OK, quick trivia question: “Who was the first person on a working holiday visa to start their own company in Japan?”

Answer: To the best of my knowledge, it was me, back in 1983.

...Indeed, I remember like it was yesterday - having an argument with a Japanese Immigration officer in February 1984, when I showed up for a visa renewal (I came in on a Working Holiday visa - Australia/Japan were first for this). The officer asked me who I worked for and I told him that I had started my own small company. He spluttered, “You can’t do that on a Working Holiday visa!” But in fact, back then there were no explicit rules against my doing this, and it wasn’t until much later that the concept of having to keep your work activities within the bounds of the visa type was introduced.

In fact, even today, a Working Holiday person can still legally establish a company here, but unlike 1983 they wouldn’t be able to use it to justify income in applying for a long-term residence. In my case, I then made the argument even more moot by changing from the Working Holiday to a spouse visa, so I didn’t get to test the system fully, but nonetheless, my employer was me. It was around this early stage in my career that I realized that for a highly bureaucratic country, Japan in times of change offers opportunities everywhere for the enterprising foreign entrepreneur.

It Used to be a Lot Worse

I started Yugen Kaisha LINC Japan in 1983, and I quickly started finding opportunities that required smarter people than I. Unfortunately it was almost impossible for a foreign entrepreneur to hire skilled Japanese staff back then and I wished over and over that I could “import” my skilled workers so as to take advantage of the many tantalizing market opportunities that kept popping up: PC servicing, virus busting, onsite engineers, software development, local area networks and services... But bringing in foreign talent during the 1980’s was extremely difficult as Immigration had an administrative policy that you could only hire one foreigner for every JPY50MM of revenue you made as a company - which back then meant besides myself I had exactly one foreign guy working for me.

Then one fine morning in 1990, the Japanese government realized that they really needed more computer engineers (and still do), many of whom were ultimately to come from India, so they changed the rules and allowed even startups to bring in an indeterminate number of skilled foreigners. I recognized a starting gun when I saw one, and from 1990 I aggressively traveled to and recruited in India (visiting my newly established Mumbai office every couple of months). By 1995 I had assembled a team of over 100 staff, of which about 50% were non-Japanese. This was my first really successful venture, LINC Computer Inc., and I would never have been able to achieve such radical growth without the immigration laws being modified. Moreover, Japan would never have received the million dollars plus in tax they got from my earn-out in 1995, either.

My point is that until recently Japan has had very little legislation around immigration, for the good reason that it’s been (and still is) a political hot potato. While foreigners like me were an oddity, the laws only got modified here and there as immediate business needs demanded it, but otherwise the politicians made it clear for decades that Japan did NOT WANT to have an immigration policy. Under the covers, of course, it was a different story. The Tatemae voice to the voting public was “no foreign immigrants” but under the guise of student and technical trainee visas, the Honne was that several million people entered.

So for those of us in business during the 2000’s until maybe 3 years ago, bringing in foreign hires was always an unsure thing but somehow doable. Sometimes it was dead easy and we could get an employee a work visa in 3 months flat, and other times, especially for folks from SE Asia, it could take years. This was just par for the course and we would counsel our new offshore hires that they might have to work and wait as a remote employee for months or even years to get in. It was just luck of the draw.

When Did Immigration Become a “Thing”?

I would say the turning point in the Japanese government’s attitude to structured immigration probably came about in the early to mid 2010’s with the Abe government. There were three groups of foreign immigrants that precipitated this, as well of course, as the macro factors of a rising China and Japan’s looming negative population crisis. These three groups started making local and international headlines, embarrassing the government into finally taking concrete action.

The group with the greatest impact were the “trainee visa” laborers who mostly came from Vietnam and Nepal, and who were starting to commit crimes of desperation because they were treated like slaves. The terrible conditions included having their passports seized by employers, being paid just JPY300/hour, and women being forbidden to get pregnant if they wanted to keep their jobs. This situation came to a head when the US State Department identified in 2014 that the guest worker scheme in Japan was a facilitator of forced labor. Then in 2016, they produced another report noting that trainees regularly paid JPY1MM or more in recruitment fees and so had massive debts before they even got to Japan. After this negative international publicity, the “Gaiatsu” (social pressure from overseas) was clearly a big motivator for the government to clean up its act - even though it took another 7 years and a downgrade on the US’s Human Trafficking ratings to Level 2, to really ram the message home.

