Uncovering Japan’s Best Cities for Entrepreneurship
As a founder exploring entrepreneurship beyond your home country, Japan may initially seem like a challenging destination. The country’s hierarchical business culture, resistance to disruption, and emphasis on long-term employment can be perceived as significant hurdles, compounded by the language barrier.
However, as Japan faces population decline and a dwindling birth rate, local governments are recognizing the necessity of nurturing startups and attracting foreign talent. In response, cities are vying against each other by providing appealing programs and incentives for the next generation of global innovators, offering exciting opportunities to those willing to take the plunge.
Easing of Visa Requirements
One significant trend that is gaining momentum across the country is the implementation of the startup visa. Similar to a bridging visa, this program offers a 12-month grace period for aspiring entrepreneurs to lay the foundation for their business. During this time, they can prepare for their official “Business Manager” or “Investor Visa,” which they can obtain as they establish and grow their enterprise.
The general requirements to qualify for a Business Manager or Investor Visa include:
- 5 million yen in savings to start a business or invest in an existing business
- Detailed Business Plan (provided in Japanese)
- Document relevant experience and skills
- Office lease (cannot be your home)
- Residency in Japan (document showing where you will live)
The “startup visa” program is designed to streamline the initial requirements for foreign founders, offering a smoother entry into the Japanese market during the first 12 months. This interim program is accessible through major hubs across Japan, making it easier for entrepreneurs to take advantage of the country’s burgeoning startup scene. With that in mind, let’s delve into some of the different locations available to foreign founders who are considering expanding their business in Japan.
Fukuoka
Fukuoka, one of the few Japanese cities experiencing population growth outside of Tokyo, boasts a population of over 1.5 million residents and enjoys a sub-tropical climate with mild winters and humid summers. Located in the Kyushu region, the city has a strong emphasis on key industries such as IT, finance, and logistics.
Moreover, Fukuoka’s strategic location provides easy access to other major cities in the region, including Taipei, Seoul, and Shanghai. The city hosts several established corporations, including Kyushu Electric Power, Yahoo Japan, and Mitsubishi Heavy Industries.
As a pioneer of the startup visa program, Fukuoka was the first city to qualify and attract local talent through the initiative. Fukuoka is committed to supporting startups in sectors such as Knowledge Creation, Healthcare, Welfare, Environment, Energy, Logistics, and Global Trade, making it an ideal destination for foreign founders looking to expand their business in Japan.
To qualify for a startup visa in Fukuoka, they request new applicants provide:
- New Business Implementation Form
- New Business Implementation (Business Outline) Plan
- Copies of your Passport
- Residency documentation
- Bank Account Information
However, we recommend you visit the Startup City Fukuoka website for the most up-to-date requirements and information for startup visas.
Key Support Programs include:
Startup City Fukuoka is a program run by the City of Fukuoka Government. It carries the designation of ‘National Strategic Special Zone’, which is the simplified process it provides for foreign entrepreneurs looking to enter Japan.
Furthermore, the city also provides financial assistance and funding opportunities to qualifying startups, including Startup Funding Loans of up to ¥35M to qualifying founders. Plus, they support startups through business setup and tax subsidies, and financial aid for residential and office leases.
One example of a support program available through the city of Fukuoka is the Global Startup Center. The center acts as a hub for entrepreneurs looking to connect and consult with local staff. It also provides an opportunity to connect with other founders to exchange ideas.
Sapporo
Sapporo is the largest city in the Hokkaido prefecture, with a population just shy of 2 million. It is renowned for its distinctive cuisine and abundance of nature, and is particularly famous for its long winters and heavy snowfall, making it a popular destination for ski and snowboarding enthusiasts. Each year, Sapporo also hosts a well-known snow festival in early February. In the summer months, the weather remains relatively mild with some humidity, and offers a range of popular hiking destinations.
The startup ecosystem in Sapporo focuses on key industries such as AgriTech, HealthTech, FoodTech, BioTech, and AI, among others. With its unique blend of natural beauty and innovative industries, Sapporo presents an attractive destination for foreign founders looking to expand their business in Japan.
To be eligible for a startup visa in Sapporo, they state you need to provide documentation on:
- Your MVP (Minimum Viable Product)
- Business Plan of your Startup
- 3 Year Financial Projections
Later in the process, they will then request further documentation regarding your qualifications, CV, Finances, and so on.
We suggest you visit the Startup City Sapporo website for full details on the latest requirements and their online application form.
Additionally, some benefits of joining the startup program for seed-stage startups include the potential to qualify for:
- Up to 2.5M JPY in grant funding
- 100% of your company registration fee covered
- PoC (Proof of Concept) + ¥500,000
Key support programs include:
Startup City Sapporo is an initiative led by the City of Sapporo Government. They label themselves as a group that ‘believes in the pioneering spirit of startup founders. They provide guidance and support on obtaining a startup visa, seed finance, government programs, and more. They also run local events to educate and connect innovators in the ecosystem.
One example of a local program they run is J-Startup Hokkaido, which is an initiative administered by a number of local Sapporo government ministries. They select and onboard promising local startups by introducing them to public sector institutions and private sector companies to scale their business growth.
