Most foreigners working in Japan have a contractual relationship with an organization in Japan. Typically, that organization is the Japanese company which employs them.
However, this type of employee-employer relationship may not be suitable for everyone.
If you are looking to start your own company in Japan, it is possible to use that company to self-sponsor a Japan work visa. Doing so, unfortunately, requires time, patience and funding.
The (greatly summarized) steps involved in self-sponsoring a Japan visa via one’s own business are typically as follows:
Establish a company in Japan: An explanation of the various types of Japanese entities is beyond the scope of this article. Typically the choice is between a Kabushiki Kaisha ("KK") and a Godo Gaisha ("GK').
This article contains some useful information about Choosing a Japan Entity: KK, GK, Japan Branch and Representative Office.
A KK is the traditional choice and some argue that it has a stronger commercial image, which is important when doing business with traditional Japanese companies.
A GK may be preferred when an American is involved since it may simplify the American applicant's U.S. tax filings. This is due to the application of the so called U.S. check-the-box rules. Anyone subject to U.S. taxes should seek professional advice prior to starting any business outside the United States.
Once the new company is legally established, additional filings must be made with the Japanese tax authorities. To do so, you will need the assistance of a Japanese tax accountant (zeirishi in Japanese – see below for more on zeirishi).
There are three particularly important issues to pay attention to when you incorporate:
Paid in capital: Paid in capital is the amount initially invested in the company in exchange for shares.
The initial paid in capital should be as high as possible to maximize the chances of your self-sponsored visa application being accepted. In any case, the initial paid in capital should be at least JPY 5 million.
Note that the money you invest in your company as paid in capital can be used in your business after the incorporation has been completed.
- Office: The authorities prefer a separate business office evidenced by a lease agreement and possibly photos. Typically a virtual office or a home office will not be acceptable. A serviced office is often an suitable option.
- Director: A Japanese company will need at least one director who is a resident of Japan. If you do not have a visa to live in Japan prior to setting up the company, you need another person to occupy this role for the purpose of the incorporation. This is the discussion of Japan Visa’s Nominee Director Services.
- Apply for a Visa: Usually the person setting up the company will apply for a Japan Investor Visa. It is strongly recommended that the services of an experienced certified immigration professional be engaged for this purpose.
Professional Assistance for Self-Sponsoring a Japan Work Visa
Two types of professional are likely to be important for anyone using the visa self-sponsorship route in Japan.
- A certified immigration specialist (Gyoseishoshi). As mentioned above, we strongly recommend consulting with professional assistance when applying for a visa. Furthermore, a certified immigration professional projects a professional image.
- A zeirishi (Japanese tax accountant): A zeirishi is able to assist with the financial and tax aspects of establishing and running your business. Their key roles include:
- Handling the actual incorporation: Most zeirishi are able to undertake the incorporation for their clients either directly or via a relationship with a law firm.
- Making corporate tax filings after the company has been legally established. These filings are essential and, if not handled correctly, may lead to serious visa and tax problems.
- Handling ongoing tax and other compliance matters for your new company. Even a modest business will need to file annual tax returns. In addition, payroll for Japanese employees is complex and requires deductions for taxes, social insurance, and labor insurance. A zeirishi will manage these tasks as well as the associated reporting to the authorities. This article includes a useful Compliance Calendar for a Japanese Company.
- Helping with Japanese individual tax: It is likely that you will need to file an individual tax return as a company owner, which the zeirishi can assist with.