Two laws related to foreigners starting a business in Japan
If you are foreigner and you start your own business in Japan, you should remember two kinds of laws.
The first is company law and the other is immigration law. I shall explain 3 major issues here.
There are two issues around capital. One is the issue of business scale and the other is the source.
(1) Business scale
You can launch your own company with only 1 yen as capital, but you should prepare 5,000,000 yen for getting a visa. Because immigration law demands a business scale of over 5,000,000 yen.
The easiest way to prove your business scale is by establishing a company. Because the capital is registered on the company record.
If you want to prove 5,000,000 with a bank book, you must explain that the 5,000,000 yen in the book is undoubtedly the capital. However, it is very difficult. It may or not be the capital. It may be the money for the trip or a down payment for a house.
Therefore, you should apply for your “Investment and management” visa after establishing your company.
(2) The source
Capital should be used as capital. Therefore, it must not be displayed as money. So you should explain where this money comes from. If you save the money by yourself, you can explain it using your book. The source is obvious. But if you borrow the money from a friend, you need to make a contract and plan repayment at the very least.
2. Address in Japan
If you do not have an address in Japan, you cannot open a bank account. It is also difficult to rent an office. It seems you cannot set up your company without a visa.
If you already have residence status as, for example, a “Student”, it is not so difficult to establish a company. You can change your residence status to “Investment and management” after establishing a company.
If you do not have an address in japan, the process will differ depending on the case.
- If you have a bank account in Japan, you can set up the company using this.
- In case that you have an account at a Japanese bank branch in your country, you can use that account. The bank account in which you deposit the capital must be “a bank prescribed in Article 2 (1) of the Banking Act in Japan”. The foreign branch of a Japanese bank satisfies this condition.
- In case you do not have an address in japan or any bank account, you need a partner in Japan. The partner establishes the company instead of you. You then become the president before applying for the visa.
Using the “Tokyo program”, you can obtain a 6 month visa without having an address in Japan. You don’t need a partner either. The explanation of “Tokyo Program” is at the end of this section.
3.Location of the head office
When you set up a company, you can put your head office anywhere. However, immigration law requests you to separate your working room from your living area.
In the case you put your head office at home, the room used as office must be exclusive. In addition the permission for using this as an office by the owner must be written on the estate lease contract.
In the case of using rental office, an independent room is required. So called virtual offices are not available.
About Tokyo Program
The correct title is “Program to increase foreign entrepreneurs”
Tokyo has started a new system for foreign entrepreneurs, enabling them to start businesses easily.
As you know it is difficult to start a business in Japan for foreigners.
Foreigners need to get the “Investment and business manager” residence status. To get this status, in addition to setting up a company, you must invest at least 5 million yen or use at least two full-time employees who must be Japanese citizens or “Permanent residence”, “Spouse of Japanese”, “Spouse of permanent residence” or “Long term” residence holders.
Using the new system, you can enter Japan with a “Short stay visa”, and submit the permit to the Tokyo Metropolitan District. The Tokyo Metropolitan District shall check whether the business plan you have made is realistic. If Tokyo judges the plan to be realistic, you can get the status of “Investment and business manager” for 6 months. You can then set up a company and prepare all you need to start up the business with this status.
If you can satisfy the conditions after 6 months, the status will be updated to a longer term one.