A Guide to Starting A Business in Japan
Japan’s economy is the third-largest in the world and is predicted to continue its role as an economic powerhouse intothe future. The country is known as the “gateway to Asia” as you can gain access to the rest of the continent by establishing a foothold in Japan.
With a business in Japan, you are likely to benefit from the nation’s hard work ethic. This will provide you with constantmotivation to keep improving your business practices.
If you are considering expanding to Japan, here are comprehensive guidelines to help you get going.
1. Apply for A Visa
In order to begin a business in Japan, you will require one of the following visas:
4-Month Business Manager Visa
Introduced in 2015, the visa is issued to facilitate foreign nationals who wish to start a business in the country. In order to obtain this visa, you would have to provide substantial evidence of your plan to establish a company in Japan.
Make sure you submit all your documents before the deadline in order to get your visa timely. Once you receive the 4-month business manager visa in Japan, you are eligible for a residence card, opening a bank account, and registering your company.
This visa is usually valid for 6 months and is especially issued to welcome foreign entrepreneurs to the country. However, it is only available for selected cities, including Tokyo, Sendai City, Hiroshima and Aichi Prefectures, Imabari City, Fukuoka City, and Niigata City.
There is a concise list of documents that you need to submit for this visa. Nevertheless, it is vital to submit your business plan in Japanese and obtain a recommendation letter from the local government office.
Entering Japan through an investor visa is yet another path you can choose for starting a business in Japan. You can get this visa for 1, 3, or 5 years. The duration is granted based on the profitability of your business or your ability to prolong your stay.
You do not need to be physically present in Japan to obtain an investor visa. All you have to do is collect the required documents and simply apply from your home country. Nevertheless, know that you need to invest 5,000,000 Japanese Yen in order to apply for this visa.
2. Register an Office Address
In order to establish a business in Japan, you are required to register a physical office address in the country. A temporary office, a monthly rental office, or a virtual office are not acceptable.
Moreover, you cannot use your residence as your office, except in special circumstances. An officer of the Immigration Bureau of Japan would inspect the place you choose for your office in order to determine its acceptability.
3. Prepare the Articles of Incorporation
You will require a comprehensive business plan in order to launch a company in Japan. It should be practical and contain clear financial projections. Prepare the Articles of Incorporation (“teikan”), which would lay down how a company would be managed.
They can be broken down into 2 broad categories. If you are a foreigner establishing your business in Japan, you are likely to require both sets.
Articles of Incorporation for a Foreign Individual
As a foreign individual, you would require the following documents as part of the Articles of Incorporation:
- Seal certificate of investor or director: You can obtain this at a local city hall if you are registering as a resident in Japan. The seal certificate also has to be certified by the Embassy of Japan in your home country.
- Company seal: It is mandatory to register a company seal at the registry office.
- Investor’s personal bank account and its passbook (“tsuuchou”): You are required to produce a bank statement to show your capital deposit. You can either open a new account or use an existing one.
Articles of Incorporation for a Foreign Company
These need to be drafted when you are planning to establish a daughter-type of company in Japan. You would require the following documents:
- Parent company’s registry certificate: This needs to be issued in 3 months’ time.
- Notarized signature attestation of the representative of the parent organization.
- Each director’s seal certificate
- Personal bank account and bank statement of the Representative Director: This is mandatory in order to show the capital deposit.
- Company seal: This needs to be registered at the registry office.
All Articles of Incorporation need to be sealed or signed by each director and investor.
4. Hiring Employees
According to Japanese government regulations, your company in Japan should have a minimum of 1 full-time employee who should be either a Japanese citizen, permanent resident, a child or spouse of a citizen, a child or spouse of a permanent resident, or a foreign national with a long-term visa.
However, this requirement can be removed if you make an investment of 5 million yen or more in your business. You must also ensure that your company adheres to all Japanese laws and labor regulations.
In Japan, labor union activities are protected by law. Therefore, you cannot hire a person with a condition that they do not join a labor union.
Moreover, you are required to set down working rules and conditions in writing. As per Japanese law, businesses with 10 or more employees have to create work rules and file them with their Local Labor Standards Inspection Office.
A regular working week in Japan lasts 40 hours, and can be divided into eight-hour workdays. Employees working additional hours are entitled to overtime pay.
Japan houses a modern financial system that businesses of all sizes can benefit from. If your organization has a good credit score, it is quite easy to obtain loans for business purposes.
Japan also has several ports which can handle the import/export business of a new firm. With a robust business infrastructure and a culture that focuses on constant improvement, you are likely to enjoy heading a lucrative business in Japan.
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