Category : Career | Sub Category : Latest career Posted on 2023-12-05 08:05:58
Career Opportunities in Japan
Japan is a major
consumer center with a market-driven economy ideal for ventures and
opportunities. Global economists predict that Japan will have a GDP of US$5.6
trillion, making it the third-largest economy in the world in 2024. It
currently accounts for about 10% of the global economy and has the largest
stock exchange in Asia.
Furthermore, the
Japanese government has introduced several investor-friendly policies to
attract more foreign investments. With a customer base ready to pay a premium
for quality products Japan is easily a winning location for all businesses.
Moreover, with a highly educated workforce, Japan is a major player in the
global tech industry.
The following
article will give meticulous details regarding the company registration process
in Japan and how to start a business in Japan.
Benefits of
Starting a Career in Japan
Japan has the
largest stock exchange in Asia and accounts for about 10% of the global
economy. As one of Asia’s biggest markets, Japan attracts foreign entrepreneurs
worldwide.
There are many
advantages of doing business in Japan, such as
A highly
educated workforce that ensures efficient business dealings
Supportive
government policies to help companies scale up efficiently in keeping with
modern requirements
Developed
infrastructure and state of the art facilities along with global outreach
Accessible
company registration along with a stable economy
Major strength
in industry and tech that ensures healthy competition
Requirements for
Starting a Career in Japan:
Foreign Exchange
and Foreign Trade Act (FEFTA) is the law that governs all foreign investments
in Japan. The Ministry of Economy, Trade, and Industry (METI), Ministry of
Finance (MOF), and other relevant Japanese ministries govern all employment and
investments. The Bank of Japan reviews foreign investment transactions covered
by the FEFTA. Investors must submit all notifications and reports to the
government through the Bank of Japan.
Some of the
major eligibility requirements to start a Career in Japan are;
Visa/Work Pass:
Entrepreneurs
need to get the correct visa or work pass to start a career in Japan legally. Entrepreneurs can opt for a Business Manager
Visa, which requires you to prove that you are willing to set up a business in
Japan.
Japan also has a
remarkable initiative known as the Start-Up Visa. It is valid for six months
but can be extended for another six months if required, Entrepreneurs can opt
for the Investor Visa, which has a validity period of 1, 3, or 5 years
Company Name:
The next
crucial step of setting up a company in Japan is the business name registration
in Japan. A corporate name cannot be misinterpreted by other enterprises, but
this restriction is only relevant when other establishments are situated at the
same address. Employers must follow a few guidelines when naming their
businesses to get swift approval for the naming application:
A joint-stock
corporation should have ‘Kabushiki-Kaisha’ in its corporate name.
A Limited
Liability Company (LLC) should have ‘Godo-Kaisha’ in its corporate name.
Director:
While setting
up a company in Japan, every company must appoint a representative director.
Enterprises can have multiple directors if required. Recent laws have exempted
companies from appointing at least one director of local origins. Non-residents
can now become sole representative directors of a company in Japan. However,
entrepreneurs are advised to assign at least one regional director to avoid
initial complexities for the following reasons:
Initial company
incorporation in Japan demands proof of capital to be shown in a personal
Japanese bank account of a director or shareholders. This might create a hurdle
for companies with only non-resident representative directors.
Japanese banking
institutions may be reluctant to trade with companies with foreign-only
representative directors in the absence of any authoritative local figure who
can be held responsible in case of company negligence. While setting up a
business, a company needs to appoint a minimum of three directors on the board.
Shareholder:
All enterprises
in Japan must have at least one shareholder. A company can have as many
shareholders as they want, whether it is a private or a public company.
However, public companies listed on the Japanese Stock Exchange need to meet
the appropriate provisions of the stock exchange on the number of shareholders.
Company Auditor:
Companies
opting to appoint a board of directors must designate at least one company
auditor to oversee the duties of the board. Large establishments with shares
that have no restrictions on the share market are mandated to appoint three
board of company auditors. However, companies with an audit and a supervisory
or a nominating committee are exempt from this rule. Medium-sized companies can opt for an
accounting adviser instead of a company auditor. A public company must have at
least one company auditor, while large-sized companies must have a board of
company auditors.
Company
Secretary:
Japanese
legislature does not require companies to appoint a company secretary to set up
business in Japan. There is no legal position corresponding to a company secretary
in Japanese corporate culture. The General Affairs department of a company
handles the responsibilities of a company secretary. However, most companies
appoint one company secretary to avoid day-to-day operational hassles.
Beneficial:
A beneficial owner
is a person directly or indirectly holding more than 25% of the total voting
rights in a company. It is not a mandatory requirement for opening a business
in Japan. However, a new policy by the Ministry of Justice of Japan urges all
listed and private companies to disclose the identities of their beneficial
owners after January 2022.
Registered
Address:
Japanese law
mandates all businesses to have a legal registered address. This address is
significant for several reasons, including – The legally registered address of
all Kabushiki-Kaisha (KK), Godo-Kaisha (GK), and Japanese branches of foreign
companies are present on the publicly accessible certificate of registered
particulars.
All official
correspondence, such as taxes, social security, labor insurance, and legal
proceedings (if any), will be sent to this legally registered company address.