A second but much smaller group was the young Filipinas and Thai girls (so-called “Japayuki”) coming in on entertainer visas. They hit the news in 2004 when a US State Department report revealed the involvement of the Yakuza and how the girls were trafficked as sex slaves. In 2005 this resulted in new legislation that required two years prior experience as an entertainer, and although that doesn’t seem too hard to meet as a hurdle, the number of entertainer visas issued in 2006 plummeted from 82,000 to just 8,000. This btw contributed to a fake marriages boom, which the government also cracked down on in the mid-2010’s.

The third group has been more fascinating, less out in the open, and more difficult to deal with - is that of Chinese immigrants entering as university (or language school) students, then using the university > academia/finance track to live permanently in Japan. I believe that in the minds of right-wing politicians, these people pose a greater “threat” to the integrity of Japanese society, because they are typically in jobs of high responsibility, including as lecturers, bankers, technologists, researchers, and others who can influence the course of Japanese lives. Certainly they are harder to exclude than semi-literate field and factory workers.

In 2017, a Prof. Futao Huang of Hiroshima University found that as much as 45% (if including researchers) of Japan’s international faculty of 5,351 people was of Chinese origin, meaning about 2,400 academics. Based on that ratio, if we look at 2026 numbers, then according to MEXT Japan’s stats the international faculty in Japan has grown an additional 54% to 9,900 academics - translating to perhaps 3,700 Chinese-descent staff today. It doesn’t sound like a lot in the context of the nation’s 193,000 (JP govt. 2025 stat) tertiary teachers, but if you consider class sizes of 60-100, then year after year, that is 220,000+ Japanese young minds influenced by another culture’s values - particularly in finance and economics. Again, I’m not defending preservation of “Japanese values” by pointing this out, just trying to frame how a nationalistic Japanese policy maker might see this as a threat and partly why I think the Takaichi government is now taking action.

The thing about immigration is that if you don’t admit you allow it, then you can’t overtly control it. Because of this conundrum, the Abe government surreptitiously, due to the looming demographic cliff being faced by Japanese industry, pretended there was no immigration - even as a million more people arrived. With the passing of Abe, the country was ready for a different approach which arrived with the right-wing landslide win by PM Sanae Takaichi. All of a sudden, the narrative and the real policies have radically changed.

A Breakthrough, Not a Crack Down

Thanks to the right-wing shift of governments globally, and due in no small part because Japan likes to echo social developments in the USA, a new strategic opportunity has appeared to the government in dealing with immigration. My take is that the so-called “harsh” measures being implemented currently are actually a sly exercise by the Takaichi government to pander to Japan’s ever-present and vocal racist minority, while in fact actually implementing the nation’s first real immigration expansion policy in generations. And in my opinion, whomever came up with this strategy is a genius.

The government now gets to distract its suffering population from the effects of a weak yen, by vilifying the “other” group of immigrants (a la Trump and Le Pen) - but in fact under cover of “punishment for foreigners” they are actually implementing a full-blown expansive immigration policy. The numbers speak for themselves. In 2015, the number of immigrants as ratio of overall population was just 2%, a number that had been ever so slowly rising from 0.9% since 1990. However, from 2015 until 2025, the ratio has hit 3.3% and looking at the government’s plan for “controlled immigration” the population of 4.12MM non-Japanese today is going to skyrocket to a much-discussed (but still speculated) cap of 10MM by 2040.

As I say, disguising this trend as punishment is, well, political genius.

Opportunities as an Entrepreneur

What does this mean for today’s entrepreneurs? If you are already an employer, you can start imagining a scenario where all those previous controls on who you could hire as a semi-skilled (vs. laborer) non-Japanese are going to evaporate, at least for another 5-10 years. Where in society are there semi-skilled shortages? If you need drivers, warehouse people, engineers, machinists, builders, creative staff, or whomever, you are probably going to be allowed to hire them. My full realization of what this represents came about after talking to a logistics company owner friend and seeing how excited he got about bringing in non-Japanese truck drivers. This was an inconceivable concept in a bedrock industry even just 3 years ago - imagine if there was an accident involving a foreign driver? But due to an industry crisis as drivers age out, it’s now fast becoming a reality and we’re having foreign drivers popping up all over. I think this rapid capitulation is partly thanks to the great job the combini operators have done with their foreign staff - especially in basic language and etiquette training, which has earned the staff an almost uniformly strong local reputation over the last 5 years. As an example, the Japanese media lapped up the case two years ago of a female Vietnamese clerk who won first place in 7-Eleven’s national customer service competition.

