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- Opening a bank account
(1) Foreign bank vs. Japanese bank
Foreign companies generally prefer to open a bank account at a Japanese branch of foreign bank that deals with their headquarters. However, it is advisable to have at least one bank account at a Japanese bank, because foreign banks do not have many local branches in Japan (even in Tokyo), and if they do, the locations are usually inconvenient for daily transactions etc. Furthermore, they may not handle payment of various taxes and social insurance premiums.
(2) Checking account vs. Ordinary account
In the US, checking accounts are commonly used for general cash disbursements, as a check is the primary means of payment there. On the contrary in Japan, we make most payments with cash remittance through ordinary bank accounts rather than checks. Therefore, it is advisable to open an ordinary account at a Japanese bank.
(3) "Hanko" (Seal)
It is not common to register a signature of authorized company representative at a bank for the purpose of verifying identification. Instead, we register a company’s seal (called “Hanko”) at the bank. We make cash withdrawals with this registered Hanko and a passbook. We should keep the Hanko separately from the passbook to avoid unauthorized withdrawals.
(4) Automatic transfer arrangement
It is quite popular in Japan to make automatic bank transfer arrangement for such periodical payments as rent, utilities (electricity, gas and water) and telecommunication. When implemented, pre-notice for automatic withdrawal is sent to the company for verification purpose together with receipt of prior month’s charge.
- How to find an office location
(1) Bilingual real estate agencies
Generally speaking, it is not easy to find an office location without experienced assistance, as it is quite difficult to understand the terms and conditions of lease agreements. And in some cases, office owners are still reluctant to lease their offices to foreign companies, despite the decline in office rent due to the slowdown of Japanese economy. Consequently, bilingual real estate agencies that deal specifically with foreign tenants to overcome these problems have appeared in major cities as Tokyo, Osaka and Nagoya.
(2) Leasehold deposit and key money
A leasehold deposit, and occasionally a key money, are required by a landlord for renting an office. Key money, a charge that is very common, especially in Western Japan, is nonrefundable. If a lease agreement states that some or all of the leasehold deposit is also nonrefundable, the non-refundable portion of the leasehold deposit, as well as the key money, can be treated as a deferred charge and can be amortized in accordance with Japanese tax law.
(3) Sub-lease and social insurance registration
Newly established companies often lease offices from other tenants under sublease agreements. In such cases, a social insurance office usually requests that you should register both the main leasing contract and the sub-lease agreement for social insurance purposes.
- VISA
A foreign investor can enter Japan with a Short-Term Stay Visa obtainable at Japanese diplomatic establishments abroad, for preparatory work in connection with operating a representative office (such as procuring office space and employing staff) so long as such person does not engage in business activities. However, it is advisable to obtain an Investment/Management Visa to stay longer in Japan as a representative of representative office. For this purpose, a foreign investor must apply for a “Certificate of Eligibility” at an Immigration Office in Japan, and after obtaining the Certificate, leave Japan to apply for an Investment/Management Visa at a Japanese diplomat establishment abroad.
Some countries have executed reciprocal visa exemption agreements with Japan, yielding the position that the citizens of those countries need not obtain visas, if their period of stay is to be within the designated period (except when they obtain employment or engage in business activities to receive payment in Japan).
A visa is also not required when a foreigner departs temporarily from Japan during the period of his/her stay, if such person files an application to the Immigration Office for a reentry permit prior to his departure.
- Recruiting
(1) Regular employees
There are several ways to recruit a new staff, including:
 An Employment Service for university graduates, training schools etc.
Public employment security office
Private employment agency
Advertisement in newspapers or magazines
Direct recruiting through personal contact
If you seek a candidate with business experience, professional expertise or English language ability, private agencies and English media, e.g. daily English newspapers, are effective means.
(2) Temporary staff
It has become popular in Japan to use private agencies to hire temporary or part-time staffs. Some agencies specialize in recruiting staffs from specific professions, e.g. secretarial, clerical, accounting and engineering. One particular benefit of using the staffing service provided by such agencies is that an employer who uses temporary staff does not have to handle the social insurance and withholding income tax matters, which are taken care of by the agencies. Therefore, to hire temporary staffs from the agencies can be extremely beneficial in the start-up stage of company, when its payroll function has not been established.
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