring skills on the basis of an employment contract with an organisation in Japan; and
- highly skilled professionals.
Only workers from eight of the above categories (instructor; researcher; engineer/specialist in humanities/international services; caregiver; skilled labour; SSW; technical intern; and HSP) are required to provide evidence of a contract with an organisation in Japan, which can be an employment contract or another type of contract, at the time of application. Of these, only the technical intern category is designed for engagement of workers in low-skilled jobs for a limited period (i.e., a maximum of three years) for the purposes of acquiring skills, technology and knowledge. Family members of technical intern and SSW status holders are not allowed to stay with a dependent visa status unlike other work visa types.
The status itself allows a non-Japanese citizen to carry out the relevant authorised activities without having to acquire a work permit.
Timeline of employment visa status
The employer in Japan and the foreign prospective employee first conclude an employment agreement, which will be in effect when the employee acquires the required work status.
The employer in Japan then applies to the relevant regional immigration bureau for a certificate of eligibility (COE). This process takes two to eight weeks, excluding time spent gathering documents. In case of rejection, appeals to the Minister of Justice are not available, although reapplication is technically possible.
Upon receipt of the certificate, the employer forwards it to the prospective foreign employee overseas for the visa application.
From 1 March 2022 onward, the employer has been required to receive a certificate of registration (COR) in online quarantine system conducted by the health ministry or MHLW, as the certificate is temporarily a prerequisite document to visa application. The COR is issued by the Entrants Returners Follow-up System online portal (ERFS).
The employee applies to the embassy or Japanese consulate in his or her jurisdiction for a visa based on the issued COE and COR. The Japanese embassy or consulate then reviews the application documents, including the certificates, and decides whether to endorse the visa. Obtaining the certificates does not always guarantee the issuance of the desired visa by the embassy or consulate.
When the foreign prospective employee arrives at the port of entry in Japan, the immigration officer will conduct a landing examination. If the foreign national is found to be suspicious, a special inquiry officer will hold a hearing. After successful completion of the examination, a residence card will be issued along with landing permission at the airport.
Frequently changing quarantine measures are imposed at the time of visa application, before and after arrival such as covid-19 tests, vaccine certificates, self-isolation, online reports, etc., as of March 2022.
Once the foreign national enters the country and commences his or her job, the foreign national's employer is required to notify the Ministry of Health, Labour and Welfare via the local public employment security office of the subsequent discharge of the foreign worker. In addition, the foreign national must register his or her residence at a municipal office.
Once the certificate of eligibility has been issued, some regional immigration offices may exceptionally allow the applicant to change his or her status while he or she is staying in Japan with temporary visitor status. In such cases, he or she does not need to appear in person at a Japanese overseas consulate. It takes around a week to obtain permission for a change of status and obtain the proper working status with a certificate. The residence card is issued when permission is granted for the change of status.
ii Labour market regulation
In consideration of the influence of foreign workers on the Japanese labour market, the Japanese MOJ has laid out specific conditions for each work visa category (except those of professor, artist, religious activist and journalist) in a ministerial ordinance.
Nearly all the conditions for work visas have the requirement that the foreign worker receive a salary of no less than what a Japanese national would receive for comparable work. This is to prevent the employment of cheap foreign workers affecting the Japanese labour market and work conditions. Other conditions typically include requiring degrees or a certain amount of work experience, or both, in addition to other qualifications. This is to prevent employment of under-skilled foreign workers.
One especially notable point is that many documents among the required documentation concern the employer itself. The Immigration Services Agency generally checks two things: whether the foreign national in question fits the specific criteria, and whether the employer is truly financially capable of hiring the foreign national on a long-term basis while providing adequate support. This is to prevent foreign workers being discharged for financial reasons soon after arrival.
The newly introduced SSW visa enables low and medium-skilled foreign workers to engage in jobs only in the 14 industries recognised by the government as serious labour-shortage areas.
iii Rights and duties of sponsored employees
A sponsored employee is to engage in the activities permitted within the scope of his or her visa category. He or she may not, therefore, engage in other money-earning activities enumerated in different visa categories, unless he or she obtains either a special permit to engage in those other activities on a part-time basis, or permission to change his or her residence status to another category.
