Introduction
Starting your own business sounds like something anyone wants to do. “Be your own boss” is the phrase we heard most often. People can achieve goals through their own business , instead of just working for others. However, Whether you are in Japan or another country, whether you are a foreigner or a native, starting a business is not an easy task. Today SUGEE Kansai will introduce you what is the difference between the process of starting a business in Japan for foreigners and Japanese.
Procedure
STEP 1: Decide on the type of company and Create a Business plan
Please click the following links to know more about types of companies in Japan.
For entrepreneur, it is important to create a business plans thoroughly. The more specific the plan, the more likely it is to pass the examination, especially for foreigners.
| Common Contents 1) Motivation for starting a Business（Problems and target customers) 2) Market volume, Market growth 3) Competitive Advantage 4) Business model（goods, capital, and human resource） 5) Management / Manegement Team 6) Revenue Plan and Its Assumptions 7) financial situation 8) Reasons for Growth and Expected Business Risk…… |
| Things to note for foreigners 1)Business conditions Since you cannot obtain another status of residence, The Immigration Bureau will confirm whether you are actually and only doing the business you apply for or not. 2)Business management visa The business contents must meet the legal requirement for business management visa. 3)Stability and continuity of business. Due to the instability of foreigners’ residence time and the return of business financing. Compared with the Japanese, they will pay more attention to the sustainability and stability of foreigners’ business |
STEP 2: Set up a company
| Common Contents ① Decide the basic matters to set up a company(Company name, company address, business purpose, founder (shareholder), capital etc) ② Creating the articles of incorporation ③ Certify the articles of incorporation at the notary office ④ Transfer capital to your (director’s) personal bank account ⑤ Registration to the Legal Affairs Bureau ⑥ Notifications to the tax office ⑦ Acquiring Business License (if necessary)(Duty free shop, real estate business, travel industry etc.) (⑧ Apply for Business Management VISA) (⑨ Notifications to the pension office · Labor Office) |
| Things to note for foreigners 1) For item 2, Since foreigners who live abroad have not yet got an address in Japan, they can not obtain a Japanese seal stamp certificate and also the residence card so that it is difficult to contract real estate. In this case they need to have business partners in Japan (directors of their companies) contract for real estate for business. 2) For item 4, people who do not have a personal bank account in Japan can not establish a company in Japan. Japanese banks are not allowed to make a bank account for foreigners who do not have Japanese resident cards to prevent money laundering.So they need a business partner who live in Japan to lend a bank account. 3)For item 5, If all directors reside in Japan, they need to prepare the same documents as Japanese. · Two Japanese seal impression certificates · Individual’s seal · The seal of the company (to be established from now) If you have directors resident in foreign countries · Certificate of seal impression of each country etc. and translation · The seal of the company (to make from now) |
* Depending on the type of company, the specific documents required for establishing a company are different. For the specific required documents, please refer to the following articles introduced the types of companies in Japan.
STEP 3: Acquire a business license (as necessary)
In this step, you need to prepare exactly the same as the Japanese. Depending on the content of the business you want to start, you may have to get a business license from the government. This is also a necessary condition for you to obtain a business management visa.
| Jurisdiction | Validity period | |
| Building land building trading business | The Minister of Land, Infrastructure, Transport, and Tourism or the prefectural governor | 5 years |
| Construction industry food & Beverage、Coffee Shop | The Minister of Land, Infrastructure, Transport, and Tourism or the prefectural governor | 5 years |
| Antique business・Second hand goods sale | Prefectural governor or mayor | 6 years |
| Worker dispatching business | Public Safety Commission | 3 years, after updating 5 years |
| Travel industry | The Minister of Land, Infrastructure, Transport, and Tourism or the prefectural governor | 5 years |
STEP 4: Acquiring business management visa(If necessary)
| Status of residence permitting business management | Need to get Business Management VISA | |
| Capital of a company | 1 yen(same as Japanese) | capital of 5 million yen or more by one person |
| Examination of the source of capital | – | The Immigration Bureau will ask you for the source of the capital. |
| Required document | – | History of bankbooks and bankbooks of relatives, etc.(Documents can prove the source of the capital) |
| Requirements for office | It is possible to open in one room of your home. | business establishments must be secured separately from home. In this case, you must contract “under your corporate name” and “for business use”. |
| Educational background and work experience | – | – Business management visa does not require an applicant’s educational background or work experience as a requirement if it meets the requirements of business scale (investment of 5 million yen or more).- International students and senior citizens who do not have experience in business will be checked strictly, so it is necessary to prepare a business plan with sufficient content.- In addition, when trying to obtain a business management visa without investment as a manager, more than 3 years of experience is needed. |
STEP 5: Financing for start-up (Bank loan)
As a general rule, Foreigners can use the Bank loan under the same conditions as Japanese. However, it is essential for foreigners to have a status of residence that allows them to operate a business in Japan, and in principle, they are required to repay loans within the period of stay. Also If the repayment period of the loan exceeds the period of stay, it may be possible to obtain a long-term loan with “business continuity” and “renewal of residence status” as essential conditions. Business continuity is judged from the business plan, own funds, residence history, spouse’s nationality, etc.
Conclusion
In summary, unless you have a residence status such as permanent resident or Japanese spouse who has almost the same privilege as Japanese, the hurdle for financing tends of foreigners is higher than Japanese. Also, all of the required documents referred to before should be written in Japanese. So it is desirable to consult with administrative scrivener corporations that provide English translation services in advance when planning a business. Also, SUGEE Kansai provides you with excellent translation services which include document translation, homepage translation, and so on. In addition, we provide most of the service you need if you want to start a business in Japan as the following feature shown.
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Notes for the readers:
Please use this article only as a reference, not as a legal guideline. Therefore, sugee.jp will take no responsibility or liability, so far as legally possible, for any consequences of your actions. This article was written by Chen Xin, a SUGEE writer, on 25 July 2020.
Reference
[1]J.J.works行政書士事務所. 2020. J.J.Works行政書士事務所. [online] Available at: <https://houmukaikei.biz/article/5819/> [Accessed 25 July 2020].
[2]Continental-immigration.com. 2020. 【経営管理ビザ】事業計画書のポイントと注意点. [online] Available at:
<https://continental-immigration.com/management/businessplan/> [Accessed 25 July 2020].
