1. Opening a bank account
(1) Company bank account and Personal bank account
A company, a branch, or an LLP is able to obtain a “certificate of company registry (Tokijikoshoumeisho)” as such entity requires registration at the Legal Affairs Bureau. Therefore, these types of entities can open their own bank account under the name of company, branch, or LLP by certifying their existence in Japan by the certificate aforesaid. On the other hand, a representative office cannot open its bank account under the name of the representative office as it cannot obtain any public certificate such as a “certificate of company registry (Tokijikoshoumeisho)” certifying its existence in Japan. Only a personal bank account of a representative, etc. can be opened.
(2) 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, since using foreign banks is usually inconvenient for daily transactions, etc. because foreign banks do not have many local branches in Japan (even in Tokyo) and are not registered as a national revenue agency which may handle payment of various taxes and social insurance premiums.
(3) Checking account vs. Ordinary account
In the US, checking accounts are commonly used for general cash disbursements, as checks are the primary means of payment there. In Japan, however, we make most payments via cash remittance through ordinary bank accounts rather than checks. Therefore, it is advisable to open an ordinary account at a Japanese bank.
(4) “Hanko” (Seal)
It is not common to register the signature of the authorized company representative at a bank for the purpose of verifying identification. Instead, we register a personal seal in the case of a representative office, and register a company’s seal in the case of a corporation or branch, at the bank. We can withdraw up to a certain amount using a cash card and ATM, however, if the amount required exceeds certain limits, it may be withdrawn only with the registered Hanko and a passbook at the bank in person. The Hanko and the passbook should be stored separately to avoid unauthorized withdrawals.
(5) Automatic transfer arrangement
In Japan many companies set up automatic bank transfer arrangements for periodic payments such as rent, utilities (electricity, gas and water) and telecommunications. When implemented, an advance notice of the automatic withdrawal is sent to the company for verification purposes together with a receipt for the prior month’s charge.
2. 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. Consequently, bilingual real estate agencies that deal specifically with foreign tenants to overcome these problems have appeared in major cities like Tokyo, Osaka and Nagoya.
(2) Leasehold deposit and key money
A leasehold deposit, and, occasionally, payment of 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.
3. Status of Residence
(1) -1 Temporary Visitor Visa
Foreigners wishing to enter Japan to conduct preparations, such as selection of a facility for business, hiring staff, etc., in order to open/establish a representative office, branch, or company are required to obtain a temporary visitor visa at a Japanese diplomatic establishment. Foreigners show such visa at a port of entry of an airport or seaport in order to get landing permission, and then enter Japan.
Nationals of countries with visa exemption arrangements with Japan do not require a visa for application for landing permission for short-term stays. However, please note that the waiver of visa requirements is not applicable in the case of stays exceeding the period of time stipulated in each arrangement.
Engaging in paid activities in Japan with a temporary visitor visa is prohibited.
Please start with the procedure for obtaining status of residence as soon as possible in order to work continually at a representative office, a branch, or a company.
(Engaging in the operation of an income-producing business or paid activities do not fall under the category of “temporary visitor” no matter how short the term of stay in Japan is.)
(1) -2 Multiple-entry temporary visitor visa
A Multiple-entry temporary visitor visa may be applied for at Japanese diplomatic offices abroad (Japanese Consulates-General, etc.) for short-term business affairs (business trips, etc.) when an applicant fulfills certain requirements, such as being a person in the position of manager or above, or an employee working for more than one year in a company which is a government enterprise, or a company listed on the stock exchange, etc.
S/he can stay in Japan for 90 days or less per visit, and the validity period of such visa is for “1 year”, “3 years” or “5 years”.
In no case is it permitted to perform activities to undertake revenue-generating business operations or activities to receive remuneration.
(1) -3 Visa For Medical Stay
A “Visa for Medical Stay” is a visa issued to foreign patients wishing to visit Japan for medical purposes (including full medical check-ups, etc.). Such visa may also be issued to persons accompanying foreign patients if necessary, and as needed. Under this category, individuals who have a multiple-entry temporary visa can stay in Japan for 90 days or less per visit. Nevertheless, a maximum 6 month period of stay may be allowed when patients are required to stay at a Japanese medical institution. However, please note that if the expected period of stay is longer than 90 days, such foreign patients are required to obtain a Certificate of Eligibility from the Immigration Bureau of the Ministry of Justice.
The validity period of a Visa for Medical Stay is 3 years.
(2) Types of Status of Residence
When a foreigner wishes to stay in Japan for work, etc., s/he must obtain a status of residence where the activities to be engaged in are applicable from among 27 types of status of residence stipulated in the Immigration Control and Refugee Recognition Act (hereinafter “Immigration Regulation”).
