Establishing a company in Japan as a foreigner
While switching from a Startup visa to a Business Manager visa
A bit more than a month ago, in February 2021, I registered a company 会社設立 in Osaka. This was a required step in the process of changing from my Startup visa to a Business Manager visa. Below is a brief record of this process.
TL;DR
- You can do a simple case by yourself.
- Timing and the amount of the founding capital transfer to your personal bank account are critical.
Caution
This is not a legal advice. As you will see, I was able to establish a company with generic bylaws and get a business manager visa. However, that does not mean that I have not made a mistake that will come around to bite me at some point. Watch this space for updates, I will make sure to post here if something pops up.
There are many guides for launching a company in Japan, for example the official one from JETRO and this recent write up. I had to ensure that I will qualify for a business manager visa, so I will emphasize a couple of nuances that were important for that purpose.
Acknowledgements
While I did not hire any help, I did receive significant amount of consultation support from Osaka Business Innovation Center 大阪産業創造館, called Sansokan サンソウカン for short. Kazuki Ishimine 石嶺 一樹 and Noma Sogawa 曽川 乃麻, the two people in charge of my Startup Visa, arranged free consultations with administrative scriveners 行政書士 and immigration lawyers and were on call to answer potential questions. いつもありがとうございます！
My constraints
- I was in Japan on a Startup visa 特定活動. You can find more about this residency status here and here.
- Obtaining a Startup visa from the city of Osaka meant that the company needed to be founded in Osaka. The process is probably similar in other municipalities.
- The company needed to be established in a way that I, as a founder, could apply for a Business Manager 経営・管理 visa. A major requirement for a founder to get the immigration status of a Business Manager is to either have 2 full-time employees or the founder’s individual share of the founding capital needs to be ¥5,000,000 or more.
In other words, decisions made during the establishment of a company can limit the founder’s options when applying for a Business Manager visa.
- I wanted to do as much as possible by myself, without hiring an administrative scrivener 行政書士 and a judicial scrivener 司法書士.
The quotes for the administrative scrivener work (preparing articles for incorporation and supporting docs) that I received ranged between ¥120,000 and ¥220,000, on top of the government fees. Logically, I thought, establishing a company with a simple structure should not require too much creativity. Having an experience of registering a company in the US, in one evening, completely online using Clerky, I was curious about the process in Japan. Also, I am chea.. uhm, frugal.
After some consultations, with the help of the free(-ish, see below) online service provided by MoneyForward (another business productivity company, Freee, seems to have a similar service — I have no affiliation with either), a Chrome browser translation functionality (the MoneyForward service was all in Japanese), I was able to register a vanilla company paying just about the minimum necessary fees and learning a bit about the process along the way.
Prerequisites
1. Personal seal 印鑑 and the seal registration certificate 印鑑証明書 for each founder
A personal seal is the ultimate first step in becoming a legalized member of Japanese society, because it has no prerequisites. Also known as hanko はんこ, a personal seal can be bought cheaply at many stationary stores. There are even vending machines that sell seals at ドンキホーテ. Enjoy this iconic and controversial piece of Japanese culture while it lasts!
A seal registration certificate is issued at your local city ward office 市役所・区役所 for a small fee, and it will require a valid ID card, the seal, and, possibly MyNumber 個人番号. I ordered two or three copies and I ended up giving out them all in the process.
While I did not own a MyNumber Card 個人番号カード, I did have an actual number issued on a piece of paper 通知カード during the first time I registered in the city office. This piece of paper was required occasionally and was a sufficient proof of MyNumber without an actual MyNumber Card. In general, MyNumber seems to be a requirement for many formalities these days, so you may want to take care of that early on.
2. Personal bank account
The total amount of the founding capital will need to be accumulated in a personal bank account. It is critical the the transfer of the total amount of the founding capital into your account happens between two dates: the date the Notary Public certified your articles of incorporation and the date of applying to the Bureau of Legal Affairs 法務局 to establish the company.
Opening a bank account in Japan is a topic of another fascinating conversation. I will just mention that opening a bank account is not trivial, even for Japanese citizens. Timing is also important, as banks have requirements about the minimum remaining duration of residency (anywhere between 1 and 3 months) and the minimum residency up to now (6 months, except for Japan Post Bank, where you can open an account with a brand new residence card). My best experience banking so far was Japan Post Bank ゆうちょ銀行.
3. Office location 事務所
You will need a location that allows a business registration. For the purpose of a Business Manager visa, your office should have an address that is different from your personal address.
I was able to rent a small room at TEQS, an office space and accelerator for tech companies in Osaka. Because of its affiliation with Osaka City Government, TEQS tenants get 50% off the company registration fee, which is a ¥75,000 discount in case of KK 株式会社, a C-corp type company. Nice.
Process
From here on, MoneyForward website guided me through the steps of the company registration process.
Step 1: Articles of incorporation
Fill in the form using an online service of your choice. In my case, it was MoneyForward. The filled information will allow the service to generate a 定款, or articles of incorporation.
For the purpose of a Business Manager visa, it is required that the applicant’s personal share of the founding capital is at least ¥5,000,000. Alternatively, you will need at least 2 full-time employees.
The “Business purpose” 事業の目的 section can be a bit tricky. Fortunately, there are public databases and registries of existing companies where you can seek inspiration.
