‘Absolute nightmare’: in Japan, red tape is strangling foreign start-up owners

It has been several weeks since Beau Becker applied to the Japanese immigration office to extend his one-year visa for entrepreneurs, and he is dreading a repeat of last year’s scenario: a delayed approval process triggering a freeze on his bank account, preventing him from making payments.

“It was an absolute nightmare,” said Becker, who runs a health drinks start-up. “I can only pray that they’ll renew the visa.”

His annual ordeal is one of many frustrations he and other foreign entrepreneurs face after arriving in Japan, which has been trying to lure more start-up talent with special visas but is falling short in helping them stay.

Rigid rules around visa extensions, as well as a banking system and real estate market that are difficult for temporary residents to navigate, are among the barriers making it difficult for them to set up businesses long term, according to interviews with more than a dozen entrepreneurs living in Japan.

At stake is Japan’s bid to bolster venture capital investment and regain its innovative edge after falling behind in disruptive technologies like smartphones, social media and AI. Three years ago, then prime minister Fumio Kishida announced a plan to create 100,000 start-ups and 100 unicorns by 2027.

Currently, though, there are only around 10,000 start-ups and a handful of unicorns. Aware that immigrants are a key part of the US entrepreneurial ecosystem, the government sought to import top talent to help build up a start-up scene.