When a company (KK) is incorporated in Japan, commercial registration (at Japanese legal affairs bureau) is legally required. And at least one director should have an address in Japan. This was one of the requirements for the registration. It was recommended that directors live in Japan because it gives certain protections to some beneficiaries. Due to this rule, it was difficult for foreign people, who do not have a residence in Japan, to set up a company in Japan due to this rule. Yes, this rule was changed in 2015.
Now directors do not need an address in Japan. This change is expected to promote investment in Japan.