Osaka
Osaka, Japan’s second-largest city, boasts a massive population of almost 20 million people and is a major trade center. Home to companies such as Panasonic, Suntory, and Sharp, it is a popular destination for tourists and food enthusiasts alike, earning the nickname “the nation’s kitchen.”
One of the biggest advantages of relocating to Osaka is the accessibility it provides to other major cities in the Kansai region, including the culturally rich Kyoto and the seaport of Kobe, both of which are major commercial hubs. Additionally, Osaka is home to several of Japan’s top universities, such as Kyoto and Osaka University.
Recognizing the potential of startups, Osaka is seeking to develop itself as a leading startup hub in preparation for hosting the World Expo in 2025. With a focus on industries such as AI, biotech, and foodtech, the city is investing in the growth of its startup ecosystem, offering a range of support programs and initiatives to help startups thrive.
To be eligible for the startup visa in Osaka, they require a detailed business plan, similar to other cities. They also provide services to help you prepare the right kind of documents that help you prepare for your visa application. In addition, to business plan support, they can also provide business and tax consultation services if required.
One prerequisite of the program is that you attend monthly consultations to provide updates on your business activities, as you work towards your next visa.
Key Support Programs include:
Osaka Innovation Hub (OIH), and Osaka Startup Portal Site, are the Osaka government’s backed startup program and community. Similar to other support programs, they provide all kinds of consultative services, events, and information for prospective foreign entrepreneurs.
In addition, through the center, you can access programs like the OIH Seed Acceleration program, which has raised over US$42M to date. They also run global events like Hack Osaka (hackathon) and Get In The Ring pitching events.
Osaka Landing Pad is a local program supported by the Hankyu Hanshin Group, which also operates a co-working space and various other commercial properties. They provide the opportunity for international startups to receive specialist market entry advice and support.
Shibuya, Tokyo
In recent years, Tokyo has also recognized the potential benefits of attracting foreign entrepreneurs to the city. In November 2022, the city announced a range of initiatives and partnerships with the private sector to boost growth and innovation in the startup ecosystem.
In fact, Tokyo has been named the world’s best city for business by the Global Business Alliance. (Source: Reuters, “Tokyo Named World’s Best City for Business: Global Business Alliance”, Nov 10, 2022)
One of the key areas for startups in Tokyo is Shibuya. The Shibuya Startup Program is a leading initiative that supports and promotes the growth of startups in the area. Shibuya is a vibrant district that is home to many innovative companies, from early-stage startups to established corporations. Home to global corporations like Google and domestic players like Cyberagent. It has a dynamic and diverse community of entrepreneurs, investors, and professionals, making it an excellent place for networking and collaboration.
Living in Shibuya also has its benefits. The district is well-connected with easy access to public transportation, including multiple train lines and bus routes. It is also home to a variety of shops, restaurants, and entertainment options, making it an exciting and convenient place to live. Shibuya is known for its youth culture and fashion scene, which attracts many young people from around the world.
Shibuya’s core support Initiatives for founders include:
Shibuya Startup Support, backed by Shibuya City, labels itself as ‘a concierge for all budding entrepreneurs’. They provide similar services like pathways for foreign founders via the ‘startup visa’ initiative. Moreover, they provide support for finding a home and office lease, opening a bank account, and more.
The program is open to working with startups in sectors like:
- Health, medical, and welfare-related industries
- Environmental and energy-related industries
- Food, agriculture, forestry, and fisheries-related industries
- Information-related industries
- Culture and arts-related industries
- Fashion related industries
Please visit their website for the latest info and criteria about the Shibuya City ‘startup visa‘ program.
Through their partnerships with various co-working spaces, including 5 with bilingual community managers. They can also help you locate office space in one of the many offices located across the city.
For the latest info and events run via the program, we recommend you follow them on LinkedIn too.
Further Support
Venture Café – is a vibrant co-working space and event venue located in the heart of Tokyo. Situated in the newly constructed Toranomon Hills building, it offers a prime location for startups looking to network and collaborate with other local entrepreneurs.
The space also hosts weekly events called ‘Thursday Gatherings’, featuring pitch nights, workshops, and seminars, as well as ample opportunities to connect with other members over drinks at the bar.
Founder Institute Japan – (FI) is a prominent pre-seed accelerator program with a strong presence in the Japanese startup community. Its local chapter runs a range of events, both online and in-person, to help founders connect with the local ecosystem. To learn more about their programs and offerings, visit their website or check them out on LinkedIn.
JETRO – or the Japan External Trade Organisation, is an active player in the Japanese startup ecosystem. With access to over 15 different accelerator programs and a diverse group of mentors through their alumni network, JETRO offers valuable support to startups looking to grow and scale. Keep up with the latest news and information on JETRO’s programs by following them on LinkedIn.
If you’re looking for further support with your visa application, business plan, validating your startup and/or entry strategy into Japan, I would love to have a chat – feel free to connect with me (Matt) on LinkedIn to check out my content or DM for more info.