Japan plans to introduce an innovative residency program that offers up to five years of residency for angel investors. This initiative aims to inject vital capital into the country’s emerging startup scene.
The new residency status, scheduled to take effect in April of the next fiscal year, will cover 13 distinct national strategic areas earmarked for economic growth and innovation. Eligibility criteria for obtaining residency will include submitting investment proposals, assessing past performance, and assessing financial assets, VisaGuide.World reports.
To protect against financial crimes such as money laundering, the local authorities overseeing the specially designated areas will be entrusted with the certification and supervision of participating angel investors. Additionally, residency holders will be expected to play an active role in fostering the growth of startups by providing corporate guidance and mentorship.
Residency Program Enhances Japan’s Startup Ecosystem with Investor Guidance
To improve Japan’s startup ecosystem, residency holders will actively boost startup growth by providing corporate guidance and mentorship. This measure aims to ensure that the residency program attracts genuine investors committed to supporting Japan’s economic development.
Last October, Tokyo’s Shibuya ward proposed a tailored residency program for angel investors to attract growing investment to the country’s startup scene. The government plans to expand this initiative beyond Shibuya, including all designated particular strategic areas.
Despite a notable increase in venture capital investment in Japan, reaching 270.6 billion yen ($1.82 billion) in fiscal 2018, according to Mizuho Research & Technologies, the numbers remain significantly lower compared to the substantial VC funding of 14.4 trillion yen in the United States.
In this regard, Japan aims to draw knowledge from existing residency programs around the world, such as the US initiative, where immigrant investors can secure permanent residency by investing $800,000 or more. However, concerns still need to be addressed regarding introducing a tailored residency program for investors, as illustrated by the United Kingdom experience.
Following suspicions of illegal inflow of funds and possible corruption links, the British government stopped accepting applications for an extension of stay in February 2022.
35,000 Foreign Nationals Resided Under Business Management Status in Japan in 2023
As of the end of June 2023, approximately 35,000 foreign nationals resided in Japan under the business management residency status, marking a significant increase compared to 2015, according to the Immigration Services Agency.
According to the Organisation for Economic Co-operation and Development (OECD), Japan ranks 21st out of 24 countries in terms of attractiveness based on various factors such as the presence of multinational companies, tax policies, and the ease of acquiring nationality.