Sponsored employees are free to resign from their jobs, and for the rest of its term the visa basically remains valid until its expiry date (that is, if the resigning worker finds a new position within the permitted scope of the visa category for the previous job).
If the resigning worker is uncertain about whether his or her new position is within the scope of his or her visa category, he or she may wish to consider applying for a certificate of authorised employment. On the basis of the description on the application form, the immigration control authorities check whether the foreign worker's new job is within the scope of his or her visa category; if it is, they will issue the certificate of authorised employment specifically indicating the foreign worker's authorised activities.
Foreign workers are required to report the fact that they have resigned from their job to the immigration authorities.
Furthermore, when foreign workers have failed to continue to engage in the activities permitted by their status for three months or more while residing in Japan, their status may be revoked by the Minister of Justice.
Investors, skilled migrants and entrepreneurs
i Investor visa status
The Japanese work status aimed at entrepreneurs is the business manager visa category. The Japanese concept, however, is significantly different from its counterparts in other countries. In short, Japan does not have a programme that allows a foreign national to 'buy' a visa to live in Japan; preference is given to foreign nationals who have real businesses that are up and running, rather than those with money alone.
The particular advantage of the business manager status is that the minimum amount of money that has to be put into the business to obtain this visa is relatively small: approximately ¥5 million. This offers an opportunity to foreign entrepreneurs with only a relatively small amount of capital. A certificate of company registration, evidences showing the amount and source of investment, physical office facility, viable business plan should be examined in ISA screening.
Like other working status visas, the business manager visa is activity-based. The only permitted activities are those within the scope of the status: the foreign national in possession of that status cannot engage in other money-earning activities enumerated within other visa categories. This is quite different from a status-based visa, such as that granted to the spouse of a Japanese national, and with which the foreign national can engage in any kind of activity. If the foreign national stays in Japan with a business manager visa and would like to engage in activities other than running a business, such as working for another company as an employee, he or she either has to obtain special permission to engage in those other activities on a part-time basis or change his or her residence status.
ii Self-sponsorship status
Some entrepreneurs work for their own small business without any staff members and, rather than applying for BM or business manager status, they may be able to stay under EHI or engineer or specialist in humanities or international services categories. Those categories need a contract with an organisation in Japan but do not necessarily require the entrepreneur to be employed by that organisation. To be eligible for self-sponsorship status, applicants need to submit two or more contracts with organisations to the immigration authorities.
Meanwhile, some local municipalities have been offering special programmes to support applications for BM status for entrepreneurs living overseas by giving authorisation on the business plan before COE examination at ISA. The city of Sendai, Shibuya in Tokyo, Yokohama, Osaka and Fukuoka, the Prefecture of Hokkaido, Ibaraki, Aichi, Gifu, Mie, Kyoto, Oita and Tokyo have such programmes. Registration of the company is not required at the time of COE application in these programmes.
iii Skilled migrants
Permanent residence or immigrant status has never been conferred on foreigners without having lived in Japan with some status of residence for a certain period of time for the purposes of work under the long-established Japanese immigration policy. However, since April 2017, this regime has been amended to permit the granting of permanent residency after one year's work in Japan to highly skilled foreigners with a score of 80 points or more in the points-based calculation table.
Outlook and conclusions
Before the novel coronavirus pandemic, Japan expected to receive a large number of low and medium-skilled foreign workers. The new policy of accepting labour is expected to resolve many challenging issues such as, inter alia, an ageing society and a shrinking workforce. However, in facing the emerging difficult challenges presented by covid-19 from the beginning of 2020, Japan has had to tighten its borders temporarily as part of the isolation measures necessary to tackle this global pandemic. These exceptional two years or so must have been a preparation period to reform Japan's society to become a land of living together with a greater number and variety of foreign citizens by introducing several new measures. However, the number of entering foreign residents has declined, in fact, because of the communicable disease countermeasures. In a time where concerns over health should be fading away, security concerns are now coming from eastern Europe.
It is anticipated therefore that after overcoming the pandemic, the beneficial effects of the implementation of generous new policies for foreign citizens will revitalise both the country's economy and society in general while at the same time the country is in need of some action to regulate on trading, businesses, people's mobility as well as immigration for national security purposes. Both balancing and adjustment will also be required in immigration policy.
1 Masahito Nakai is the founder of Nakai Immigration Services LPC.