Three years ago, Tokyo resident Qi Hongqiang launched Skypechina, an online Chinese-language school, using ¥5 million borrowed from his parents back home in Hebei province, China.
The 27-year-old graduate of a Japanese university needed the cash to fulfill one main requirement for obtaining an investor/business manager visa.
“I am lucky as my parents offered me ¥5 million,” Qi said at his office in Tokyo, a space measuring 10 sq. meters and full of computers and printers. “Renting office space still requires a large amount of money.”
For Dang Thai Cam Ly, 29, a student from Vietnam, the financial requirement was a hurdle because it is difficult to transfer money from Vietnam to Japan. Eventually, though, she was able to complete the paperwork and is now hoping to open a Vietnamese restaurant. “I think the Japanese market has potential and offers many chances,” she said.
Analysts agree, the cash requirement is a major obstacle.
“It takes time for some foreign students who have just graduated from university to raise funds,” said Masashi Miyagawa, a manager at Tokyo-based Acroseed Co., which provides consulting on foreign labor matters.
Another challenge is finding an office as few landlords are interested in renting space to foreign startups without a track record, Miyagawa said.
Despite these challenges, an increasing number of foreign students — especially from Asia — are no longer going down the traditional job-hunting route or returning home after graduation. Instead, they are looking to forge their own path.
The number of foreign students to successfully switch their visa status to investor/business manager reached 321 as of 2013, up more than five times from 61 in 2007, Justice Ministry figures show.
As to the reasons, Hirokazu Hasegawa, a professor at Waseda Business School in Tokyo, points to Japan’s business environment, which he says is more attractive for startups than some Asian countries.
Chinese student Wang Lu, 31, who attends the professor’s seminars, agrees.
“Japan has advanced e-commerce technology that I want to learn and the procedure for startup applications is less complicated than in my country,” he said.
His story is a case in point. Wang earlier worked as an engineer for Fujitsu Ltd. but enrolled in business school to receive an MBA. In August he co-founded MIJ Corp., an online commerce company that provides a platform linking Chinese who procure products in Japan for the burgeoning ranks of the wealthy back home.
He wanted to start something new rather than pursue a career at an established corporation and settle into a job for life. But he might not have set up a company had he not learned what he did at graduate school.
“Originally, my classmates had a business idea that I found interesting, then we bounced ideas around and got feedback from our professors and other people, finally creating the startup together upon graduation,” he said.
“Both faculty and classmates helped to shape our business idea and provide feedback on strategy, funding and management.”
Some foreign entrepreneurs also receive support from Japanese incubators.
Lee Hyeok, a South Korean graduate student, has run Deview Communications Inc., a Tokyo-based education-related company, for the past four months or so.
Her company rents an office from Tokyo-based Samurai Startup Island in a low-rent office district built on landfill in Tokyo Bay.
The offices there have dozens of young entrepreneurs at long wooden tables exchanging ideas and tapping on computers. Speaking there, Lee said the incubator takes on the vibe of a communal space, which sometimes enables the startups to learn from each other.
Lee also receives advice — such as how to improve her business model — from another incubator, Viling Venture Partners Inc.
“When my company is on track for success, I hope to repay the people who have helped me both in Japan and South Korea,” Lee said.
The government is encouraging foreigners to start their own businesses by easing visa requirements in special zones as part of Prime Minister Shinzo Abe’s growth strategy aimed at revitalizing the economy.
The administration submitted a bill to the Diet in late October to revise the special zones law. The measure was scrapped when the Lower House was dissolved in November, but the administration plans to craft a new bill.
Qi, of Skypechina, said it would help if some requirements are eased, because foreign student entrepreneurs are really serious about doing business.
“When I studied in Japan, I recognized that it is important to foster communication between the people of China and Japan, so I started my company when I was still a graduate student,” he said.
Miyagawa, the consultant, said businesses launched by foreign students would help Japan attract more foreign customers.
Moreover, foreign students sometimes see something attractive in Japanese culture that local people themselves are unaware of, he said. This plays into their sense of opportunity.