Of course, there will continue to be plenty of bureaucracy in the way, both from the Japan side with the new language and other rules, and also abroad from collaborating bodies like the Philippines’ DMW/POEA. But nonetheless, the door is opening and we should get ready for a slew of new workers coming in.

Relevant to my own space (www.japantravel.com and www.akiya2.com), which is travel and hospitality, a major pain point has been not enough housekeeping staff. Unfortunately, because a large chunk of the hospitality sector is foreign-owned, the political lobby for this sector is limited, but nonetheless an important financial contributor to Japan’s export earnings. So until there is a major call for this sector, what about some creative thinking? One area I am looking at is the rather arbitrary Designated Activities visa - yes a bit of a stretch for cleaners, but what if your project is essential for the long-term success of a local community and the cleaning staff do other jobs as well? What if you have the support of local business and government because you’re attracting tourists to a rural area? What if you are a struggling inn trying to reestablish in Wajima, Noto after a disaster? In my experience, such inputs are often surprisingly well received by Immigration - you just need to put a human face on your activities and be willing to take on more responsibility for the visa process and your employees’ and local communities’ well-being. Conversely, for those multinationals averse to such commitments, I believe some entrepreneur will make a ton of money outsourcing to them.

I’m also considering bringing in carpenters, to address Japan’s aging out of this sector and because we need them so as to fulfill a plan to build a network of 100 homes. Given that we specialize in timber buildings, I am looking for people in places like Indonesia, where there are concentrations of skilled woodworkers. This may sound unrealistic, but in fact, I recently met a multi-million dollar accommodation company which plans to do its own Japan builds, in 2-by-4 timber, from exactly this labor pool.

Japan is going to become an even more fascinating place when the merits of a Kanawa-Tsugi (Symmetrical Scarf Joint) are going to be argued by a foreign carpenter from Java...!

Harder if You’re the One Looking for a Visa

If you’re an aspiring entrepreneur, then, yes, the future is currently rather more unclear. I would say that instead of getting upset with the increased cost of a Business Management visa, where forming a company now requires a minimum capital of JPY30MM and one full-time local employee, you should look at other ways to get in, then build later once you are ready to reach for that tier - which in reality isn’t that challenging. If it was me and I was 24 again, I would get a job with a Japanese firm, get my bearings and my human network started, get my language skills to N2 (doable within a year), THEN I would consider plunging into a self-owned venture.

Raising the new JPY30MM capital requirement will also actually improve your chances of business success, and while it may sound like a lot of money, it doesn’t need to be impossible. I ask new entrepreneurs, “How many friends do you have who would love to start a company, have the money, but just are too comfortable in their paid jobs?” You only need a dozen or so such friends willing to live vicariously through your efforts, combined with your own savings, to put that JPY30MM together.

Running a restaurant on a shoestring budget? Yeah, that’s not going to work any longer. But if you’re game to feed the world, why not approach a Japanese established company president and have them invest in you to get started? In fact, a friend of mine from an emerging nation did this recently. He won the right to operate an ethnic food restaurant at a leading expo, then using that right, he turned around and brokered it to a Japanese food operator, so that he could fund and implement his project. In other words, he used his imagination to make the “impossible” happen.

More Exceptions

Lastly, I’m finding that Japanese Immigration isn’t always draconian. As I mentioned previously, there is an interesting and fast-rising category called “Designated Activities” where if your skills or intent are of use to the country, the Agency has the discretion to let you do a surprisingly broad range of activities. Just recently I met a young North American couple out on the Geiyo islands, living and enjoying their time in Japan. They are self-supporting with remote jobs, have bought a house for almost nothing and are doing it up, and they’re learning how to live with the local community (they are popular) - surprisingly, they are on a “Designated Activities” visa. This is the first time I’ve come across lifestyler types getting this type of visa, and I’d have thought they would have been forced to do the Digital Nomad one, but no.

This shows that even if your objective is something nebulous, like revitalizing countryside Japan, you may still be considered. OK, they are not laborers from SE Asia, but it is a noticeable change in the Agency’s attitude that what used to be a uniform “No, you can’t do that.” is now something more flexible.

As most readers will know, I’ve been running www.japantravel.com as an inbound travel business in Japan since 2013, although I originally decided on the sector in April of 2011, post Tohoku earthquake. Creating a media platform to help rebuild tourism was a response to my own difficult situation back then, where I felt I had nothing to lose by starting a “social impact” business. Seems funny to use the term social impact now, but let’s remember that back in 2011 no one in their right mind wanted to invest in a sector targeting customers who were terrified to come to Japan due to exploding nuclear power plants and ongoing natural disasters. Indeed, most resident foreigners (302,000 of them) were hopping the next flight abroad.

