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Our company is in a negative net worth position due to poor performance. Can I still renew my Business Manager Visa?

You must submit a detailed business plan explaining how you intend to resolve the negative equity within one year, supported by an expert opinion from a licensed professional such as a CPA or SME consultant.

What Is Negative Net Worth（Insolvency）?

A negative net worth（Insolvency, SAIMU CHOKA, 債務超過） means a company’s total liabilities exceed its total assets. This is clearly shown on the Balance Sheet when the Net Assets are shown as a negative number. Such a financial state suggests that even if all assets were sold, the company could not cover its debts—indicating a high risk of bankruptcy.

Startups Can Easily Fall into Negative Net Worth

Most applicants for the Business Manager Visa start with ¥5 million in capital. A deficit of more than ¥5 million in the first year will result in a negative net worth. In reality, many startups generate less revenue than expected, while incurring high fixed costs like executive compensation, office rent, and business expenses.

Moreover, foreign entrepreneurs are required to rent a separate office (not their home) and pay themselves at least ¥200,000/month, which is not required of Japanese entrepreneurs. Businesses with large depreciation expenses (e.g., real estate leasing, restaurants) are particularly vulnerable.

Note that if you close your office or move your headquarters to a friend’s address or significantly reduce your salary after visa approval, renewal may be denied.

Requirements for Renewing a Business Manager Visa

If your company is in a state of negative equity, the Immigration Bureau requires proof that you can eliminate the negative balance within one year. You will also need to submit:

• A detailed business plan with realistic financial projections
• An official opinion letter from a qualified expert such as a certified public accountant or SME consultant

The cost of obtaining such a professional opinion is separate from the visa application and can be arranged through our office.

In such cases, your period of stay may be reduced to one year even if you currently hold a three-year visa. To stabilize your financial position and qualify for renewal, you may need to increase capital through funding or loans.

If your company records negative equity or operating losses (based on gross profit) for two consecutive years, your visa renewal is unlikely to be approved unless there is a substantial capital injection or restructuring support from a third party.

How to Eliminate Negative Net Worth

The following methods may be used to resolve negative equity:

Which method is appropriate depends on: (1) the size of the shortfall and required funding, (2) your monthly financial performance, (3) shareholding structure, (4) available personal funds, (5) procedural costs, and (6) tax considerations. Many low-cost tax advisors may not assist with this under standard retainers—be sure to confirm in advance.

Continental’s Support Services

At Continental Immigration, we’ve supported numerous Business Manager Visa renewals for clients facing negative equity. We can also refer you to qualified professionals such as CPAs and assist with communication between you and your tax accountant—especially if they are not well-versed in immigration law.

About the Author

Masakazu Murai
Foreign Entrepreneur Visa Specialist

Former investment banker at Mitsubishi UFJ Morgan Stanley Securities, advising clients on corporate finance and M&A. He also served as an executive board member of the labor union, advocating diversity and workplace improvement. Today, he focuses on immigration status and financial consulting for foreign entrepreneurs.

Certified Administrative Scrivener, CFP® (Certified Financial Planner), and Certified Member of the Securities Analysts Association of Japan.

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