Becoming a Sole Proprietor in Japan: Visa Rules, Kaigyo Todoke & Tax

Quick answer (30 seconds): Filing as a sole proprietor (kojin jigyonushi) in Japan is administratively easy — the "kaigyo todoke" (notification of business opening) is a free one-page form you submit to the tax office within about a month of starting. The hard part is your visa: you can only freely run a business if your status of residence permits self-employment — that means spouse of a Japanese national, permanent resident, or long-term resident (teijusha). Most work visas do not allow open-ended self-employment, and to run an actual company you'd need the Business Manager visa (whose requirements were sharply tightened in October 2025). Check your visa first, then file.

Disclaimer: General information, not legal or tax advice. Immigration and tax rules are strict and changing — confirm your eligibility with the Immigration Services Agency (出入国在留管理庁) and the National Tax Agency (国税庁), and consider an immigration specialist (行政書士) or tax accountant (税理士).

Step 0 (the real first step): can your visa do this?

Before any paperwork, confirm your status of residence allows self-employment:

• Allowed (unrestricted): Spouse/Child of Japanese National, Permanent Resident, Spouse of PR, Long-Term Resident (teijusha) — these are status-based and let you work or run a business freely.
• Generally NOT allowed open-endedly: standard work visas (e.g., Engineer/Humanities/International Services) are tied to employment in a specific field — free self-employment usually isn't permitted without the right status or permission.
• To run a company / get a self-employment-based status: the Business Manager visa (see below).
• Tourist / visa waiver: no business activity allowed at all.

If you're on a work visa and want to freelance on the side, that's a different question — see the side-job & visa-rules guide.

The Business Manager visa got much stricter (Oct 2025)

If you want a visa based on running your business, the Business Manager visa requirements were significantly tightened in October 2025:

• Capital: ¥30 million minimum (raised from ¥5 million — a sixfold increase).
• Employees: at least one full-time Japanese national, permanent resident, or long-term resident.
• Experience: 3+ years of management experience or a relevant Master's degree.

This is now a serious commitment — get professional advice before counting on it.

Filing the kaigyo todoke (if your visa allows)

Once you're eligible, the registration itself is simple:

1. File the "kaigyo todoke" (個人事業の開業・廃業等届出書) at your local tax office within about one month of starting. It's free and one page.
2. Also file the "blue return" application (aoiro shinkoku) — submit it by March 15 (or within ~2 months of opening) to unlock big tax benefits.
3. Set up bookkeeping (accounting software like freee or Money Forward makes blue-return compliance easy).

Why the blue return (aoiro) is worth it

The blue tax return unlocks a special deduction of up to ¥650,000, plus the ability to deduct business expenses and carry losses. For most sole proprietors it's well worth the slightly stricter bookkeeping — and modern accounting apps handle it for you. (See the tax-software guide.)

FAQ

1. Is it hard to become a sole proprietor in Japan? The paperwork is easy (a free one-page kaigyo todoke). The real gate is whether your visa allows self-employment.

2. Which visas let me run a business? Status-based ones — spouse of Japanese, permanent resident, or long-term resident — allow it freely. Otherwise you generally need a Business Manager visa.

3. Can I freelance on a work visa? Not open-endedly. A standard work visa is tied to specific employment; for side work check the rules and any needed permission. Free self-employment needs the right status.

4. What changed with the Business Manager visa? From October 2025: ¥30 million capital (up from ¥5M), at least one full-time employee, and 3+ years' management experience or a Master's.

5. What's the blue return and why file it? It's a tax-filing method that gives up to a ¥650,000 deduction and other benefits. Apply by March 15; use accounting software to stay compliant.

Sources

• National Tax Agency (国税庁) — notification of business opening (kaigyo todoke) & blue return: https://www.nta.go.jp/
• Immigration Services Agency (出入国在留管理庁) — statuses of residence / Business Manager (authority): https://www.moj.go.jp/isa/
• E-Housing — starting a business in Japan 2026: Business Manager visa & immigration: https://e-housing.jp/post/starting-a-business-in-japan-2026-business-manager-visa-and-immigration

Related guides

• How to become a freelance engineer in Japan — freelancing, visas, and earnings
• Tax return software in Japan (file for ¥0) — freee / Money Forward for the blue return
• Japan spouse visa guide — a status that lets you work or run a business freely
• iDeCo for foreign residents — retirement saving for the self-employed (higher limit)

Last updated: 2026-06-19