Category : Business | Sub Category : Technology Posted on 2024-01-09 10:26:32
BUSINESS IN JAPAN
Business people at work
around the desk.
Setting up a business
in Japan may appear as an overly complicated thing to do, especially if you
haven’t done it before. Fortunately, Japan has done a lot in the past decade to
streamline this process and structurize it. With a bit of help, you can set up
a business in the land of the rising sun without breaking a sweat.
There are myriads of
sources online. Juggling them to extract all the crucial pieces of information
is time-consuming, if not confusing. Missing out just one important step can
render your efforts futile. This is why we are here. Here is the ultimate guide
on setting up a business in Japan.
CONTENTS
Get A Visa To Start
Setting Up a Business in Japan
Opening a Bank Account
Secure an Office or
Shared Space
Get Your Articles of
Incorporation Ready
Trademark Registration
Inkan and Hanko
Get The Articles of
Incorporation Notarized
Deposit the Initial
Capital
Get All the Documents
Ready
File The Application
for Business Registration
Get the Registry
Certificate, Seal Certificate, and Corporate Number.
Get a Visa to Start Setting
Up a Business in Japan:
Foreign nationals are
not allowed to start setting up a business in Japan just like that. To start a
business in Japan, you will have to obtain one of the required visas.
The procedure of
getting a visa is quite simple. For business purposes, you will need to obtain
either a 4-Months Business Manager Visa or Start-up VIsa. Or you can consider
an Investor visa.
Obtaining the 4-Month
Business Manager Visa
Japan introduced the
4-Month Business Manager Visa 4 years ago. To get the visa, you will have to
prove that you are in the process of starting a company in Japan. Once Japan
grants you the visa, you can begin setting up your business the moment you
arrive in Japan. Make sure to submit all necessary documents in advance so that
you can get your 4-Month Manager Visa in time. This visa puts you in a position
to obtain a residence card, open a bank account in Japan, and register your
business. Once you set up your business in Japan, you can apply for an
extension of stay, which is 1 year.
Obtaining the Start-up
Visa
A Start-up visa is a
remarkable initiative of Japan’s government to bring in foreign entrepreneurs
in Japan. This visa is valid for half a year. Note that it is not available in
all the cities. Currently, it is available in Tokyo, Hiroshima and Aichi
Prefectures, Sendai City, Fukuoka City, Imabari City, and Niigata City.
The list of required
documents for applying for a Start-up Visa is not long. Note that you will have
to submit your business plan in Japanese to get a recommendation letter from
the local government office. Once you get all the documents ready, you can
apply at the immigration bureau. A start-up visa can be extended for another 6
months. This visa allows you to do the same things as 4-Month Business Manager
Visa does: obtain a residence card, open a bank account in Japan, and register
your business.
Obtaining an Investor
Visa
The investor visa is
another option for foreign investors looking for opportunities to start a
business in Japan. Investor visas can be granted for 1, 3, or 5 years. The
duration of the granted period and whether you are able to prolong it depend on
the profitability of your business and other relevant business performance
metrics. You don’t have to be in Japan to apply for an investor visa. As long
as you have the required documents, you can apply from the country you reside
in. The procedure is quite simple:
Establish your company:
Apply for an investor
visa Certificate of Eligibility (COE) at the immigration office. If you live
outside of Japan, you can put things in motion with the help of a certified
immigrant official. This process takes approximately 2 to 3 months.
Once the Certificate of
Eligibility is ready, you will have to pick it up from the immigration office.
Now you can exchange it for an investor status or residence (SOR) at the
Embassy or Consulate of Japan. It will take you an additional 2 weeks to get
the SOR.
If you don’t have the
means or opportunity to collaborate and get help from certified professionals
in Japan, you will have to do all this by yourself. This is why many investors
go with a 4-month visa and then submit the application for an investor visa
once they have settled all their business affairs.
The document
requirements for an investor visa vary depending on the type of company you are
planning to run and your financial situation. Here is the list of the documents
you might need to qualify for the investor visa:
Investment information
Elaborate business plan
Company registration
documents
Relevant business
licenses
Office rental
agreements
Proof of your
professional background
Relevant employee
documents
Opening a bank account
Since we mentioned
opening a bank account in Japan, let’s quickly look at the banking
opportunities you have in this country.
Choosing a bank and
opening an account can appear challenging to foreigners due to the language
barrier and complex bureaucratic procedures, especially to those planning to start
a business. Fortunately, there are foreigner-friendly banks in Japan that are
easy to register accounts with. These banks streamline account registration
process and make it convenient for foreigners:
Sumitomo Mitsui Banking
Corporation
This bank was founded
in 1876, making it one of the oldest banks in Japan. It has a great front desk
for foreigners. SMBC offers plenty of banking services specifically tailored to
meet the needs of foreign investors and entrepreneurs. Most importantly, all
these services are provided in English.
Shinsei Bank
Shinsei Bank is the
go-to place for many foreign investors planning to start a business in Japan.