Whether dumb or lucky, my bet on inbound travel turned out to be well timed for the bottom of what has since become a massive business expansion cycle. As of last year, 36.87MM foreigners visited Japan, putting the country at the No. 11 spot in global top tourist destinations in 2024. This is an almost 600% increase over 2011, and those millions of travelers spent about JPY8.1TRN (US$52BN approx.) here, according to the Japanese travel industry magazine Travel Voice. This equates to about 1.3% of GDP, and while that doesn’t seem like a lot, the secondary effects of all this extra revenue flooding in has been lifting many other boats.

For example, property values are going up, especially in rural areas near ski fields, services and products manufacturers and retailers have switched target markets and are hiring again so wages are going up, and the food industry as a whole is experiencing huge windfalls from free-spending tourists, ensuring that more exotic produce is now available across the country. Based on a Japanese academic study done some years ago when inbound spending was about 0.8% of GDP, it was found that the knock-on benefits of inbound/domestic tourism represented about 8% (mostly through employment at service companies) of GDP. So if we’re now almost double that number for inbound, the major area of expansion, I think we can reasonably assume that tourism as a slice of the economy probably stands at 10-12% now. Not too shabby, and I don’t think it’s over yet.

There are many reasons why Japan has become travel flavor of the year in 2025. Prime among these are 4 factors that are convincing people, especially teens - who then nag their parents - to come here: it’s cheap, it’s safe, it’s entertaining, and the food is fantastic. If these core ingredients don’t change too much, it’s hard to see Japan’s popularity declining. OK, many people are coming here because it’s on their bucket list, so the argument is that once done, they will go somewhere else. According to Wikipedia, about 1.5% of the worlds 3.5BN wage earners are at US$50,000 in income or higher, which is a sweet spot for people traveling to Japan. So that means a potential audience of 52.5MM wage earners plus their families - meaning around 250MM people in total. This implies that Japan could enjoy a stream of first timers for up to 7-8 years at the current rate. For the boom to continue longer, either the world needs to get a lot richer, which is doubtful, especially as the current political environment is likely to increase the GINI coefficient for most countries, OR, there will be repeat travelers.

Repeat travelers are in fact, highly beneficial to Japan. Not only do they hold up the inbound tourism numbers, but more importantly, as they grow familiar with the country they become more confident in striking out into more remote regions, and find ways to self-drive and self-service. Eventually, some of them become sufficiently enamored with Japan that they want to own property here, and this is a thesis we’re using for a new company called www.akiya2.com. I believe the JP government needs to prioritize repeat tourists and allocate a slice of the JPY45BN or so of this year’s departure taxes to promoting policies and investments that support people coming here annually - much like British people have second homes in Spain or France. Unfortunately at the same time, there is a specter of xenophobia rising over foreign property ownership, so I also expect the JP government to start implementing more regulation over who can buy what.

Back to the main question: is the tourism boom going to continue? Will the Japanese government hit its target of 60MM inbound travelers by 2030? My guess is that based on the audience size (TAM) above, coupled with likely ongoing gyrations in the financial world due to Trump, the chances of growth to 60MM travelers are slim. Getting to 38MM-40MM this year, maybe. However, even if Trump does tip the global stock and bond markets upside down, about 70% of inbound tourists this year are coming from nearby Asian countries, so Japan for them is “local” and safe, and therefore a reactionary precipitous drop in 2025 travelers due to tariffs is unlikely.

2026 is a lot less clear. If the yen stays relatively cheap (above JPY130 = US$1), and if the USA introduces even more fear for non-citizens traveling there, then Japan could become even more of a welcoming safe haven for tourists. On the other side of the coin, though, the global political/economic uncertainty does seem to be pushing the Japanese yen once again into the role of being a safe haven for non-US funds, which will mean a strengthening yen. So my prognosis is that a greater than 10% yen appreciation against the dollar will not derail most people’s travel plans for this year, but for those booking 2026 travel, it will make a difference and for some countries like South Korea and China (currently about 48% of the inbound volume), it will significantly constrict inflows.

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[Ed:] I mentioned our recently-established traditional homes business www.akiya2.com. In fact, the team is doing its first funding round - a friends and family pre-seed round. If you are interested in supporting the renovation and commercialization of traditional Japanese homes, and are among the first 49 people to respond, we will send you more information. Contact me at terrie@lincmedia.co.jp.