[REVISION HISTORY]

Japan labor shortage and stricter residency policy shifts

Updated 9 times since CLSTR started tracking revisions of this situation.

What changed

2026-10-03 19:25 UTC → 2026-10-15 03:03 UTC · added ~~removed~~

Japan is navigating a tension between an intensifying domestic labor shortage and the implementation of stricter foreign residency and labor policies. An aging and shrinking population has led to a high reliance on foreign nationals, with 68.2% of companies hiring them to address staffing gaps. In response to demographic pressures, the government is shifting toward a model of “orderly coexistence” and strengthened management. Recent measures include quantitative limits on certain residency statuses, more rigorous oversight of permanent residency regarding tax and social insurance compliance, and increased capital requirements for “Business Manager” visas. In the first half of 2026, 953 foreign nationals holding “Business Manager” visas left Japan without completing re-entry procedures, a nearly fourfold increase from the previous year. This exodus follows regulations that raised minimum business capital requirements from 5 million yen to 30 million yen, alongside new mandates for management experience, Japanese language proficiency, and full-time staffing. Data from Teikoku Databank indicates that new companies established by foreigners fell by 52% in the first half of 2026 compared to the previous year. As of October 1, 2026, new regulations for permanent residency have officially taken effect. Supported by Prime Minister Sanae Takaichi, these rules require applicants to provide proof of above-average annual income and demonstrated Japanese language proficiency, typically equivalent to JLPT N3 or CEFR B1. Applicants must also show projected pension benefits comparable to 30 years of employee pension system contributions, though financial assets may be considered. The implementation of a twentyfold increase in application fees—rising from 10,000 yen to 200,000 yen—resulted in long queues at Tokyo immigration offices as residents rushed to file paperwork before the new costs were enacted. ~~Government officials noted that while controls are tightening, fees may be reduced or waived for those with recognized refugee status or those facing financial hardship.~~

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