Japan – the Land of the Rising Sun – is an archipelago of nearly 7,000 islands located in East Asia between the Pacific Ocean and the Sea of Japan. The island nation has long been a popular with tourists due to its scenic beauty, natural hot springs (called onsen), artistic cuisine, traditional culture and 18 World Heritage Sites, including Himeji-jo Castle and the Historic Monuments of Ancient Kyoto.
While Japan is an easy country to visit, retiring there can be a different story because of the high cost of living and the lack of any formal retirement visa plan. Still, some expats are more than willing to accept a few challenges to retire in such a beautiful, vibrant and culturally rich country. Here, we take a quick look at what it takes for foreigners to retire in Japan.
The Visa Situation
You can visit Japan as a tourist for up to 90 days without a visa if you hail from one of 67 countries – including the U.S. and Canada – with which Japan has a visa waiver agreement. If you visit for longer than 90 days, you’ll need a long-term Japanese visa. There are 24 different types of long-term visas, not including diplomatic visas, with more than half categorized as “Working” visas.
The majority of foreigners living in Japan do so on work visas, which are issued for a limited number of specific professions, including professors, artists, journalists, medical services, engineers, entertainers, investors/business managers and skilled laborers. Working visas are generally issued for one year at a time and can be renewed if you are still working in that particular position. Unless you plan on working while residing in Japan, you won’t be eligible for this type of visa.
Another option, if you are married to a Japanese citizen, is a spouse visa. These are issued in periods of six months or one, three or five years; the visa is extendable. Having one will eventually qualify you to apply for a permanent resident visa. Similar to other countries’ visa systems, you will have to prove that the marriage is legally recognized in your home country and in Japan, and that the marriage is real (and not just a way to obtain a visa).
If you are not eligible for a work or spouse visa – or your eligibility ends because, for example, your job finishes – a final option is to seek a permanent resident visa. The process takes many years: First, you must stay in the country for three years, each time on a one-year visa. Next, you will be able to apply for a long stay visa, which is valid for three years. After this six-year period (some sources say it takes ten years), you can apply to become a Japanese permanent resident. To be awarded permanent resident status, you must show (via testing) that you have the required proficiency in the Japanese language, plus a thorough understanding of the Japanese culture.
You can apply for a Japanese visa at Japanese consulates and embassies worldwide, and, in most cases, within Japan. Note that any long-stay visa application requires a Certificate of Eligibility, a document issued by the Ministry of Justice that shows you meet the various conditions of the Immigration Control Act.
Cost of Living
Japan is known to have one of the highest costs of living in the world. Tokyo, in particular, is an expensive place to live; even tiny apartments within the capital city can be costly. A quick peak at a Tokyo apartment rental website, for example, puts the cheapest apartment as of late May 2015 at just under $1,500 a month for a small (440 square feet), unfurnished studio apartment.
To move into a rental, you typically have to pay the first and last two months’ rent, a fee to the real estate agent who arranged the lease (typically worth one month’s rent), and reikin, or gift money (again, equal to one month’s rent). This is often called “key money” and it’s basically a gift to the landlord – and not an optional one. Reikin is paid before you move in, and every time you renew your contract.
It is possible to live for much less if you are willing to live outside the city centers. Utilities are expensive anywhere you live, and just as at home, you can save money by being mindful of your water, gas and electricity usage. In addition, eating what the locals eat – and where the locals eat – can help you keep your food budget in check. (Also useful: Tipping is not only not customary in Japan; it can be considered rude.)
Japan has no laws or regulations that ban the purchase of Japanese real estate by foreigners. You don’t need any particular type of visa, and you can own property without ever having been in the country. Property titles can be registered to any foreign address, and you can buy and sell virtually any type of real property: land, apartments, homes, buildings, forests, golf courses and even private islands.
That being said, if you’ll need financing from a Japanese financial institution to make the purchase, you’ll be out of luck unless you are a resident with permanent status who can show proof of income (note that owning property does not make you a resident). In most cases, if you plan to buy property, you’ll have to pay cash or secure financing elsewhere. For more, see How To Finance Foreign Real Estate and Do You Get U.S. Tax Deductions On Real Estate Abroad?
The healthcare system in Japan is excellent, and hospitals and clinics generally use the most advanced medical equipment and techniques available. Japan has two public health insurance systems: the Employees’ Health Insurance and the National Health Insurance. Anyone with an address in Japan, including foreigners who have a visa that is effective for at least one year, must join one of the public systems. Monthly premiums differ depending on where you live and your income, and your share of medical costs will be 30%. Private insurance is also available. It covers treatments that public insurance does not cover, including cancer treatment and hospitalization.
Anyone visiting Japan for less than a year is encouraged to buy international private medical insurance or travel health insurance. For more information, see Top 10 Insurance Companies By the Metrics.
The Bottom Line
Japan is a popular tourist destination, but due to visa challenges and the high cost of living, it may not be a good choice for everyone. Permanent resident visas are attainable, but the process is lengthy and requires an intimate knowledge of the Japanese language and culture. Housing is expensive and much smaller than some people would be comfortable with; however, foreigners can buy and own property as long as they don’t require financing from a Japanese bank. The healthcare system is excellent, and expats can buy into Japan's public National Health Insurance system after they’ve been in the country for a year. For suggestions on where to settle, see Best Cities To Retire To In Japan.