SB did an excellent job when it comes to online banking. The bank provides
services in English and all the services are available online. This is very
convenient since you don’t have to visit the bank at any point to open the
account. You can do everything from the convenience of your home. The cash card
you will receive doesn’t work on the ATMs. On the other hand, SB has a very
wide network. You will be able to withdraw your money by visiting any of the
following banks Seven Bank, ENet, JR East Japan Railway, and other. Seven Bank
is another great bank for entrepreneurs with business plans in Japan. It also
offers services in English. Seven Bank is similar to Shinsei Bank in terms of
online banking.
You will find their
website particularly useful, as it features all the guides on the bank account
registration process in English. With the SB’s cash card, you will be able to
withdraw money from ATMs in 7-Eleven stores, shopping centers, and airports.
Japan Post Bank
While Japan Post bank
is predominantly a postal service, the company also provides bank services.
This is a good option because you can withdraw money across Japan.
There is no withdrawal
limit with Japan Post Bank and no international fees. Once you register an
account at JPB, you will receive a cash card and passbook. You will have to get
the required documents to register an account in any of the Japanese banks. The
requirements may vary from bank to bank, but these are the most common ones:
Proof of your residency
rights (4-month business manager visa, start-up visa, or investor visa)
Proof of residency (you
can get this one from the government office in the area of your residence)
Contact information
(phone number and address)
Japanese residence card
The initial deposit
amount (there are no minimum requirements here, but the most common initial
deposit amounts to a few thousand yen on average)
If you plan on sending
money to your home country, you should look for banks that offer a remittance
function. With this service, you will be able to send money outside of Japan
even if you are a foreigner.
To use this service you
are required to present:
Your address in Japan
Your name (the name has
to be in Japanese katakana script)
Your Hanko seal (most
banks will allow you to use your signature if you still don’t have your Hanko)
Your birth date
Your bank account PIN
Your gender
Step 2: Secure an
Office or Shared Space
The first step of
setting a business in Japan procedure is finding an office or shared space.
After all, you need a space to work, and depending on your business model,
generate revenue from. You have two options – rent an office in Japan for the
short term or for the long term.
Short-Term Office
Rentals
Renting an office in
Japan for the short term is a very popular option these days. The commercial
retail industry in Japan answered the demand continuously growing business
enterprises created.
There are a lot of
opportunities for you to explore. In Japan, short term office spaces are often
used as a synonym for serviced offices. They offer a lot more benefits than
other office rental options:
Flexible lease terms
A business address in
the town center
Excellent management
options
Low start-up costs
Access to furniture, IT
and telecommunications infrastructure, and office equipment
Before signing a lease,
you have to understand the basic lease terminology. We have an in-depth guide
about it which you can find here.
Long-term Office
Rentals
While services offices
offer great benefits to entrepreneurs coming to Japan, a long-term rental is
sometimes a more convenient option. Going with a long-term rental allows
entrepreneurs to set up their offices to reflect their brand image and company
culture.
Finding a long-term
rental space is not hard, and you can do it yourself by browsing the websites
specialized in advertising office spaces or going through ads in the
newspapers. If you find this overwhelming, you can always hire a real estate
agent to handle the renting process for you.
Learn about the common
lease terms and practices in Japan before signing a long-term rental lease.
Get Your Articles of
Incorporation Ready
Articles of
Incorporation or teikan (定款) are the bread and
butter of setting up a business in Japan. These documents determine how the
company is going to be managed, and they are different for every type of
business structure.
To make it convenient
for you, we have put them in two categories, Articles of Incorporation for a Foreign
Individual and for a Foreign Company. You will need both sets if you are a
foreign individual expanding your business in Japan.
Articles of
Incorporation for a Foreign Individual
Here is a list of
required documents needed for a foreign individual:
Seal certificate or
Inkan Shomeisho of investor and director – If you register as a resident in
Japan, you can get a seal certificate at a local city hall. The only document
that can replace it is a signature attestation (notarized signature). This
document has to be certified by the Embassy of Japan in your own country.
Company seal – To be
valid, you have to register a company seal at the registry office.
Investor’s personal
bank account and its passbook or tsuuchou (通帳)
– You also need a bank statement to prove the deposit of capital. You can use
an existing account or open a new one.
All Articles of
Incorporation and other documents should be signed or sealed by each investor
and director.
Articles of
Incorporation for a Foreign Company
If you are trying to
set up a daughter-company type of business in Japan, you will need the
following:
Registry certificate of
the parent company – The certificate has to be issued within 3 months.
Notarized Signature
attestation of the parent company’s representative.
Seal certificate of
each director – The certificate has to be issued within 3 months.
The Representative
Director’s personal bank account and bank statement – This is a must to prove
the deposit of capital.
Company seal – The seal
has to be registered at the registry office.
All Articles of
Incorporation and other documents must be signed or sealed by the parent’s
company and each director.
Additionally, you might
need a field-specific license to register and run your company. Here is
everything you need to know about business licenses in Japan.
Trademark Registration
Process
Japan is not much
different than any other country in terms of trademark laws. To claim the
absolute ownership of your company, you have to register a trademark.