The List of Categories of Status of Residence
(Annexed table 1 and Annexed table 2 of the Immigration Control and Refugee Recognition Act)
(1)
| Status of Residence | Authorized Activities |
|---|---|
| Diplomat | Activities on the part of constituent members of diplomatic missions or consular offices of foreign governments hosted by the Government of Japan; activities on the part of those who are provided with similar privileges and/or immunities as is given to diplomatic missions in accordance with treaty or international customary practices; and activities on the part of their family members belonging to the same household. |
| Official | Activities on the part of those who engage in official business of foreign governments or international organizations recognized by the government of Japan; and activities on the part of their family members belonging to the same household(excluding the activities described in this table’s “Diplomat” section). |
| Professor | Activities for research, direction of research or education at colleges, equivalent educational institutions or “koto-senmongakko.” |
| Artist | Activities for the arts that provide income, including music, the fine arts, literature, etc. (excluding the activities described in the “Entertainer” section of Table (2)). |
| Religious Activities | Missionary and other religious activities conducted by foreign religious organizations. |
| Journalist | News coverage and other journalistic activities conducted on the basis of a contract with foreign journalistic organizations. |
(2)
| Status of Residence | Authorized Activities |
|---|---|
| Investor/Business Manager | Activities to commence the operation of international trade or other business, to invest in international trade or other business and to operate or manage that business, or to operate or manage international trade or other business on behalf of foreign nationals (including foreign corporations; hereinafter in this section “foreign national” is to include “foreign corporation”) who have begun such an operation or have invested in such a business (excluding engaging in the operation or management of business which is not allowed without legal qualifications described in this table’s “Legal/Accounting Services” section). |
| Legal/Accounting Services | Activities to engage in legal or accounting business which is required to be carried out by attorneys recognized as foreign law specialists under the foreign lawyers’ law (“Gaikokuho Jimubengoshi”), certified public accountants recognized as accountants practicing foreign accounting under the Accountant Law (“Gaikokukoninkaikeishi”) or those with other legal qualifications. |
| Medical Services | Activities to engage in medical treatment service which is required to be undertaken by Physicians, dentists or those with other medical qualifications. |
| Researcher | Activities to engage in research on the basis of a contract with public or private organizations in Japan (excluding the activities described in the “Professor” section of Table (1)). |
| Instructor | Activities to engage in language instruction and other education at elementary schools, junior high schools, high schools, school for the blind, handicapped children’s schools, advanced vocational schools, (“Senshu-gakko”) vocational schools (“Kakushu-gakko”) or other educational institutions equivalent to vocational schools in facilities and curriculum. |
| Engineer | Activities to engage in service which requires technology and/or knowledge pertinent to physical science, engineering or other natural science fields, on the basis of a contract with public or private organizations in Japan (excluding the activities under “professor” section of Table (1) and excluding the activities described in the “Investor/Business Manager”, “Medical Services”, “Researcher”, “Instructor”, “Intra-company Transferee”, and “Entertainer” sections of this Table). |
| Specialist in Humanities/ International Services | Activities to engage in service which requires knowledge pertinent to jurisprudence, economics, sociology or other human science fields, or to engage in service which requires specific ways of thought or sensitivity based on experience with foreign culture, based on a contract with public or private organizations in Japan (excluding the activities described in the “Professor”, “Artist”, and ” Journalist” sections of Table(1) and excluding the activities described in the “Investor/Business Manager”, “Legal/Accounting Services”, “Medical Services”, “Researcher”, and “Entertainer” sections of this Table). |
| Intra-company Transferee | Activities on the part of personnel who are transferred to business offices in Japan for a limited period of time from business offices which are established in foreign countries by public or private organizations which have head offices, branch offices or other business offices in Japan and who engage at these business offices in the activities described in the “Engineer” or “Specialist in Humanities/International Services” section of this Table. |
| Entertainer | Activities to engage in theatrical performances, musical performances, sports or any other show business (excluding the activities described in the “Investor/Business Manager” section of this Table). |
| Skilled Labor | Activities to engage in service which requires industrial techniques or skills belonging to special fields on the basis of a contract with public or private organizations in Japan. |
