Obtaining a Business Manager Visa for an SES Business! Why On-Site Work by the Representative is Banned and Legal Setup

Many foreign engineers working in the Japanese IT industry think, “I want to establish my own SES (System Engineering Service) company, obtain a Business Manager Visa, and start a business.”

However, during the screening for a Business Manager Visa, the SES business faces uniquely high hurdles. In particular, it is absolutely not permitted under the Immigration Control Act for the representative (president) who established the company to work on-site at a client company (SES).

This article thoroughly explains why the representative working on-site is fatal when obtaining a Business Manager Visa for an SES company, and details the legal “management structure” and the “Worker Dispatch Business License” hurdle you must overcome to win Immigration’s approval.

1. Two Reasons Why the Representative’s On-Site Work Leads to Immediate Rejection

SES is a business model where engineers are stationed at a client’s office to provide technical services. However, if the president holding a Business Manager Visa works in this manner, they will be subject to visa cancellation or rejection upon renewal (immediate failure) for the following reasons:

(1) Violation of Office Requirements (Deemed a Dummy Office)

To obtain and maintain a Business Manager Visa, securing an “independent, physical business office (your own office)” and operating the business there is an absolute condition. If the president is stationed at a client’s site 5 days a week, it is judged that “the contracted company office is not being used at all and lacks substance (it is a dummy),” thereby failing the office requirement.

(2) Deemed as “Manual Labor” (Fieldwork) Rather Than Management Activity

Under the Immigration Control Act, Business Manager Visa holders must substantially engage in the “management or administration of the business.” Going to a client’s site yourself to write programming code or perform system maintenance is considered “manual labor (fieldwork)” that should be done under a working visa (Engineer/Specialist in Humanities/International Services), and is not considered a manager’s job.

2. Building the “Correct Management Structure” to Get a Visa with an SES Company

To obtain a Business Manager Visa through an SES business, you must transition from being the “product that is stationed (player)” to the “manager who hires and manages the stationed engineers.”

In your business plan, you must objectively prove the following structure:

• Role of the Representative (You): Stationed at your own office, focusing on “management and administrative duties” such as cultivating new clients (sales activities), interviewing and hiring engineers, drafting contracts, and managing employee attendance and payroll.
• Role of the Employees (Engineers): Foreign or Japanese engineers hired by the company are stationed (SES/dispatched) at client companies.

In short, if you establish an SES company, it is highly likely to be deemed unviable as a business unless you have the plan and financial capacity to hire at least one or more “engineers who actually work on-site” other than yourself.

3. The Biggest Overlooked Hurdle: “Worker Dispatch Business License” and Asset Requirements

When conducting an SES business that stations engineers at client sites, there is another extremely high hurdle to clear: the “Worker Dispatch Business License.”

Under Japanese law (Employment Security Act / Worker Dispatching Act), SES—where engineers work under direct instructions from the client—is almost always classified as “worker dispatching” in practice. To avoid disguised contracting and legally operate an SES (dispatch) business, you must obtain a dispatch business license from the Ministry of Health, Labour and Welfare. To get this license, you must clear the following strict financial requirements:

• Pure Assets: 20 million yen or more (per business location)
• Cash and Deposits: 15 million yen or more

4. Summary: Checklist for Obtaining a Business Manager Visa in the SES Industry

Aiming to obtain and maintain a Business Manager Visa in the SES business requires a much higher level of legal strategy than a typical startup.

• Absolute Prohibition of On-Site Work: Prove a structure where the representative absolutely never works on-site at a client’s office, but instead focuses on management, sales, hiring, and administration at the company office.
• Securing Employees: Create a hiring and payroll plan to employ engineers (employees) who will work on-site.
• Proof of Dispatch License and Financial Capacity: To avoid disguised contracting, build a business plan premised on obtaining a “Worker Dispatch Business License” and present a financial foundation that clears the 20 million yen pure asset requirement.

The combination of an SES Business and a Business Manager Visa is a highly difficult area where the Immigration Control Act intricately intersects with the Labor Standards Act and the Worker Dispatching Act. Before registering the company or signing an office lease, be sure to consult qualified professionals, such as Administrative Scriveners well-versed in both the IT and HR dispatch fields, to build a perfectly legal route.