１．Compatibility with state of residence

(1) Management (director, auditor, etc.) or administrative (general manager, branch manager, etc.) activities of a business fall under this category. It is not enough to be registered as director, etc.; you must be substantially engaged in the relevant activities.
For example, if a foreigner establishes a company as a 100% shareholder and representative director, and runs a real estate leasing business, but does not hire any employees, but outsources the entire real estate management and accounting, there is a high possibility that his status of residence will be denied on the grounds that he does not need to act as representative director in Japan.
In the case where more than one foreigner is engaged in the management or operation of a business, in order for the activities of each foreigner to be considered as falling under the "management or operation" status, it must be recognized that there is a reasonable reason for more than one foreigner to be engaged in the management or administration of the business, taking into consideration the size, volume of business, sales, etc. of the business. In this case, the foreigner must be considered to have reasonable grounds to operate or manage the business.
(2) Since the continuity of the business is required, the compatibility with the status of residence will be denied and the application will be rejected if it is likely the business will not continue to operate stably the said activity will be discontinued in the middle of the period of stay to be determined (at least one year).
Unlike the case of engaging in management, the case of engaging in operation does not require "3 years or more of experience in business management or operation (including the period of time spent majoring in a subject related to business management or operation at a graduate school)" as a requirement other than the compatibility with resident status, but If a foreigner without considerable experience or education is engaged in management, there is a high possibility that the continuity of the business will be denied. In the case of a new business, the continuity of the business will be proven mainly by the business plan and the relevant certification documents (e.g., the planned transaction agreement)
In contrast, if the company has a track record of financial results, the continuity of the business will be judged based on the actual financial results. If the company has been insolvent for more than two years, there is a high possibility of disallowance.
(3) If the activity overlaps with those of "Technical/Humanistic/International Services, "Business Management" will be assigned. In addition, since a doctor's license is not required to manage a hospital, even if a doctor becomes a manager, the status of residence will be determined as "Business Management" instead of " Medical Services”.
On the other hand, running a law firm or an accounting firm cannot be done unless you are qualified as a lawyer or certified public accountant, etc., so it will fall under “Legal/Accounting Services”.

2. Landing permission criteria

(1) Existence or securing of business premises
Business premises are not allowed to be shared with others and must be separated from other compartments by walls or other means. Therefore, in the case of a home & office, it is necessary to have a room dedicated for business purposes. In addition, the use of leased space, etc. for a short period of time on a monthly basis is not permitted, except in cases where the space is supported and provided by an incubator operated by JETRO, etc.
If you have already started your business, the business premises must "exist" and you must submit the lease agreement and photos of the business premises as proof.
On the other hand, if the business has not yet started, "securing" is sufficient. As proof of "securing", it is not necessary to submit a lease contract, but it is sufficient to submit details of the premises being considered for lease, such as the application form for a lease contract, and materials clarifying that the negotiation with a real estate company is underway.
In this regard, when a foreigner residing in Japan applies for a change of status to "Management/administration," "activities to operate a business with income" are prohibited until the "Management/administration" status of residence is obtained. Therefore, this case will inevitably fall under "cases where business has not yet started" and "securing" a business location will suffice(Except for those who engage in activities other than those permitted under the status of residence previously granted for up to 28 hours per week). However, unless you are running a sole proprietorship, it is necessary to have a company established at the time of the application, so you will need to establish a company with your home etc. as the head office and then make the application.
In contrast, the "prohibition of activities to operate a business with income" rule does not apply to foreigners who are not staying in Japan, so it is possible to establish a company and start a business even before obtaining "Business Management". Therefore, if the foreigner has started a business at the time of application for the Certificate of Eligibility for "Business Management", the "existence" of the business premises is required. However, unlike resident foreigners, it is not easy for non-resident foreigners to establish a company in Japan, so they are allowed to apply for a certificate of eligibility for "Business Management" (however, the period of stay is generally four months) before establishing a company. In this case, "securing" a place of business will suffice.
The "prohibition of income-generating business activities" rule also applies to foreigners staying in Japan on "Temporary Visitor" status. However, if the operator/manager of a Japanese corporation comes to Japan for a short period of time on business and without getting paid remuneration by the corporation, it is considered "Temporary Visitor" not "Business/Management".
(2) Business scale requirement
one of the following requirements must be met.
a. At least two full-time employees who are Japanese or have a status of residence that does not restrict them from working (e.g. "Permanent Resident" or "Long Term Resident") must be employed.
b. The amount of capital must be at least 5 million yen.
The capital must be used for the business or actually exist as funds for the company. Therefore, we recommend that documents proving that the total receipts of business expenditures + the balance of deposits = 5,000,000 yen or more should be submitted, and the capital should be not just 5million yen but more than that to prove this easily.
In addition the source of your capital needs to be proved. International students are prohibited from working, so if you are applying for a change of status to "Business Administration", you will usually need to have your parents invest capital in your company, and you will need to submit documentation to prove their income. Students are prohibited from working, so if you apply for a change of status to "Business Management", the parent should invest the capital in your company, and documentation to prove their income should be submitted.
c. The scale is recognized to be equivalent to a or b.
This includes cases where a sole proprietor invests 5 million yen or more in order to operate the business. Unlike the case of company capital, the investment in this case must have already been spent or is certain to be spent on securing business premises, staff salaries, etc. Therefore, it is recommended to establish a company rather than a sole proprietorship, even if you are running a business by yourself.