General
licenses:
Upon completing
the company registration process in Japan with relevant authorities such as the
tax and social security department and the Trade Register, the Companies
Registrar in Japan issues a business license. It is the first permit issued to
any business in Japan and often the only one to start operating in Japan.
However, industries in specific sectors, such as health, construction, and
hospitality, may require additional licenses from relevant Japanese
authorities.
Paid-up capital:
Paid-up capital
refers to the total amount of funds of a shareholder. Setting up a new private
limited company in Japan requires a minimum paid-up capital of 1 JPY. Although
establishment with a capital of 1 yen is possible under the Companies Act of
Japan, you need to invest 5 million yen or more if you are entitled to a
“Career Manager” visa status.
Taxation:
Japan has
varying tax burden rates depending on the size and taxable income of the
businesses. There are many different taxes, such as the corporate tax, local
corporate tax, corporate inhabitant taxes (Prefectural & Municipal),
enterprise tax, and special corporate enterprise tax. The total tax rates
imposed by the Japanese government on different businesses are: Foreign
companies operating in Japan are liable for corporate income taxes only for the
income generated from within Japan.
Types of Career
Structures in Japan:
The main career
structures commonly used by foreign enterprises to set up a business in Japan
are:
Subsidiary
company
A foreign
company founding a subsidiary company in Japan can opt for a Limited Liability
Company (LLC) known as Godo-Kaisha or a joint-stock corporation known as
Kabushiki-Kaisha, or any similar entity stipulated by the Corporate Law of
Japan
Branch office
A branch office
of any foreign company set up in Japan, providing services in the country. It
does not possess any legal corporate status, and the services provided are
determined by an organization permitted by the foreign company.
Limited
liability partnership (LLP)
Entrepreneurs
can form a Limited Liability Partnership (LLP), an entity started only by the
equity participants having limited liability. LLPs are not liable for taxation
but on the profits allocated to equity participants. Equity participants can
freely determine the internal rules and regulations of LLPs.
Representative
office
Foreign
companies establish representative offices to carry out preparatory and
supplemental tasks to engage in full-scale business operations in Japan.
Company
Registration Process
A detailed
breakdown of the procedure for incorporation of company in Japan has been
provided below:
Pre-registration
process:
After entrepreneurs
have completed the preparatory stage and met all the requirements, they need to
register their business authority with the Legal Affairs Bureau. Foreigners
need to follow the stepwise process to begin the company registration process
in Japan:
Searching and
reserving company name
Preparing the
Articles of Incorporation (teikan)
Deposit of
capital
Notification of
the company’s seal (inkan)
Preparing a
letter of agreement from the directors assuming their office
Registration
process:
Entrepreneurs
need to submit specific documents and register their company name with the
Legal Affairs Bureau. The following documents are required for the company
incorporation in Japan: Seal certificate (inkan shomeisho), which has been
issued within three months of all investors and director(s) The Representative Director’s personal bank
accounts and their passbook (tsucho), and bank statement for the deposit of
capital
Declaration of
compliance
Company seal
Registry
certificate of the parent company issued within three months, Notarized
Signature attestation of the parent company’s representative
Post-registration
process:
The
post-registration process is the final step involving satisfying the specific
obligations and requirements by the entrepreneurs after successful company
registration in Japan. The main criteria to satisfy in this stage are:
Opening a
corporate account with a local bank
Getting the
required business operating licenses
Signing business
or employment contracts in the company’s name
Appointing
auditors for the company
Finding out the
required tax obligations
Registering for
employee provident fund
How Much Does it
Cost to Incorporate a Company in Japan?
Are Foreigners
in Japan on Certain Passes Allowed to Start a Business in Japan?
Entrepreneurs
must obtain the correct visa or work permit to start a business in Japan. For
the last few years, Japan has been trying to introduce new processes to
simplify the process of foreign investment. As a part of that initiative, Japan
allows foreign companies to operate without any local directors and has
introduced new work permits and visas.
A Career Manager
Visa is an employment eligibility status for foreigners to commence new
businesses in Japan, manage already established companies, or act as a representative
director on behalf of parent corporations. This visa is valid for four months
only but can be extended for a year. Entrepreneurs holding a different type of
visa can apply for a change of residence status to a 1-year Business Manager
Visa.
A Start-Up Visa
is valid from 6 months to a year and is granted post-approval of the submitted
business plan in Japanese to the relevant local authorities. It is only
applicable in some cities, which can be found on the website of the Ministry of
Economy, Trade, and Industry (METI). It acts as a temporary residence permit
for entrepreneurs who lack sufficient funds to apply for a Career Manager Visa.
The Investor
Visa has a varying validity period of 1, 3, or 5 years which can be prolonged
depending on the business’s profitability and other performance metrics. To
obtain an Investor Visa, entrepreneurs need to establish their company and
apply for a Certificate of Eligibility (COE). Upon receiving the COE, they can
exchange it for the investor residence status at any Japanese consulate.
Government Assistance
for Foreign-owned Careers
Apart from
several grants for starting a business in Japan, the Japanese government has
set up ‘Invest Japan’ offices in relevant ministries, which help them set up
business in Japan and act as single contact points for foreign entrepreneurs
looking for information. Entrepreneurs can utilize the wide domestic and
foreign network of the Japan External Trade Organization (JETRO). It has more
than 70 overseas offices and 50 offices in Japan.
