Later this year the Japanese Government will launch a new system to attract angel investors from abroad. The system will allow residency for up to five years in national strategic special zones and aims to compensate for the shortage of growth capital in Japan. Based on their performance in the special zones, a decision will be made on whether to establish the new system as an official residence status.
Requirements for this system are expected to include investment plans, overseas investment performance and the amount of assets held, with the specific amount of investment to be determined in the future. In order to prevent fraud, a system will also be introduced whereby investors will be accredited and managed by the municipality establishing the special zone. An obligation to provide advice and nurture for local start-ups will also be included to the requirements.
In October 2023, Tokyo's Shibuya Ward submitted a proposal to establish a new residency status for angel investors, targeting investors with investment plans of tens to a hundred million yen. The Government expanded plans to implement this system in the 13 National Strategic Special Zones across Japan.
The amount of venture capital (VC) investment in Japan is on the rise, but the scale remains small compared to the US. In Japan, many loss-making start-ups struggle to raise funds, and there is a need for support from private asset owners and VCs, as in the US. The Kishida Government has made national asset management a key policy, aiming to create an economic cycle in which household savings are channeled into equity investments in companies.