| Technical Intern Training | (i) Activities which fall under any of items (a) or (b) (a) Activities by a personnel who works for a business office in a foreign country established by a public or private organization in Japan or by a personnel who works for a business office in a foreign country established by a foreign public or private organization which has a business relationship with a public or private organization in Japan as provided by Ordinance of the Ministry of Justice, the purpose of which is to acquire skill, technology and knowledge (hereinafter referred to as "skills") by engaging in the operational activities of a public or private organization in Japan at its business office in Japan, based on an employment contract with such public or private organization in Japan (including activities of those personnel toward acquiring the knowledge necessary for the relevant activities described above which they are to engage in, which are conducted by being accepted at the business office of the Japanese public or private organization in Japan). (b) Activities to acquire knowledge being accepted by a non-profit organization which conforms to the requirements provided by Ordinance of the Ministry of Justice and activities to acquire skills where such activities are conducted based on such non-profit organization's planning and under its responsibility and supervision, based on an employment contract with a public or private organization in Japan, by engaging in its operational activities. (ii) Activities which fall under (a) or (b). (a) Activities by a personnel, who has acquired skills by engaging in activities as provided in the preceding item (a), in order to further develop such skills, based on an employment contract with a public or private organization in Japan designated by the Minister of Justice, to engage in operational activities requiring such skills at such organization. (b) Activities by a personnel, who has acquired skills by engaging in activities as provided in the preceding item (b), in order to further develop such skills, based on an employment contract with a public or private organization in Japan designated by the Minister of Justice, to engage in operational activities requiring such skills (limited to business activities under the responsibility and control of the non-profit organization which conforms to requirements provided by Ordinance of the Ministry of Justice). |
(3)
| Status of Residence | Authorized Activities |
|---|---|
| Cultural activities | Academic or artistic activities that provide no income, or activities for the purpose of pursuing specific studies on Japanese culture or arts, or activities for the purpose of learning and acquiring Japanese culture or arts under the guidance of experts (excluding the activities described in the sections from “College Student” to “Trainee” in Table(4)). |
| Temporary Visitor | Sightseeing, recreation, sports, visiting relatives, going on inspection tours, participating in lectures or meetings, business contact or other similar activities during a short period of stay in Japan. |
(4)
| Status of Residence | Authorized Activities |
|---|---|
| College Student | Activities to receive an education at a university, college of technology (kotosenmongakko), senior high school (including a course of study in the latter part of secondary educational school (chutokyoikugakko)), senior high school course of school for special needs education (tokubetsushiengakko), vocational school (senshugakko), miscellaneous educational institution (kakushugakko) or an equivalent educational institution in terms of facilities and organization in Japan. |
| Pre-college Student | Activities to receive education at high schools, high school courses of schools for the blind or handicapped children’s schools, higher or general courses of advanced vocational schools (“Senshugakko”), (excluding the educational institutions described in the “College Student” section of this Table) or the other educational institutions which are equivalent to vocational schools in facilities and curriculum. |
| Trainee | Activities to learn and acquire technology, skills or knowledge at public or private organizations in Japan (excluding the activities described in the “College Student” and “Pre-college Student” sections of this Table). |
| Dependent | Daily activities on the part of the spouse or unmarried minor child of those who stay in Japan with the status of residence mentioned in Tables (1), (2) or (3) (excluding “Diplomat,” “Official” and “Temporary Visitor”) or those who stay with the status of residence of “College”, “Pre-college” or Trainee” in this Table. |
(5)
| Status of Residence | Authorized Activities |
|---|---|
| Designated Activities | Activities which are specifically designated by the Minister of Justice for foreign individuals. |
Annexed Table II
| Status of Residence | Personal relationship or status on which the residence is authorized |
|---|---|
| Permanent Resident | Those who are permitted for permanent residence by the Minister of Justice. |
| Spouse or Child of Japanese National | The Spouses of Japanese nationals, the children adopted by Japanese nationals in accordance with the provision of Article 817-2 of the Civil Code (Law No. 89 of 1896) or those born as the children of Japanese nationals. |
| Spouse or Child of Permanent Resident | The Spouses of those who stay with the status of residence of “Permanent Resident” or those who are Special Law on the Immigration Control of, inter alia, those who have lost Japanese Nationality on the basis of the Treaty of Peace with Japan (hereinafter referred to as “permanent resident, etc.”), those born as children of permanent residents, etc. in Japan and have been residing in Japan. |
| Long Term Resident | Those who are authorized to reside in Japan with a designation of period of stay by the Minister of Justice in consideration of special circumstances. |
Applicable status of residence and conditions vary depending upon the activity to be engaged in. Also, the required documents, etc. vary in each case, thus, it is advisable to consult with specialists such as Gyoseishoshi (Solicitors), etc.
(3) Major Categories of Status of Residence
Criteria and supporting documents for the following 5 major categories of status of residence for work are listed below.