Registering a trademark
means that the authorities of Japan will officially recognize it and see you as
the person of control and proprietorship over your company. In other words, a
trademark is not yours until the authorities officially recognize it.
In Japan you can
register:
Letters
Diagrams
Symbols
Pictures
Colors
Holograms
Moving marks
Position marks
3D objects
You need to apply at
the Japan Patent Office for trademark registration. If you have a permanent
residence or office in Japan, you can do it yourself. Otherwise, you will have
to hire a patent attorney or apply under Madrid and Paris Convention Agreement.
The following documents
are required for trademark registration:
Trademark registration
request in Japanese
Information about the
trademark including a description, drawings, claims, and an abstract in
Japanese
The representation of a
trademark
Complete list of
services and/or products associated with the trademark
The costs associated
with registering a trademark include:
Application fee of
¥12,000 for one trademark in one class, and an extra ¥8,600 for registering the
same trademark for an additional class
Registration fee of
¥28,200
Renewal fee ¥38,800
every 10 years (you have to renew it within the 6-months period prior to
trademark registration expiration date)
Know Your Hanko and
Inkan Seals
The most common thing
used in business as a personal identifier is a signature. You basically have to
put your signature to close the deal or sign a contract.
The banking sector
relies heavily on signatures, using them for personality identification. In
Japan, companies don’t rely on signatures, but on Hanko stamps, also known as
Inkans.
Basically, Hanko is a
personal stamp that serves as your personal identifier in Japan. Hanko contains
your name in either kanji, katakana alphabet or a Latin version on its stamping
surface. There are personal and business Hankos.
Personal Hankos
include:
Mitome-in – the loose
translation of Mitome-in is “recognition seal”. In Japan, it’s used to sign
basic contracts and put signature on documents in day-to-day procedures.
Ginko-in – Ginko-in or
“bank stamp” is primarily used for banking purposes (bank account management,
loan and credit approval). Not all banks require a Ginko-in seal from
foreigners. To be on the safe side, make sure to check whether you have to get
it with your bank.
Jitsu-in – Jitsu-in is
the “official seal”. Every Jitsu-in Hanko is unique and has to be registered
with the government because it is the most important one among the personal
Hankos. Since Jitsu-in is required for starting a company, you will have to
obtain one yourself.
Business Hankos
include:
Kaku-in – Kaku-in for a
company is what Mitome-in is for an individual. It’s used to sign the least
significant documents in the name of the company.
Ginko-in – Ginko-in for
businesses is required for financial transactions and the company’s bank
account management. It contains two circles.
The outer circle
features the name of the company, while the inner one serves as the corporate
seal for banking. Once you get Ginko-in, you will have to register it with the
bank.
Kaisha Jitsu-in – While
Jitsu-in is the most powerful and important personal Hanko, Kaisha Jitsu-in is
the most important business Hanko. You will have to register your Kaish
Jitsu-in with the Legal Affairs Bureau, the same one where you registered your
company.
Kaisha Jitsu-in is used
with Kaku-in. It contains two circles. The outer circle features a company
name, while the inner one contains a company representative’s name.
Hanko seals prices vary
depending on several factors including the material, diameter, design and
pattern, and registration. The price can go from ¥100 to ¥10,000.
Need more information ?
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Get the Articles of
Incorporation Notarized
If you are setting up a
gōdō gaisha or GK company, you will only have to notarize revenue stamps, which
will cost you 40,000 yen. In Japan, GK is a type of business organization
Americans call limited liability company (LLC).
On the other hand, if
you are setting up a kabushiki kaisha or KK company in Japan, you will need to
get all your Articles of Incorporation notarized. KK is a type of business
organization Americans call share company, stock company, joint-stock company,
or stock corporation.
The notarization of the
Articles of Incorporation is handled by the Notary Office or Koshonin Yakuba. The
notarization fee for KK companies in Japan is 50,000 yen, on top of
notarization fee for Revenue stamps, which is 40,000 yen.
Deposit the Initial
Capital
You won’t be able to
open your company’s bank account in Japan until you’ve completely finished the
registration process. You will have to use your personal bank account in Japan
to deposit the initial capital.
The process is also
simple for those of you setting up a subsidiary company in Japan. All you have
to do is make a deposit in the Representative Director’s personal bank account.
Get all the Documents Ready
Before finally
registering your company in Japan, you will need to get a few more documents
aside from the ones in the Articles of Incorporation. These documents include a
letter of agreement from the director about to assume your company office and
the proof of the company’s seal registration completion.
File the Application for Business Registration
Once you have
everything sorted out, you can file the application for business registration
at Registry Office or Homukyoku. If you are registering a KK type of business
registration fee will be a minimum 150,000 yen. For a GK business structure,
the registration fee starts at 60,000 yen.
Get the Registry
Certificate, Seal Certificate, and Corporate Number
After your company is
registered, you should acquire the registry certificate, company’s seal
certificate, and corporate number. You will need these documents to sign
employment and business contracts and to open your official corporate bank
account in Japan.
