Setting Up a Company in Japan?

2015/8/28

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Hi, guys! This is Kodai from FirstStep.

Changes in law have now made it easier for non-Japanese people to form a corporation in Japan.
As globalization has accelerated, we have recently started supporting the establishment of many foreign companies in Japan.

This blog post will give you some key points regarding to the incorporation for non-Japanese people or entity, as well as the changes of law about visa and requirements for representative directors.

Table of Contents

  1. Various cases for incorporation
  2. Required documents and ways to obtain them
  3. Visa
  4. Changes in law
  5. Summary

japan

1. Cases for Incorporation

Below are various cases for incorporation for non-Japanese interest.

  1. Owners are Japanese people/entity. Directors are non-Japanese people.
  2. Owners are non-Japanese people/entity. Directors are Japanese people.
  3. Owners are non-Japanese people/entity. Directors are non-Japanese people.

Note: for limited liability company (Godo-Kaisya, 合同会社), owners and directors must be the same person.

In the case where the owners are either non-Japanese people or non-Japanese entity

In the process of incorporation, the amount of capital needs to be deposited into an owner’s bank account. For this bank account, you can use only a bank governed by the Banking Act. Foreign banks are not usually allowed by the Banking Act.
However, you can use an account opened at a foreign branch of a Japanese bank. In this case, you need a certificate issued by the bank stating the foreign exchange rate and amount deposited.
If the owner does not have a valid bank account, the following can be used to obtain one:

  1. If there are two owners or more and the representative owner has a valid bank account, his/her bank account can be used.
  2. If no owner has a valid bank account, but the representative director has a valid bank account, the owner can delegate the power to receive the amount of the capital.

In order to open a bank account in Japan, alien registration is required.

 

2. Documents and how to obtain them

These are some documents required in order to create a firm.

Below are the required documents, in general.

  • Written Application for Registration (touki shinseisyo, 登記申請書)
  • Articles of Incorporation (teikan, 定款)
  • Resolution for Location of the Head Office (honten syozaibasyo ketsugisyo, 本店所在場所決議書) For LLC, Written Decision for Representitive Officer, Location of the Head Office and Capital (daihyousyain hontensyozaichi oyobi shihonkin ketteisyo, 代表社員本店所在地及び資本金決定書)
  • Letter of Appointment Acceptance (syuunin syoudakusyo, 就任承諾書)
  • Registration of Seal-impression (inkan todokesyo, 印鑑(改印)届書)
  • Certificate of Payment of Capital (shihonkin no haraikomi syoumeisyo, 資本金の払込証明書)
  • Certificate of Seal Registration for the owners (inkan touroku syoumeisyo, 印鑑登録証明書)
  • If the owner is a company, Certificate of All Historical Matters (rireki jikou zenbu syoumeisyo, 履歴事項全部証明書) and Certificate of Company Seal Registration (daihyouin no inkan syoumeisyo, 代表印の印鑑証明書)
  • Certificate of Seal Registration for the directors (inkan touroku syoumeisyo, 印鑑登録証明書)

For incorporation involving non-Japanese citizen and/or entity, the following documents are required:

  • Written Application for Registration (touki shinseisyo, 登記申請書)
  • Articles of Incorporation (teikan, 定款)
  • Resolution for Location of the Head Office (honten syozaibasyo ketsugisyo, 本店所在場所決議書) For LLC, Written Decision for Representitive Officer, Location of the Head Office and Capital (daihyousyain hontensyozaichi oyobi shihonkin ketteisyo, 代表社員本店所在地及び資本金決定書)
  • Letter of Appointment Acceptance (syuunin syoudakusyo, 就任承諾書)
  • Registration of Seal-impression (inkan todokesyo, 印鑑(改印)届書)
  • Certificate of Payment of Capital (shihonkin no haraikomi syoumeisyo, 資本金の払込証明書)
  • Signature Certificate for the owners and translation (sign syoumeisyo, サイン証明書)
  • If the owner is a company, Affidavit and translation (sensei kyoujutsusyo, 宣誓供述書) and Signature Certificate for the representative director and translation (sign syoumeisyo, サイン証明書)
  • Signature Certificate for the directors and translation (sign syoumeisyo, サイン証明書)

The differences are:

  • If the owners or directors are non-Japanese, you need a Signature Certificate instead of a Certificate of Seal Registration.
  • If the owner is a non-Japanese entity, you need an Affidavit and a Signature Certificate instead of a Certificate of All Historical Matters and a Certificate of Company Seal Registration.

Note:

  • Translation can be made by anyone. It does not have to be a certified translator.
  • The date issued for the Certificate of Seal Registration, the Certificate of All Historical Matters, the Signature Certificate and the Affidavit must be within three months of the company’s establishment date.
  • The Signature Certificate and the Affidavit must be attested by a public notary in the owners/directors’ own country or an embassy of this country in Japan.

 

3. Visa

In order to run a company, a Business Manager Visa is required.
A Business Manager Visa is required when non-Japanese citizen are to manage a company.
Below are the basic requirements for a Business Manager Visa.

  • The company must have an offfice in Japan.
  • The size of the business must be more than any of the below:
    • Besides the directors, the company hires two or more employees who are Japanese residents.
    • Amount of the capital is five million yen or more.
    • The size is equivalant to any of two above.
  • The visa applicant has experience of managing a company for three years or more, and he/she is going to receive an amount of the director’s remuneration at least as equally as the remuneration the Japanese directors are to receive.

However, if you have any visas that do not limit activity such as Spouse visa and Permanent Resident visa, the Business Manager Visa is not needed.
Thus, anyone who is not a Japanese citizen and is accepted as a director, and enters Japan in order to manage a company needs to have the Business Manager Visa.

Below are status of residence in Japan that do not limit the activity.

  • Permanent Resident
  • Spouse of Japanese national
  • Spouse of Permanent Resident
  • Long Term Resident

 

4. Good news for non-Japanese citizens who want to launch an organization in Japan

An investor/manager visa was required before, and this visa could be obtained only after the registration for the incorporation of a company.
Thus, there was a possible risk of not been able to obtain the visa after the incorporation.
Also, at least one representative director had to have a Japanese residential address.

Changes to Business Manager Visa

According to the revision of law issued at 18th June 2014, the visa required for non-Japanese citizen directors is now a Business Manager Visa. Thus, it is now possible to apply for the visa before the registration of incorporation.
Also, by holding the Business Manager visa, opening a bank account in Japan is easier.
Remember that an amount of capital is needed to be deposited into an owner’s bank account during the incorporation process.

The flow updating the Business Manager Visa is the following.

  1. After the Articles of Incorporation is made, one needs to apply the Business Manager Visa for a 4 month of period of stay and complete the incorporation process of a company.
  2. After the registration of incorporation, one needs to apply to update the visa for one year of the period of stay.

Note that there are possibilities that the application for the visa is not approved or application for the update is not approved.
It is wise to ask your lawyer to help with your visa application process.

 

Registration can be completed regardless of representative directors’ residential address

The Ministry of Justice has just changed the requirement for representative directors’ residential address. Therefore, a company that has a representative director who does not have a residential address in Japan can apply for registration.

 

5. Summary

  • Depending on the structure of directors and/or owners, there may be obstacles for incorporation.
  • Additional documents might be required such as a Signature Certificate.
  • If you need to obtain a Business Manager Visa, you should ask your lawyer about the possibility of getting the visa.

 

FirstStep, based in Osaka Japan, provides incorporation, tax and accounting services for entrepreneurs.
If you are interested in starting a business in Japan and/or have any questions, please contact us.

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