- Investor/Business Manager
- Engineer
- Specialist in Humanities/International Services
- Intra-company Transferee
- Skilled Labor
(3)-1 Investor/Business Manager
[Criteria]
Business must be run properly, and be recognized as stable and continuing.
- Facility for the business must be reserved.
- Employ two or more full-time employees other than the person engaged in operation or management of the business, or invest 5 million JPY or more.
*full-time employees must be a Japanese national, permanent resident, spouse of Japanese national or permanent resident, or long-term resident. - (For Manager)
Must have three or more years experience in operations or management and must receive equal or greater compensation when a Japanese national is in the same position.
[Supporting Documents]
- Material Certifying Business
- Certified Copy of Company Registration (issued within the last 3 months)
- The latest financial statement (Business plan for a newly established company)
- Brochure, etc.
- Material Certifying Number of Full-time Staff and Wage Payments of the Staff Concerned
- Copy of employment contract or copy of payroll book
- Residence certificate or copy of alien registration card
- Employment insurance fee payment receipts, etc.
- Material Certifying Business Place
- Company brochure
- Copy of lease agreement, etc.
(3)-2 Engineer/Specialist in Humanities・International Services
[Criteria]
- Majored in the subject related to the necessary knowledge for the business to engage in and graduated, or having 10 years or more work experience in the business to be engaged in.
(When engaged in interpreting, translation, language teaching, or overseas operations, etc., 3 years or more work experience in the business to be engaged in is required. However, university graduates who wish to engage interpreting, translation or language teaching are not required to have such experience.) - Must receive equal or greater compensation when a Japanese national is in the same position.
[Supporting Documents]
- Material Certifying Business of the recipient organization
- Certified Copy of Company Registration (issued within the last 3 months)
- The latest financial statement (Business plan for a newly established company)
- Brochure, etc.
- A diploma or a certificate of graduation with a major in the subject regarding the activity of the person concerned, and documents certifying his/her professional career.
- A diploma or a certificate of graduation
- Documents certifying applicant’s professional career
- Applicant’s CV, etc.
- Documents certifying the activity, its duration, the position, and the remuneration of the person concerned
- A copy of the employment contract between the applicant and the recipient organization, etc.
(3)-3 Intra-company transferee
[Criteria]
Activities by personnel who are transferred from business offices in foreign countries to business offices in Japan for a limited period of time and who engage in the activities described in the “Engineer” or “Specialist in Humanities/International Services” sections.
- Must be continuously working for more than 1 year for head office, branch offices, or other business offices just before the transfer and engage in the activities described in the “Engineer” or “Specialist in Humanities/International Services” sections.
- Must receive equal or greater compensation when a Japanese national is in the same position.
[Supporting Documents]
- Documents certifying the relationship between the business office in a foreign country and the business office in Japan
- Notice of commencement of business
- Brochure, etc.
- Material Certifying Business of the business office in Japan
- Certified Copy of Company Registration (issued within the last 3 months)
- The latest financial statement (Business plan for a newly established company)
- Brochure, etc.
- Documents certifying the activity and its duration in the business office in a foreign country
- Documents certifying the activity and its duration for the last year before the transfer, such as certificate of employment issued by the business office in a foreign country
- Material Certifying Business of the business office in a foreign country
- Certified Copy of Company Registration (issued within the last 3 months)
- The latest financial statement (Business plan for a newly established company)
- Brochure, etc.
- Documents certifying the activity, its duration, the position, and remuneration
- Notification of transfer, etc.
- A Diploma and documentation certifying the career
- A diploma or a certificate of graduation
- CV, etc.
(3)-4 Skilled Labor
[Criteria]
- Must receive equal or greater compensation when a Japanese national is in the same position.
- Activities to engage in service that require industrial techniques or skills belonging to special fields.
- E.g.)A person who has more than 10 years work experience in food preparation, or food manufacturing techniques which were invented in a foreign country and to engage in business activities that requires such skills.
(However, based on a treaty between Japan, there are some cases where only 5 years work experience is required to engage in business activities requiring such skills.)
- E.g.)A person who has more than 10 years work experience in food preparation, or food manufacturing techniques which were invented in a foreign country and to engage in business activities that requires such skills.
[Supporting Documents]
- Material Certifying Business of the recipient organization
- Certified Copy of Company Registration (issued within the last 3 months)
- The latest financial statement (Business plan for the newly established company)
- Brochure
- List of foreign employees, etc.
