Japan to Introduce a New Residency Status for Foreign Workers from FY2027
In response to Japan’s worsening labor shortage, the government has announced plans to introduce a new residency status for foreign nationals, the Employment for Skill Development Program (ESDP, Ikusei Shuro), starting in April 2027. The new system will replace the current Technical Intern Training Program.
Under this framework, the acceptance cap for ESDP will be set at 430,000 people over two fiscal years (FY2027–FY2028). Combined with the more advanced Specified Skilled Worker status, Japan will be able to accept up to approximately 1.23 million foreign workers to address labor shortages.
The proposal was presented at an expert panel meeting held on December 23, and the government aims to finalize the policy through a Cabinet decision by January 2026.
A Shift Toward a System Built on Labor Shortages
Under the new system, acceptance quotas will be calculated by industry, based on labor shortages after subtracting the number of workers that can be secured through productivity improvements and domestic recruitment.
ESDP is positioned not merely as a labor supply measure, but as a system focused on human resource development and long-term employment. After working for three years in principle, foreign workers who meet certain skill requirements will be eligible to transition to the Specified Skilled Worker status, opening a pathway to continued employment in Japan.
The program will cover 17 sectors, including food service, caregiving, and the accommodation industry.
Job Changes Allowed, with an Emphasis on Regional Stability
One of the most significant changes under ESDP is that job changes will be permitted, unlike under the former Technical Intern Training Program. This is intended to improve workers’ autonomy, motivation, and sense of security.
To maintain the program’s training objectives, however, job-change restrictions of one to two years will be applied depending on the sector and the skill level required.
Measures will also be introduced to prevent excessive concentration of workers in large metropolitan areas. For ESDP workers currently employed in major cities such as Tokyo and Osaka, the proportion of job changers will be capped at one-sixth, in order to protect regional labor markets and support local economies.
Expansion of the Specified Skilled Worker Program to 19 Sectors
The Specified Skilled Worker program will also be revised. Three new sectors—logistics warehousing, resource recycling (waste management), and linen supply—will be added, expanding the program to 19 sectors in total.
Taking expected productivity gains through digital transformation into account, the government plans to revise the acceptance cap to approximately 800,000 workers by FY2028.
According to the Immigration Services Agency, as of the end of June 2025, approximately 336,000 foreign nationals were residing in Japan under the Specified Skilled Worker status. Going forward, the government intends to manage the combined intake of ESDP and Specified Skilled Worker participants in a planned and controlled manner.
A Realistic Choice in an Era of Population Decline
Private-sector estimates suggest that Japan will face a labor shortage of approximately 3.84 million workers by 2035, further accelerating dependence on foreign labor. In many regional areas, foreign workers are already becoming indispensable contributors to local economies.
At the same time, the government plans to strengthen oversight of residency management, focusing on issues such as unauthorized employment and unpaid taxes. Even after the transition to ESDP, authorities have emphasized that they will seek to prevent a sudden increase in the number of foreign workers.
As Japan’s population continues to decline, accepting foreign talent is no longer optional—it is unavoidable. Centered on the principles of development and coexistence, ESDP may mark a major turning point in Japan’s labor market.
The 19 Targeted Sectors
Manufacturing of industrial products, construction, food manufacturing, caregiving, agriculture, food service, building cleaning, shipbuilding and marine engineering, automobile transportation, accommodation, automobile maintenance, logistics warehousing, fisheries, linen supply, timber industry, aviation, resource recycling, railways, and forestry.
Hajime’s Note
While the term “labor shortage” is often used, the deeper issue lies in why Japanese workers do not remain in these industries. Problems related to working conditions and corporate attitudes cannot be ignored.
At the same time, large companies are shedding white-collar workers through major restructuring, yet labor shortages persist. Unless these industries evolve into more attractive workplaces, foreign workers may also struggle to settle and stay in the long term.
I hope this new system becomes an opportunity to foster deeper discussions about what a better future for work in Japan should look like.
Next Read
Inside Japan’s New ESDP: What the Government’s Basic Policy Reveals
By Hajime Saito
X: @hajimesaitoYJC
Source: Nikkei (Dec 23, 2025)
