---
title: "Signs of BM Reclassification, Risk-Mitigation Practices, and Contract Requirements"
url: https://memocore.ai/memos/6a5f639063d783ad6870945c
project: "Doing Business in Japan"
tags: "japan-business, visa-work, visa-business-manager, bank-account, visa-student"
updated_at: "2026-07-21T12:18:24.276Z"
---

# Signs of BM Reclassification, Risk-Mitigation Practices, and Contract Requirements

Several factors push a visa toward BM classification rather than Engineer/Specialist in Humanities: the size of one's ownership stake, the number of subordinates (the more, the more likely BM applies), work that does not fit within Engineer/Humanities categories (general business management rather than techno-management), and board membership. There are known cases of people obtaining BM status even with zero ownership stake.

Practices used to reduce reclassification risk include making a co-founder's shares non-voting, not establishing a board of directors, spelling out engineering/technical duties explicitly in the employment contract (supervising development plus hands-on engineering work) and attaching that contract to the visa application, and showing, in photos of on-the-job activity, a realistic division of responsibilities. Lawyers reportedly advise that a 株主 (kabunushi, major shareholder) holding a C-level position be formally described as holding a partly managerial role, to avoid triggering the need for a full BM visa.

A director can be nominal — a Japanese national or PR holder, for example — as long as the underlying business is real rather than fictitious "for visa purposes," which is legal; a purely fictitious business set up only to obtain a visa is illegal (there have been cases of Chinese nationals being deported over fictitious companies — the nominal directors in those cases were not prosecuted, only the fictitious "owners" were deported).

A "sole proprietor on a work visa" route via a contracting arrangement (業務委託, contracted work, instead of an employment contract) is a rare but legal path: it requires a long-term contract with a Japanese company (ideally 1+ year or indefinite) specifying full-time hours (around 160 hours/month). Several part-time contracts are theoretically possible but require substantially more paperwork. The catch: most companies are unwilling to wait out visa processing under a contracting arrangement, since standard contracts run only 3-6 months, and a Japanese bank account is needed for payment transfers. A visa obtained this way is typically issued for 1 year.

The minimum employment contract term for obtaining a work visa is 1 year; a shorter contract will not support a visa grant.

A status change within Japan (for example, from student to work status for someone already in the country) does not require a Certificate of Eligibility (COE); the requirement is a relevant university degree or 10 years of professional experience.

See: Directorship Risk on a Work Visa: Overview; HSP Status: Points, Tracks, and the PR Path.