3. Difference between Kabushiki company and Goudou company

When a company is established, it is usually Kabushiki company(Stock company) or Goudou company(Limited liability company). Both companies have in common that the investors are not liable for the debts of the company. But Kabushiki company is for large companies, while Goudou company is for small companies, and the main specific differences are as follows.
(1) When establishing a company, the articles of incorporation of Kabushiki company are required to be authenticated, which costs about 51,000 yen as a notary fee, while those of Goudou company are not required to be authenticated , so there is no such fee. In addition, the registration and license tax required for registration is 150,000 yen for Kabushiki company, but 60,000 yen is sufficient for Goudou company.
(2) The maximum term of office for directors is 10 years for Kabushiki company, and it is necessary and costly to register his or her succession even if the same director continues in office. In contrast, in the case of Godou company, the term of office of directors is unlimited.
(3) Kabushiki company is obliged to make public notice of its financial statements every year, but Goudou company is not obliged to do so.
(4) Voting rights and dividends are granted in proportion to the percentage of capital contribution in Kabushiki company, but in Goudou company, investors have equal rights to vote and receive dividends regardless of the percentage of capital contribution unless the articles of incorporation stipulate differently.

4. Company Establishment by non-resident foreigners

In order to establish a company, you need to have a seal registration certificate issued by the Japanese local government and deposit capital in your own account of a bank in Japan.
However, unlike resident foreigners, non-resident foreigners cannot obtain a certificate of seal registration from the local Japanese government, nor can they hold an account at a Japanese bank.
Therefore, nonresident foreigners are required to take the following steps.
(1) You will obtain a signature certificate or other document issued by the government or notary public of your country as a substitute for a seal certificate.
(2)You will deposit the capital in the bank book of a resident of your acquaintance in Japan. However, it is risky to deposit more than 5 million yen, even temporarily, in someone else's bank account. Therefore, we recommend that you first establish a company with a small amount of capital equal to the cost of establishing the company(about 180,000yen for Goudou Company and 340,000yen for Kabushiki company respectively), and then, after opening a bank account for the company, increase the capital to 5 million yen or more by depositing additional capital into the account.
However, you need to note that these days, even if a company is established, it is often not possible to create a bank account for the company.
If you have an account with an overseas branch of a Japanese bank, you may deposit capital into that account.

Fees for “Business Manager” and company establishment

Services	Basic fee (excluding tax)	Remarks (legal expenses, etc.)
Change of status & Certificate of eligiblity	230,000yen	100,000yen for advance payment. 4,000yen for the legal cost only for change of status
Establishment of Kabushiki company	120,000yen	About 200,000yen for legal cost.
Establishment of Goudou company	100,000yen	60,000yen for the legal cost
Notification by Foreign exchange law	20,000yen	In case of non-resident investor
Extension of period	40,000yen	4,000yen for the legal cost(*)

* If explanatory notes or additional documents need to be prepared, 20,000 yen is required as success fee.

*Information publicized by the Ministry of Justice In case where multiple foreigners are engaged in operation of a business

• https://www.moj.go.jp/isa/publications/materials/nyuukokukanri07_00052.html[JP]

The translation of the above URL summary is as follows.
In the case where more than one foreigner is engaged in the management or operation of a business, in order for the activities of each foreigner to be considered as falling under the "management or operation" status, it must be recognized that there is a reasonable reason for more than one foreigner to be engaged in the management or administration of the business, taking into consideration the size, volume of business, sales, etc. of the business. In this case, the foreigner must be considered to have reasonable grounds to operate or manage the business.
In practice, it will be determined whether or not the activities conducted by the foreigner constitute the management or operation of business, taking into consideration the specific nature of the work to be engaged in, the amount of remuneration to be paid as an officer, etc.
To further clarify the above concept, it is possible to determine that each foreigner falls under the "Business Management" status if the following conditions are met: (1) there are reasonable grounds for each foreigner to manage or operate the business, taking into consideration the size of the business and the volume of work, etc.; (2) the nature of the work to be performed by each foreigner in the management or operation of the business is clearly defined; and (3) each foreigner is paid a reasonable amount of remuneration for the management or operation of the business.
The following are some specific examples.
(1) Foreigners A and B invested 5 million yen respectively to establish Company X with the capital of 10 million yen, which operates an import and sundry goods business in Japan. A is an expert in overseas transactions, including customs clearance procedures and import and export operations, while B is an expert in quality and inventory control of imported goods and accounting.
(2) Foreigners C and D invested 6 million yen and 8 million yen respectively, and jointly established Y Corp. with the capital of 14 million yen to operate a transportation service business in Japan. After setting the areas of responsibility for providing transportation services, C and D are in charge of their respective areas, and each of them operates the business in their own area of responsibility. The management policy of Company Y as a whole is to be decided by C and D by consensus, and the remuneration of C and D is to be paid from the business profits in proportion to the amount of their respective investments.