TOKYO -- Qi Hongqiang launched an online Chinese language school in Japan three years ago after borrowing 5 million yen from his parents in the Chinese province of Hebei.
The money was necessary for the 27-year-old graduate of a Japanese university to fulfill one of the major requirements for obtaining an investor/business manager visa to start a business in Japan.
"I am lucky as my parents offered me 5 million yen," Qi said at his 20-square-meter office in Tokyo full of computers and printers. "But renting office space still requires a large amount of money."
For Dang Thai Cam Ly, a 29-year-old Vietnamese student, the financial requirement also proved 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.
Masashi Miyagawa, manager at Tokyo-based Acroseed Co., which provides consulting service on foreign labor matters, said, "It takes time for some foreign students who have just graduated from university to raise funds."
Apart from coming up with money, renting an office is another challenge for budding entrepreneurs as few landlords are interested in renting space to foreign start-ups whose business is not yet established, he 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 and are instead looking to strike out on their own.
The number of foreign students who successfully switched their visa status to investor/business manager reached 321 as of 2013, up more than five times from 61 in 2007, according to the Ministry of Justice.
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 start-ups than in some Asian countries.
"As Internet and technology-related business opportunities are still limited in some Asian countries, more foreign students from Asia would like to learn how to create a business plan in Japan."
One of the professor's seminar students from China backs up this view.
"Japan has advanced e-commerce technology that I want to learn and the procedure for start-up applications is less complicated than in my country," said Wang Lu.
Wang, 31, was an engineer in Fujitsu Ltd., but enrolled in the business school to receive an MBA and went on to cofound an online commerce company in August.
He was motivated by the desire to start something new rather than pursue a career at an established corporation and settle for a job for life.
But without the lessons he learned at graduate school, he may not have been inspired to launch his company, MIJ Corp., which provides a platform linking Chinese who procure products in Japan for the burgeoning ranks of the wealthy back home.
"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 cofounding the start-up upon graduation."
"Both faculty and classmates helped to shape our business idea and provide feedback on strategy, funding and management," Wang said.
Some foreign entrepreneurs also receive support from Japanese business incubators.
Lee Hyeok, a South Korean graduate student, has run Deview Communications Inc., an education-related company, in Tokyo for about four months.
Her company rents an office from Tokyo-based Samurai Startup Island in a low-rent office district built on landfill in Tokyo Bay.
Lee said at her office in the "island," where dozens of young entrepreneurs sit at long wooden tables exchanging ideas or tapping on computer keyboards, that the incubator takes on the vibe of a coworking space and sometimes enables the start-ups to learn from each other.
Lee also receives counseling on how to improve her business model, as well as other advice, from another incubator, Viling Venture Partners Inc.
"When my company is on track for success, I would like to repay the people who have helped me both in Japan and South Korea" Lee said.
The Japanese government is currently seeking to encourage 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 Japan's economy amid a decreasing birthrate and aging society.
The government submitted a bill to parliament in late October to revise the special zones law to that end. The measure was scrapped when the House of Representatives was dissolved in November, but the government plans to craft a new bill.
Qi, whose online school is called Skypechina, said if Japan can ease some requirements, it would be helpful 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.
Also, he adds, foreign students sometimes see something attractive in Japanese culture that Japanese people themselves are not aware of and that they can make use of in their business.
For his part, entrepreneur Qi says he is drawn to "the spirit of hospitality" he finds in Japan's service industry.
Professor Hasegawa says foreign student entrepreneurs have many possibilities because they know both Japan and their own countries. "I think the number will still increase in the near future."