Q_iconIs a visa required for foreigners to establish a company in Japan?

A_dark_iconStrictly speaking, incorporating a business in Japan does not require a visa (Resident Status).

★ Explanation ★

If foreigners would simply incorporate a company in Japan, they would not need a visa (Resident Status).

If only a representative in Japan will be assigned and no business office(s) will be set-up, the registration and license tax to be paid to the relevant legal affairs bureau will be 60,000 Japanese yen.

information-on-stockholderIn the past, when incorporating a company in Japan, at least one of the representatives should have an address in Japan before they could apply for the registration of the company. Having an address in Japan basically equates to having a Japanese residency status, meaning it was not possible for a foreigner without a status of residence to set up a company in Japan alone. However, the Ministry of Justice lifted such restrictions on March 16, 2015, by way of notice: “Handling of an application for the registration in the case where all of representative directors of a domestic stock company do not have any domicile in Japan (Notice) (The Ministry of Justice Min-sho, No. 29)”.

However, despite the loosening of restrictions on foreigners when establishing a business in Japan, it is still difficult for those who do not have an address in Japan to open an account at a Japanese bank. This is because they do not have the necessary bank account to perform capital contribution for incorporation.

Foreigners who enter Japan on a short-term stay visas such as those for tourism are not issued residency cards. This lack of valid identification means they generally cannot open personal bank accounts in Japan. As a result, foreigners who want to establish a new company in Japan are often told to seek assistance from a Japanese, permanent resident, or other long-term resident holder residing in Japan (who would then become as a joint Representative Director) to set up the company. The process of opening a bank account for the established company would be smoother this way. In addition, as of March 2017, more account holders can be considered for capital contribution, making capital contribution through the account of a director (or representative director), as well as a non-incorporator or non-representative director account holder (under certain conditions) acceptable. For more details, please refer to Q51.

Furthermore, after establishing a company with a resident status for a short-term stay, there may be cases where you will have to stay in Japan for a long time to carry out business activities for the company, which calls for a Business Manager visa. This means that holders of short-term stay visas are not exempted from having to obtain a Business Manager visa when required.

To conclude, strictly speaking, visas are not necessary if foreigners would only be in Japan for the act of company incorporation. However, if considering the need to open a bank an account and actually performing business activities, there is a close relationship between visas and the establishment of a company and there are many cases in which foreigners would need a resident status in Japan.