You will also need to choose the date of the end of the company’s fiscal year. There are different theories on choosing it and MoneyForward links to some articles that discuss pros and cons.
You will have an option of generating a paper or electronic version of articles of incorporation, certified by an administrative scrivener. Choosing an electronic version will save you ¥40,000 in fees. Duh!
Remember I said the service was free(-ish)? MoneyForward will ask you to pay ¥5,000 in administrative scrivener fees for putting together the articles of incorporation. It will then offer to waive the fee, if you sign up for their MoneyForward Cloud service. Since you can cancel the service anytime, I just took the bait and signed up.
Step 2: Company seals
You will need to order a set of the company seals. At least 2 seals are necessary (one for a bank and another is for the representative director’s general use). While MoneyForward provides an option to order a seal online, I wanted to give some business to a local “hole in a wall” type of a store. However, it turned out the local store charged more than ¥20,000, while the cheapest 3-piece wooden set on MoneyForward was ¥7,920 plus ¥520 postage. Goodbye wokeness, hello savings.
Step 3: Certify articles of incorporation at a notary public’s office
This step is only necessary when registering KK 株式会社. Apparently, registering GK 合同会社 does not require a notary’s certification. Once you are satisfied with the contents of your Articles of Incorporation 定款, MoneyForward will (1) hire an administrative scrivener company to compose the articles of incorporation and to send them to a notary public of your choice, and (2) will offer you a few local notary public offices to choose from. The Notary Public fee was about ¥52,000.
There are some tricky instructions on binding the articles of incorporation before bringing them to the notary public. I was sure I would mess up this crafts project, so I just brought unbound documents and got help in properly binding them at the notary’s office.
Step 4: Transfer or deposit the complete amount of the founding capital into your personal bank account.
As I mentioned before, it is critical that the transfers into your personal bank account that total the amount of the founding capital are all performed not earlier than the date a notary public certified the articles of incorporation. When applying for the company registration to the Bureau of Legal Affairs, you will need to provide a bank pass book or some other proof of the funds and the dates the transfers to your bank account were completed. If you are transferring from abroad, the timing can be tricky — plan accordingly.
Step 5: Submit the documents to a local Bureau of Legal Affairs
This one was pretty straightforward. Prior to this, the articles of incorporation need to be stamped by all the co-founders and the personal stamp certificates needed to be provided. In case your co-founder is remote, that may take time — plan accordingly.
At this point you will have to pay the registration fees: ¥150,000 for KK 株式会社 or ¥60,000 for GK 合同会社. As I mentioned above, renting the office at TEQS, an Osaka City affiliated space, made me eligible for a 50% discount.
In exchange for the documents, I received a slip of paper to come back in 6 days and was told that if something is missing I will get a phone call. Later that afternoon I got a phone call from the Legal Affairs saying that while the bank account had enough funds, the amount received after February 1 (the notary public’s certification) was less than the founding capital. Fortunately another transfer was coming that night, so the following day I brought the updated pass book and the issue was resolved.
That’s it!
On the appointed day I came to the Legal Affairs again and was told the registration was successful. I paid a little more to get the company registration certificate 登記事項証明書, the company seal certificate 会社印鑑証明書 and a card that comes with it.
Step 6: A few more things…
After the company is registered you need to submit forms to the tax office 税務署, pension office 年金事務所, municipal 市町村役場 and prefectural 都道府県税事務所 tax offices. Fortunately, most of these forms were auto-generated by MoneyForward. The pension office form was not, so I got some help from the clerk in the pension office. It looks like some of these forms can be sent by mail, but in my case, talking to clerks and having them check the filled forms was quite helpful.
An important point for the Business Manager Visa is that the founder needs to be receiving a salary that is sufficient for covering living expenses. You will have to decide on this amount when you are sending the form to the pension office.
Timeline
January 21 — Step 1: filled and submitted the articles of incorporation to MoneyForward. TOTAL, the administrative scriveners company, confirmed that they received it.
January 22 — Amended the articles of incorporation on the recommendation from TOTAL, asked them to also make the corporate seals. Made a bank transfer for the seals.
January 27 — Got articles of incorporation from TOTAL.
January 28 — Company seals are shipped. Made appointment with the notary public for February 1.
January 29 — Received the company seals.
February 1 — Step 3: Certified articles of incorporation at the notary public’s office.
February 2-February 18 — Step 4: transferred ¥5,000,000 to my personal bank account.
February 18, am— Step 5: Came to Osaka City Bureau of Legal Affairs and submitted all the documents.
February 18, pm — Got a phone phone call from the Legal Affairs on the founding capital issue: the amount transferred into my account after the date the notary public certified the articles of incorporation was less than founding capital.
February 19, am — Came to the Legal Affairs with an updated passbook and resolved the issue.
February 24 — Went to the Bureau of Legal Affairs, got confirmation that the company has been established. Received the company seal certificate 会社印鑑証明書 and a card that comes with it.
February 25,26 — Went and submitted forms to the tax and pension offices.
Fees
Personal and corporate seal certificate issuance fees: under ¥5,000
Printing and copying: under ¥5,000
MoneyForward 1 month membership: ¥1,309
Corporate seals and postage: ¥8,440
Notary public: ¥52,000
Bureau of Legal Affairs KK registration fee: ¥150,000 (without the discount)
Total fees: ~¥222,000