- A personal history and documents issued by the official organization which certify the career and the qualifications regarding the activity
- Applicant’s CV
- If a certificate of qualification issued by the official organization is available, a copy of the certificate
- Documents certifying the activity and its duration, such as a certificate of employment issued by the business office in a foreign country
- Documents certifying the activity, its duration, the position, and remuneration
- A copy of employment contract between the applicant and the recipient organization, etc.
(4) Certificate of Eligibility
When foreigners wish to enter Japan under the status other than “Temporary Visitor”, the Immigration Regulation stipulates that the Minister of Justice is able to issue a document certifying applicability of status of residence for the activity a foreigner is to engage in by examining compatibility in landing condition for status of residence based on an application by the foreigner. Such document is called a Certificate of Eligibility.
A foreigner who has a Certificate of Eligibility will obtain a visa from an embassy or consulate by showing the Certificate of Eligibility. Then, they may enter Japan after obtaining landing permission from an Immigration officer at the port of entry. The advantage of having a Certificate of Eligibility is that the length of time for examination for visa and landing will be shortened, as compatibility in landing condition for applicability of status of residence, etc. can be proved easily.
Application for issuance of a Certificate of Eligibility will be made at the Regional Immigration Bureau which has jurisdiction over the planned residential address or the location of the recipient organization. As stipulated in the Ministry of Justice’s ordinance, submission of the application can be done by proxy such as personnel of the recipient organization, or by registered Gyouseishoshi (solicitor) who is authorized to submit the application for the applicant.
General Flow of Application for Certificate of Eligibility
(5) Resident Card and Resident Record for a Foreign Resident
With introduction of the new residency management system effective on July 9th, 2012, the alien registration system will be abolished; and Resident Card and Resident Record issuance system will be newly started which will be applicable to foreign nationals residing legally in Japan for the mid- to long-term with resident status under the Immigration Control Act (hereinafter “mid- to long-term residents”).
(the alien registration certificate for mid- to long-term residents will be deemed, for a certain period, to be equivalent to the resident card.)
Mid- to long-term residents means foreign nationals who do not come under any of the following i) through to vi).
i) Persons granted permission to stay for 3 months or less;
ii) Persons granted “Temporary Visitor” status;
iii) Persons granted “Diplomat” or “Official” status;
iv) Persons recognized by Ministry of Justice ordinance as equivalent to the foreign nationals in the aforementioned i) to iii);
v) Special permanent residents;
vi) Persons with no resident status.
①Resident Card
A resident card will be issued to mid- to a long-term residents when granted permission pertaining to residence, such as landing permission, permission for change of resident status and permission for extension of period of stay. A resident card will contain the holder's picture, name, nationality/region, date of birth, sex, status of residence, period of stay, eligibility to work, etc., and the holders are required to carry it with them at all times.
②Resident Record for a Foreign Resident
For foreign nationals to whom issuance of resident card is applicable, Resident Record will be prepared based on “Basic Registration Act”, and the foreign nationals will be able to obtain a copy of their Resident Record like Japanese nationals.
Foreign nationals to whom issuance of resident card is applicable have obligation to visit the municipal office where they live and notify the place of residence within 14 days of finding a place to settle down.
(6) Re-entry Permit
Foreign nationals who will be re-entering Japan by the expiration date of period of stay or within 1 year of their departure, whichever is shorter, are in principle, not required to apply for a re-entry permit.
(7) Permission for Extending Period of Stay
-
This permission is required when a foreigner wishes to remain in Japan under the same status of residence after the originally authorized term of residence has expired. Applications must be made before the term of residence expires (a foreigner who has a 6 month or longer authorized term of residence can apply for such permission 3 months prior to the expiration date.)
-
A foreigner who applies for permission for extending period of stay before their term of residence expires may stay in Japan under their current status of residence until the application result is issued, or 2 months after the expiration date of the current status of residence, whichever comes first, even though the application result is not issued until the expiration date of the current term of residence.
Period of stay for status which qualified to work, excluding “Diplomat”, “Official”, “Designated Activities”, “Technical Intern Training”, and “Entertainer” for show business activities, etc., shall be “3 months”, “1 year”, “3 years”, or “5 years”.
(8) Change of Status of Residence
This permission is required when a foreigner wishes to cease his or her present activity and engage in another activity covered by a status of residence different from the one originally granted.
General Flow of Application for permission for the change of status of residence/extending period of stay
4. 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 staff. Some agencies specialize in recruiting staff 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 social insurance and withholding income tax matters, which are taken care of by the agencies. Therefore, hiring temporary staff from these agencies can be extremely beneficial in the start-up stage of a company when its payroll function has not been established.