Co-Founding a Company in Japan: Highly Skilled Professional (Category 1-c) vs. Business Manager Visa—Which Should You Choose? Guide to Overcoming the JPY 30M Requirement and Multiple Applicant Screening

This article is written by a Japanese local.

“My foreign business partner and I are co-founding a startup in Japan. Should we apply for a ‘Highly Skilled Professional (HSP Category 1-c)’ visa or a ‘Business Manager’ visa?”

“What specific immigration criteria and warnings apply when multiple co-founders apply for visas for the same company?”

When international elite talent with outstanding expertise and capital co-found a business in Japan, selecting the right visa is a critical strategic decision that directly dictates corporate growth speed and family life stability.

In light of immigration law amendments that **strictly raised the Business Manager visa requirement to ‘JPY 30 Million+ Capital AND 1+ Full-Time Resident Employee,’** the hurdles for multiple co-founders to all obtain Business Manager visas have escalated dramatically.

This article provides an exhaustive practical comparison between “HSP Category 1-c” and “Business Manager” visas for co-founders, examining screening criteria, capital thresholds, Permanent Residency (PR) pathways, and family privileges to prevent joint visa rejections.

1. Comparative Overview: HSP Category 1-c vs. Business Manager Visa for Co-Founders

Key statutory differences co-founders must evaluate include:

• Criteria & Thresholds: Business Manager visas strictly evaluate business scale (JPY 30M+ capital, physical office, full-time staff). HSP Category 1-c requires proving business scale PLUS achieving 70+ individual points (education, work history, executive compensation).
• Multiple Applicants (Co-Management): Obtaining multiple Business Manager visas under 1 company strictly requires completely separated executive compensation, explicit role division (e.g., CEO vs. CTO/COO duties), and multiplied business scale. For HSP Category 1-c, objective individual points are prioritized, making multiple approvals smoother if individual point criteria are satisfied.
• Permanent Residency (PR) Timeline: Business Manager visas generally require 10+ years of physical residence (with several years of stable executive performance). HSP Category 1-c allows PR applications in 3 years with 70 points, or as short as 1 year with 80 points.
• Family & Parent Privileges: Business Manager visas do not allow parent sponsorship, and spouse work is restricted to 28 hours/week (Dependent status). HSP Category 1-c grants “Parent Sponsorship Privileges” (if household income exceeds JPY 8M with a child under 7) and “Spouse Full-Time Work Privileges” (Designated Activities No. 33).

2. Scenarios Where Co-Founders Should Choose “HSP Category 1-c”

Selecting “HSP Category 1-c” provides overwhelming advantages if you or your co-founder meet the following conditions:

Scenario 1: You Scoring 70+ (or 80+) Points in the HSP Point Calculation

When combining academic degrees (Bachelor’s, Master’s, Ph.D. from domestic or international universities), past executive/management experience (3 to 10+ years), and confirmed executive salary from the new company (e.g., JPY 10M+ annually) to reach 70+ points.

Because screening is based on objective numerical criteria, proving your necessity and excellence as a co-founder to immigration examiners becomes logically straightforward.

Scenario 2: Seeking Permanent Residency (PR) in the Shortest Timeframe

Ideal for elite founders wanting to secure Permanent Residency within 1 to 3 years post-establishment. Obtaining PR completely eliminates visa renewal burdens and business restrictions, significantly easing VC fundraising, M&A, and new business expansions.

Scenario 3: Preserving Spouse Careers or Sponsoring Parents from Home Countries

If a co-founder’s spouse wishes to work full-time in Japan to maximize household income (Designated Activities No. 33), or if you need to sponsor parents from your home country to assist with childcare/housework, the special privileges of HSP Category 1-c are indispensable.

3. Scenarios Where Co-Founders Should Choose “Business Manager Visa”

Conversely, opting for the standard “Business Manager Visa” is appropriate under the following circumstances:

Scenario 1: Falling Short of 70 Points in the HSP Point System

If you lack a university degree, have limited past management experience, or must set executive compensation low to preserve early startup cash flow, resulting in points below 70. In this case, apply for a Business Manager visa after ensuring the corporate entity fulfills the JPY 30M+ capital and full-time employee requirements.

Scenario 2: Business Scale is Massive with Clearly Separated Capital and Executive Duties

When co-founders contribute substantial individual capital (e.g., JPY 30M+ each) and one serves as CEO overseeing overall management while the other serves as CTO or COO overseeing distinct technical or operational departments with separate executive authority.

If objective evidence (organizational charts, duty allocation regulations, board appointment statements) proves that “having 2 executive visa holders in 1 entity is absolutely essential,” all co-founders can successfully obtain Business Manager visas.

4. Practical Timeline to Prevent Joint Visa Rejections for Co-Founders

The most critical risk to avoid in co-founder visa applications is joint rejection caused by suspicions of “overlapping duties” or “nominal executives.”

• STEP 1 (Capital Structuring & Ownership Ratio): Prove capital sources for JPY 30M+ (eliminating “straw money” suspicions). For multiple applicants, structure voting ownership ratios logically.
• STEP 2 (Articles of Incorporation & Duty Allocation): Completely separate the executive scope (CEO, CTO, CFO) and chain of command in company regulations. Set executive compensation appropriately reflecting respective contributions and liabilities.
• STEP 3 (Point Evaluation & Combination Strategy): Calculate individual points for all founding members. Decide the optimal visa combination (e.g., one founder applying for HSP 1-c while another applies for Business Manager).
• STEP 4 (Business Plan & Explanation Statement): Objectively prove the necessity of a co-founding structure alongside business viability, continuity, and profitability using numerical financial projections.

5. Frequently Asked Practical Questions and Edge Cases (Q&A)

Below are authoritative answers regarding co-founder visa selection in Japan.

Q1. Is a combination where one co-founder applies for “HSP 1-c” and another applies for “Business Manager” permissible?

A. Yes, this is a fully permissible and highly strategic combination. Having a CEO who meets point criteria apply for “HSP Category 1-c” while a co-founder with lower points applies for “Business Manager” is logically sound under immigration screening. This diversifies corporate visa risk and maximizes approval rates for both founders.

Q2. Do multiple co-founders applying for visas under the same company need separate office spaces?

A. No, sharing the same physical office space is fully acceptable. However, the office must feature dedicated executive desks and operational setups for each executive. Submitting office layout blueprints and physical facility photographs is required to disprove paper company or nominal executive suspicions.

6. Conclusion: Align Your Visa Strategy with Corporate Resources and Long-Term Goals

Choosing between visas for co-founders is not merely an administrative procedure; it is a core corporate strategy that governs company capital/organizational design and founder long-term goals (PR and family sponsorship).

Evaluating your point calculation alongside your co-founding structure against the JPY 30M capital rule—and selecting the optimal combination of “HSP Category 1-c” and “Business Manager” visas—is the key to passing immigration screening and ensuring startup success in Japan.

If you require expert guidance on co-founder visa selection, point evaluations, or multiple Business Manager applications, consulting with a legal specialist in Japanese immigration practice is highly recommended.